Kerala: Banks start loan recovery

KOLLAM: Those who have availed education loans are in dire straits with the banks initiating revenue recovery procedures as against the government assurance. As per the statistics with the Indian Nurses’ Parents’ Association (INPA), some 28 students have committed suicide in the past five years in Kerala after recovery threats for repayment defaults. There are over 7 lakh students across the state with the burden of education loans, a majority of them jobless even after completing their courses.

“As against the RBI norms, the banks demand collateral security for advances below Rs 4 lakhs. They ask for tax receipts, land documents, and possession certificate of properties the parents own. In the case of repayment dues, they threaten recovery action. The chief minister had in September assured not to proceed with recovery, but banks continue to threaten us to use police for recovery. The defaulters are now on the verge of suicide,” S. Raghavan of INPA told DC.

Parents also accuse lenders of collecting the interest amount along with the second instalment of payment, without following the Center’s relaxation in interest rates for such education loans too. They retrieve meagre amounts secured by the poor parents through MNREGA, gas subsidies, and even widow pensions, they allege.

“They don’t care whether these students get a job after their education. We are now to form anti-recovery people's forums against this,” Mr Raghavan added. In the latest incident, an engineering graduate from Pattathanam in Kollam committed suicide on November 6 as the lender started initiated recovery proceedings. A majority of students who have availed education loans belong to private and self-financing colleges studying nursing, engineering, MBA, hotel management and lift technology.