5 Aug 2013
The Chairman
State Bank of India
Mumbai
cc to: Deputy Governor, RBI, Mumbai
cc to: Deputy Governor, RBI, Mumbai
Dear Sir
For the past one week, we have been reporting to you about the shaming of poor education loan students in many of the Tamil Nadu Branches. Now that it has been brought out widely by various print, TV and social media, your management has been arrogantly defending the shaming act. Various political parties have condemned your 'anti-poor; anti-student' attitude.
Today Mr Karunanidhi, Former Chief Minister of Tamil Nadu has also slammed SBI for your shaming eduction loan defaulters. Please read the IANS Story, published in various online media. This story also contains the quote from ELTF.
Our observations about SBI's attitude:
As at March 2012, according to data available, SBI has 37,156 crores of gross Non performing Asset (NPA) against their total advance of Rs.7.58 lakh crores.. That is 4.90% of SBI's total advance is classified as NPA.
The total education loan itself in SBI as at March 2012 was only around 11,500 crores spread over 5.6 lakh accounts.(around 1.5% of total advances granted by SBI). In our estimate, the NPA in the education loan portfolio may be around 2 to 3%, i.e. it may be around 400 crores. under Education Loan. (Compare this with the gross NPA level of Rs.37000 + crores for the entire bank).
The total education loan itself in SBI as at March 2012 was only around 11,500 crores spread over 5.6 lakh accounts.(around 1.5% of total advances granted by SBI). In our estimate, the NPA in the education loan portfolio may be around 2 to 3%, i.e. it may be around 400 crores. under Education Loan. (Compare this with the gross NPA level of Rs.37000 + crores for the entire bank).
If that be the case, why SBI should isolate poor education loan defaulters and shame them by displaying their photos prominently. Education loan defaulters contribute very very insignificantly to the gross NPA of the bank.
Probably SBI has resorted to this shaming of poor education loan defaulters, only to scare the students not to approach SBI for education loan. We are unable to get any reason other than this.
If SBI has decided to shame all the wilful defaulters, then SBI should not isolate the poor education loan borrowers. They should also display the photographs of the borrowers who have defaulted to the extent of 37,000 crores. If not the entire defaulters, can SBI publish the top 100 such wilful defaulters in the leading newspapers?
Probably SBI has resorted to this shaming of poor education loan defaulters, only to scare the students not to approach SBI for education loan. We are unable to get any reason other than this.
If SBI has decided to shame all the wilful defaulters, then SBI should not isolate the poor education loan borrowers. They should also display the photographs of the borrowers who have defaulted to the extent of 37,000 crores. If not the entire defaulters, can SBI publish the top 100 such wilful defaulters in the leading newspapers?
ELTF condemns the selective shaming of defaulters by SBI. SBI shames only poor defaulters, not rich wilful defaulters.
ELTF demands suitable disciplinary action against the senior official, who has ordered such shaming of poor students.
ELTF demands suitable disciplinary action against the senior official, who has ordered such shaming of poor students.
K. Srinivasan
Convenor
Education Loan Task Force (ELTF)
www.eltf.in
An initiative by Action 2020 Team under India Vision Group
Join the India Vision group to get connected with like minded people
http://groups.yahoo.com/group/India_Vision_2020/
Also visit www.indiavision2020.org
Convenor
Education Loan Task Force (ELTF)
www.eltf.in
An initiative by Action 2020 Team under India Vision Group
Join the India Vision group to get connected with like minded people
http://groups.yahoo.com/group/India_Vision_2020/
Also visit www.indiavision2020.org
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