Education loan NPAs amounted to Rs 7 lakh crore in 2021-22: Finance Ministry

New Delhi : Indian banks disbursed more than Rs 17,000 crore in education loans to students in 2021-22 , the central government told parliament on Monday. During the same financial year, the total value of non-performing assets in this segment amounted to over Rs 7 lakh crore.

Both the amount disbursed as education loans and the amount defaulted on have declined from 2019-20 to 2021-22, shows the data shared by minister of state (MoS) finance Bhagwat Karad, in response to questions asked by Congress Lok Sabha MP Karti P Chidambaram.

According to data from the Reserve Bank of India (RBI) and shared by Karad, public sector banks (PSBs) were the leading education loan providers. While PSBs gave education loans of over Rs 15,000 crore, private sector banks (PvSBs) disbursed more than Rs 2 crore. Small Finance Banks (SFBs) disbursed over Rs 35 lakh as education loan to students.

The amount of Rs 18,350.83 crore disbursed as education loan in 2020-21 saw a decline of just 1.09% percent from Rs 18,553.46 in previous financial year, 2019-20. The amount given dropped by 3.46% from 2020-21 to 2021-22. Given below are the amounts in absolute numbers and the percentage change every year.

Education Loan: Change in amounts

Education loan NPAs

The RBI has defined NPAs as “a credit facility in respect of which the interest and/ or instalment of principal has remained ‘past due’ for a specified period of time.” NPAs occur when a borrower defaults on a loan payment and the bank is unable to profit from it.

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Education Loan NPAs: Amounts since 2019

CGFSEL, Vidyalakshmi portal

All education loans up to Rs 4 lakh are collateral free in line with RBI guidelines.

The education ministry’s department of higher education handle the Credit Guarantee Fund Scheme for Education Loans (CGFSEL). As per this scheme, credit guarantee is provided for education loans covered under Indian Banks’ Association (IBA) model education scheme upto Rs. 7.5 lakh without any collateral security or third party guarantee.

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To disseminate information and streamline the application process, the government launched the Vidyalakshmi portal, vidyalakshmi.co.in.