I can recall a few month old mail from this gorup only stating 60% NPA of PSU banks is with less than from 0.4% of total defaluters.
This simply proves they can challange poor but not rich.
Anil G. Khandelwal,
BE,MIE,FIV
--- In India_Vision_2020@yahoogroups.com, Corporate Ezine PRe-Sense <prpoint@...> wrote:
>
> 8 July 2010
>
> Dr K C Chakrabarty
> Deputy Governor
> Reserve Bank of India
> Mumbai
>
> Dear Dr Chakrabarty
>
> *Background*
>
> In our earlier mail dated 6th July 2010, we have brought to your notice
> about the harassment to Suganya, a hapless poor student, while disbursing
> the third instalment of edu loan by Indian Overseas Bank. Suganya does
> not have father and her mother is mentally not stable. Her mother is living
> in some 'charity home'. She is living with her grand mother, who receives
> an old pension of Rs.400/-.
>
> She secured high marks in her plus and joined B Sc course. IOB
> had sanctioned Rs.90,000/- for her 3 year studies. When she approached the
> bank during second year, the bank forced her to pay the first year interest
> of Rs.5000/-. In spite of her pleading that she was a poor girl, the bank
> did not show any concern to her. She had to borrow Rs.5000/- at a huge rate
> of 60% to pay the interest. Still she is yet to return the private
> borrowing.
>
> In the first two years, she had obtained an average marks of more than 70%.
> When she approached the bank this year, again, they insisted to pay
> Rs.7500/- towards the interest. Since her family did not have any income
> and unable to borrow again, at huge interest, she preferred to discontinue
> her education. She joined one textile shop as a sales girl 15 days back.
> After Education Loan Task Force (ELTF) blasting the information openly in
> all the groups, IOB issued her the demand draft for the next instalment of
> fees yesterday. From today, she has joined the college.
>
> *Response from IOB*
>
> Now, we have received response from IOB General Manager (copy appended below
> for the information of all). IOB defends that the student opted for payment
> of interest to get 1% concession. I do not know how the bank expects the
> student of 15 year old to understand the technical aspects, before signing.
> The bank gets the signature in all the papers without application of mind
> and uses to defend their 'inhuman' approach later. Did IOB officials guide
> the student at the time of signing the documents properly?
>
> Can you believe that a poor girl, who does not have any source of income and
> suffering from poverty would have opted for 1% concession. Do you
> honestly believe, that this poor girl would have borrowed at 60% rate to
> avail 1% of interest concession. This approach of IOB proves beyond doubt,
> the insensitivity of the Management to the sufferings of poor students.
>
> Indian Overseas Bank, through their mail, has brought out the fact clearly
> how they used to get the signatures from the poor students without guiding
> them properly and use those signatures later to harass them.
>
> Now we have requested the bank to re-credit the amount of Rs.5000/- paid by
> her last year to her SB account. She is yet to pay back the private
> borrowing. Who is going to pay the huge interest to the outside borrowing?
> ELTF is going to demand the Chairman of the Bank to reimburse the interest
> to this poor girl.
>
> *Humble request to RBI*
>
> Due to such type of 'misguiding' or 'misleading' attitude and approach of
> banks like IOB, thousands of poor students like Suganya are affected
> throughout the country in IOB and in other Banks.
>
> All the Public Sector Bank Boards are having one director from RBI, one
> director from the Finance Ministry, one director from the Employees Union
> and one more director from Officers Union. What are they doing, when the
> banks blatantly violate the guidelines and harass the poor students?
>
> On behalf of the thousands of members of all the groups and ELTF, we request
> you to kindly check up with your own RBI directors, what were / are they
> doing to ensure that edu loan schemes are properly followed in all the
> banks.
>
> After release of the information through various groups, we have been
> getting many enquiries and support from various organisations to help this
> poor girl.
