State guarantee for banks: Kerala CM Pinarayi Vijayan

Thiruvananthapuram: The state government will offer guarantee for banks to issue Rs 6-lakh bank guarantee to students selected for the MBBS course in self-financing colleges.

The decision was taken by Chief Minister Pinarayi Vijayan on Wednesday following official-level discussions Additional Chief Secretary K M Abraham had with the State-Level Bankers Committee.

Banks would provide the guarantee without collateral security for six months but students or guardians will have to provide a personal undertaking (guarantee). The banks would start issuing the bank guarantee from September 5. Students should approach bank branches with records of admission from the CEE or colleges.

Banks would not levy commission on bank guarantees for SC/STs and students from traditional sectors like fishermen, coir, cashew and handloom.

If the fee regulatory commission decides to fix a fee higher than Rs 5 lakh, banks should provide guarantee for the higher amount. Banks will make available loans to all student applicants. Now, banks need a cash margin of 15 to 100 percent for bank guarantees. However, as the government provides guarantee such cash margin is not required.

Meanwhile, the state government submitted before the HC on Wednesday that no medical students would be denied admission for not producing bank guarantee. The government’s response came when opposition leader Ramesh Chennithala moved the court seeking a directive to the state government to take all possible steps to facilitate deserving students from financially poor to obtain bank guarantee of Rs 6 lakh within the time limit prescribed by the SC.

Mr Chennithala sought a direction to the Admission and Fee Regulatory Committee to identify students who are to be provided scholarship out of the corpus fund, collected by way of surplus fee from NRI students. The government submitted that the corpus would be entirely used for giving scholarship for BPL candidates.