[India_Vision_2020] Case study of how Indian Bank harassed a poor student, violating norms. ~ India Vision 2020

Wednesday, March 17, 2010

[India_Vision_2020] Case study of how Indian Bank harassed a poor student, violating norms.

India Vision 202012:37 PM No comments

dear friends

This is the copy of my mail addressed to Deputy Governor of RBI. As already informed in the group, the issue has been taken up at Rajya Sabha as Special Mention and we await response from Finance Minister.

We have also created a new blog on edu loan initiatives. This blog will provide comprehensive information.

http://action2020eltf.blogspot.com/

srinivasan

91766 50273

17 March 2010

Dr K C Chakrabarty
Deputy Governor
Reserve Bank of India
Mumbia

Dear Dr Chakrabarty

As you are aware, India Vision Group has formed an Education Loan Task Force (ELTF) to guide highly deserving poor students on the edu loan procedures.

In the past one week, many leading magazines have published about bank loan procedures and the contact details of ELTF. Last night around 11.30 pm, after my going to bed, one student by name Satish from Vettavalam called me and cried that the Indian Bank was not disbursing the last instalment of his edu loan, as he had not paid interest for some time. Today (17th Mar) being the last day for remitting his final semester examination, he pleaded for help. He came to know of our contact through the magazines. He also sent me the details through mail (given below).

This student Satish is not having father and his mother is working as a construction labour. He secured good marks and got admission in BE in Engineering College. Indian Bank had also sanctioned him the loan. Till 7th semester, he has secured 76.4% without any arrears. At the time of granting the loan, the bank had demanded a guarantor, which he has provided.

From the day of disbursement, the bank was insisting on the payment of monthly interest. They refused to disburse the next semester instalment, if the interest was not paid. Thus, so far, he was forced to pay Rs.46,800/-. Since his mother is a labour, he sourced the money for payment of interest from outside borrowings too.

Now, he had to pay the final semester fees and exam fees. The branch Manager insisted on payment of arrears of interest amounting to Rs.24,000/- without which he refused to disburse the final instalment. Today being the last day, he got worried. At this stage, one of his friends saw our ELTF details in a magazine and gave him our contact.

After getting the details form the student, today morning, I spoke to the Branch Manager of Indian Bank, Vettavalam branch. When I enquired about how the bank insisted on a third party guarantee and payment of interest as pre condition to next disbursal, the manager said that the student offered guarantee voluntarily and paid interest also voluntarily.

It is something surprising that the bank officials do not understand the real intention of the Govt. and RBI. How can a poor boy hailing from a cooly family can remit voluntarily, sourcing the money at higher interest. Even in that case, the bank manager should have counselled him the proper rules.

We receive many such complaints from different poor people, about the insistance of the banks for payment of monthly interest. This is causing a lot of worry to the brilliant poor boys. Even two days back, at our initiative, Mr Rangarajan MP has also taken up as
Special Mention in the Rajya Sabha.

We shall be thankful if you could kindly investigate this issue and also similar issues of insisting on payment of interest from poor students. We even go the extent of suggesting that officials who work against the interest of the poor people, violating the Government and RBI norms should be punished. Unless RBI takes the 'whip' in its hand, such harassment cannot be avoided. The branch officials cannot be "more loyal to the kingdom, than the king himself".

What we have been pleading with the Banks is that they should follow the norms laid down by Government / RBI and IBA. That is all. Since you are highly passionate about helping the highly deserving, poor students, we have no choice excepting to approach you.

Srinivasan
Prime Point
91766 50273
--

---------- Forwarded message ----------
From: Prabakar Prabha <prabakar2010@gmail.com>
Date: Tue, Mar 16, 2010 at 11:42 PM
Subject:
To: action2020eltf <action2020eltf@gmail.com>

sir ,

i think my friend called u sir...

this is my friends full detail about loan.

Name:R.Sathish
Account No:592843842
Loan No:592877383

10 th marks-448/500
12 th marks-877/1200
BE marks(upto VII th sem)-76.4% no history of arrears.

caste-BC

Address:R.Sathish,
S/O Selvi,
89/23a Car Street,
Vettavalam,
Tiruvannamalai-606 754.

College:SKP Engineering College,Tiruvannamalai.
IV year CSE

sir the total sanction amount is 2.85 lakhs for 4 years.
still now he bought 2.5 Lakhs...

Still now he paid about,

1st Year-for 75000---
7500
3 rd sem-for 75000+35000............ 6600
4 th sem-for 75000+35000+35000............ 9000
5 th sem-for 75000+35000+35000+35000........... 10800
6 th sem-for 75000+35000+35000+35000.--- 12900

approximately he paid Rs.46800 as interest.

for every sem when he bring the loan amt , he submitted the Mark
Sheets and the interest amouts.

sir, He his from very low economic background.
his mother work as a labour in that village.

His contact no.9790387566.

sir,he is in fear about anything happen in the last moment of 4th year
by the bank.

sir,i expect ur favorable action.without any trouble to his studies and future.

Thanking you sir.......

yours faithfully.....
K.Prabakar.

---------- Forwarded message ----------
From: Education Loan Task Force ELTF <action2020eltf@gmail.com>
Date: Tue, Mar 16, 2010 at 10:22 PM
Subject: Re:
To: prabakar2010@gmail.com

hi

The interest portion of the loan need not be paid to the bank. The bank will calculate at simple interest and the interest will be added to the principal after completion of the studies.

As per guidelines, the bank should not insist on payment of interest during the study period and they do not have any right to stop the loan.

If you can give us the details of loan and the name of the branch, we will take up with their head office and also to RBI for solution.

please give full details of the loan and what the bank was insisting on. Please also inform us the name of the branch and their contact n umber.

you may contact us over mobile 91766 50273

srinivasan

On Tue, Mar 16, 2010 at 9:58 PM, Prabakar Prabha <prabakar2010@gmail.com> wrote:

Sir,

I'm Prabakar.From Tiruvannamalai.
I studying in SKP Engineering college,Tiruvannamalai.

sir,My friend Mr.R.Sathish,from Vettavalam,Tiruvannamalai District.
He paying his fees by Education loan( Indian Bank )from 1st Year.
But now,Because of some economic condition,he is unable to pay the
interest to the bank.
so the stopped his loan this semester,he is in the edge of the BE.

if he didn't pay the fees means he couldnt allow to pay the exam
fees,tomorrow the last date. can u help for my friend by means of the
bank loan ,to get the loan sir.
he will pay the interest in some days.

we need some part of ur help...,can u help us sir?