>
> Further we also request you to (a) kindly advise all the banks not to
> violate the guidelines and explain properly the schemes to the students. (b)
> RBI also should insist on taking suitable disciplinary action against those
> who violate the guidelines and who are insensitive to poor students. (c)
> The Branches can also use two hours in a week in all the branches to meet
> the edu loan borrowers and applicants and give them awareness.
>
> If RBI does not take immediate steps, such 'comic' responses like the one
> from the GM of IOB saying "Suganya opted to get 1% concession' will
> continue. I am making this letter open to all the groups, so that general
> public can understand the attitude of IOB and other banks. .
>
> We are also endorsing a copy of this to few MPs, who are supporting this
> cause.
>
> With warm regards,
>
> Srinivasan
> Editor in Chief, PreSense www.corpezine.com
> Convenor, ELTF, www.eltf.co.cc
> 91766 50273
>
> ---------- Forwarded message ----------
> From: <mdd@...>
> Date: Thu, Jul 8, 2010 at 1:25 PM
> Subject: Education Loan Complaint
> To: prpoint@...
>
>
> Sir,
>
> We refer to your e-mail dated 06.07.2010 on the above subject. Our Bank is
> following Model Educational Loan Scheme as per IBA guidelines.
>
> As per the Scheme,
>
> i. Interest can be serviced during the study period for which there is 1%
> interest concession.
>
> ii. Alternatively interest can be serviced after the completion of study
> along with the principal amount fixed in EMIs
>
>
>
> Intially Ms Suganya had opted for servicing the interest during the study
> period. Hence the Branch had advised her to service the interest. However
> when she opted to service the interest after the study period our Branch
> released the final year fees.
>
>
>
> We have also advised our Branches that they should entertain genuine
> requests without rejecting the applications.
>
>
>
> This is for your kind information. We hope we have clarified the points
> raised in your e-mail dated 06.07.2010
>
>
>
> R Vaidyanathan
>
> General Manager
>
> Indian Overseas Bank
>
> Retail Banking & Marketing Dept
>
> Central Office
>
>
>
> From: Corporate Ezine PRe-Sense <editor@...>
> Date: Mon, Jul 5, 2010 at 8:18 PM
> Subject: Blatant violation of edu loan guidelines by Indian Overseas Bank
> (IOB) and in-human approach towards poor students
>
>
> *Requesting RBI to conduct a thorough investigation of edu loan accounts
> with IOB and other banks for blatant violation of guidelines.*
>
> dear friends
>
> Probably members are aware that our ezine PreSense and India Vision group
> has set up a new initiative "Education Loan Task Force" (ELTF) few months
> back, to safe guard the poor and brilliant students from the harassment of
> banks, when they seek education loan and to create awareness. We have been
> getting lot of complaints about (a) insisting on security for edu loans
> lower than 4 lakhs and (b) forcing the poor students to pay monthly interest
> as a pre-condition to disburse next instalment of term fees, in violation of
> guidelines. Very sadly, even the Regional Offices and head offices are also
> party for such violations. All the guidelines are available in ELTF site
> www.eltf.co.cc for information.
>
> Today, we received one heart breaking complaint through Dream India, one of
> the partner organisations of Action 2020 Team (appended below this mail).
> Though we have been receiving similar complaints earlier, we thought of
> sharing this openly with all the members of prpoint, new media forum,
> TEJOUS, India vision group and action2020, as none of our earlier mails to
> Chairman of IOB, were responded by IOB.
>
> Second purpose of this mail is to create awareness about the education loan
> among our members and society through media, word of mouth and social media.
> .
>
> We are also endorsing a copy of this mail to Deputy Governor of RBI, few
> Members of Parliament, Consumers Association of India. We have also met
> earlier few MPs who have agreed to raise this important issue in the coming
> monsoon session of Parliament.
>
> *Case study of Suganya, a edu loan borrower of Indian Overseas Bank:*
>
> Ms Suganya hails from a very very poor family and her father died long back.
> Her mother is not mentally stable and she is living in a home. This girl
> is staying with her grand mother, who receives an old age pension of
> Rs.400/- from the Government. Dream India has been supporting her for her
> studies. After securing excellent marks in Plus Two, Suganya joined B.Sc
> Micro Biology course in a college. She had approached Indian Overseas Bank,
> Venkatnarayana Raod, T Nagar, Chennai in 2008 and got a loan sanctioned for
> Rs.90000/ ( Rs.30000 per year for three years).
>
> Though guidelines strictly prohibit recovery of monthly interest from the
> edu loan students, all the branches of Indian Overseas Bank always force
> all the students to pay interest. In 2009, when she had to pay the second
> year fee, IOB forced her to pay the first year interest, in violation of the
> guidelines. Inspite of her pleading that she was from a poor family and
> explaining her background, the bank mercilessly insisted the payment of
> interest, as a pre condition to disbursement of next installment. She had
> to borrow a sum of Rs.5000/- at huge interest of 60% from private money
> lender to pay the bank interest. Such inhuman approach by banks defeat the
> very purpose of the scheme.
>
> Suganya has been approaching IOB Manager for the past two months for the
> release of third year fees of Rs.30.000/-. The bank was insisting on the
> payment of interest of Rs.7000/-. The college started 15 days back. Since
> she did not pay the third year fees, the college did not permit her to
> attend the college. Unable to comply with illegal conditions of IOB, she
> discontinued her studies. Due to inhuman approach of the bank officials.
> she started working as a 'sales girl' in a textile shop.
>
> When the matter was brought to our knowledge this morning by, Dream India,
> we asked the girl to meet the Manager again with a request. Whenever, such
> complaints come to us, we request the students to talk to the manager with
> the same request, keeping their mobile phone 'on'. This would enable us to
> overhear their conversation. Accordingly, we requested Suganya to meet the
> manager and request him to release the final instalment of fees. .
>
> We heard over phone that the manager was insisting on the payment of
> interest, as a precondition to the disbursement of next instalment. He also
> said that it was their bank rule. Subsequently, I also spoke to the
> manager to ascertain the facts. He also confirmed that he had to approach
> the Regional Manager to permit her not to pay interest and he insisted on a
> letter from the student.
>
> As suggested by us, she has today submitted a letter to IOB with a request
> to permit her to pay interest after the completion of studies (as per the
> guidelines) and also seeking refund of earlier interest paid by her.
> (please remember she borrowed at 60% interest earlier to pay IOB interest
> due).
>
> It is sadly surprising that IOB insists on a letter to make them follow
> the guidelines. It is also surprising that branch has to seek permission
> from Regional Manager to follow the guidelines. Normally, only when the
> branch wants to violate the guidelines, they have to seek permission from
> higher officers. This clearly indicates the lack of 'governance' by IOB
> Management. . :
>
> The guidelines are very clear about payment of interest by edu loan
> borrowers. The interest has to be calculated and added to the principal,
> one year after completion of studies or 6 months after getting the job,
> whichever is earlier. Principal and interest should be added together and
> EMI will be fixed. Branch Managers are required to implement the
> guidelines strictly. Instead, IOB Head Office, probably, does not want the
> guidelines to be followed by branches and hence, they are keeping the
> guidelines away from the branch managers.
>
> Though, we are dealing with many banks, we find it extremely difficult to
> handle IOB, as they are not communicative and never bother about RBI or
> Government guidelines. I do not hesitate to blame the *Chairman and the
> top management of the Bank* for such violation of guidelines and their
> insensitivity to the poor students. Finally, when complaints are sent, the
> poor branch managers will be made as a 'scape goat' by these top people, to
> escape from actions.
>
> This is not the only case from IOB. We have been getting lot of such
> complaints from various people about the violation of guidelines by IOB at
> all branches. We even took up the matter with RBI to conduct a thorough
> investigation of IOB and to take disciplinary action against the senior
> officials, who violate the guidelines. The mail to Chairman of IOB also did
> not evoke any response earlier. When such violations are seen across the
> branches, even after our taking up the matter with RBI, we have to blame
> only the Chairman and Executive Directors of the Bank for their
> insensitivity to such an important issue. .
>
> *Appeal to RBI*
>
> Unless an action is initiated against the top management people like
> Chairman, such blatant violations will continue in our system.
>
> This is only a sample case, as to how banks treat the poor students. We
> have been receiving such complaints against other banks also.
>
> *Appeal to members and media *
>
> Through this mail, I request all members with social consciousness , to
> write a mail to RBI Deputy Governor Dr K C Chakrabarty to investigate all
> banks in India for such violation of guidelines, which defeats the very
> purpose of the scheme by Government and RBI and thereby causing harassment
> to poor students like the one described above.
>
> We also appeal to media friends to highlight such cases of violation through
> media to create awareness among poor students and banks. Earlier, in an
> exclusive interview to PreSense, Dr Chakrabarty has advised us to bring his
> notice such violations, so that deserving poor students are not harassed.
> He also said in the interview that no poor student should be denied an
> opportunity to study further, because of his poverty. (In Suganya's case,
> IOB has denied her opportunity to continue her education and made her to go
> for work)
>
> You can click 'reply to all' and send a mail to all.
>
> *Conclusion *
>
> If ELTF had not taken up this issue now, Suganya would
> have silently discontinued her studies and she would have remained as a
> sales girl in a textile shop. Still we are awaiting response from IOB for
> her request. There may be thousands of such Suganyas in India, suffering
> silently because of inhuman approach of the banks like IOB and without
> knowing what to do. ELTF insists all the banks to follow the guidelines
> given by RBI/IBA and not to violate even one mm.
>
> Let us spare one minute, by sending mails to RBI or by creating awareness
> through media to safeguard such 'faceless' poor and brilliant students.
>
> Srinivasan
> Editor in Chief, PreSense www.corpezine.com
> Convenor, Education Loan Task Force www.eltf.co.cc
> 91766 50273
>
>
>
> ---------- Forwarded message ----------
> From: Natarajan Raman <natarajan.raman@...>
> Date: Mon, Jul 5, 2010 at 5:29 PM
> Subject: IOB T.Nagar Branch Forces Students to Pay Interest on Education
> Loan
> To: action2020eltf@...
> Cc: natadreams@...
>
> Dear Sir,
>
> Student Suganya is doing her B.Sc Micro Biology at Apollo Arts Science
> college, Chennai. She has got approval for education loan amounting
> Rs.90,000 for all three years [ 30K per year ] from IOB, Venkat Narayana
> Road, Chennai. After the first release of the payment, the student was asked
> to pay interest amount of Rs.5000 for the second disbursement. She was
> forced to borrow loan outside at a whopping 60% interest.
>
> Currently, she is in third year. She has scored 70% so far and when she
> approached the bank for her third year loan payment, she was asked to pay
> Rs.7000 as Interest. Suganya is survived by her mother and grand mother. Her
> father passed away while her Mom has some mental illness. Her grandmother
> gets pension of Rs.400 from government. With the only source of income being
> this, the student had to discontinue her education and had to work at a shop
> in T.Nagar. The student is a passed out from SV Home for destitute children,
> the home which is supported by Dream India, one of the partners of India
> Vision2020 group.
>
> Today, she had a discussion with the IOB manager of T.Nagar branch. The
> manager explained that he is new to the branch and as per her loan terms she
> has to make payments towards interest for further disbursal. She has
> submitted a request letter to approve her loan and allow her make the
> Interest payment along with the principal. The manager is yet to come back
> on this.
>
> We have seen many such cases of IOB violating RBI guidelines and taking the
> students for a ride. I request you to take this mater with the concerned
> authorities and help the poor student continue her education. The amount of
> agony she had to undergo cannot be explained in words. I also request you to
> make the bank repay the 5000rs interest payment she was forced to make for
> the loan disbursement last year.
>
> Thanking you,
> Natarajan Raman
> ELTF - Co-Convenor
>
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