Banks shying away from education loans: RBI

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Follow us:WhatsappFacebookTwitterTelegram.cls-1{fill:#4d4d4d;}.cls-2{fill:#fff;}Google NewsBanks are shying away from giving education loans and the Reserve Bank of India’s Office of the Banking Ombudsman (OBO) in Chennai says more than 50 per cent of complaints regarding loans and advances pertains to banks’ denial of education loans.Addressing reporters here on Friday about OBO’s annual report, RBI deputy general manager Suman Nath and banking ombudsman S Ganesh said their office received 6,877 complaints relating to loan and advances. Of these, over 50 per cent pertained to denial of education loans. It is only after the intervention of the OBO that banks started processing the loans, said Nath.The report also highlighted that the highest number of complaints pertain to ATM/debit and credit cards, accounting for 24 per cent. The OBO has disposed of 6,458 complaints of the 6,877 handled and only 419 are pending. Surprisingly, 63.5 per cent of the total complaints were against public sector banks, followed by private and foreign banks, said Ganesh. The officials also disclosed that the bank has passed three orders in three different cases.One pertains to unauthorized online transaction where the bank failed to alert the customer.The second case pertains to a fraudulent online transfer where the bank did not follow ‘know your customer’ (KYC) norms by not establishing the identity of the person opening the account. The third award was given in a case where an old fixed deposit was not settled.first published:August 31, 2012, 07:47 ISTlast updated:August 31, 2012, 07:47 IST
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Banks are shying away from giving education loans and the Reserve Bank of India’s Office of the Banking Ombudsman (OBO) in Chennai says more than 50 per cent of complaints regarding loans and advances pertains to banks’ denial of education loans.

Addressing reporters here on Friday about OBO’s annual report, RBI deputy general manager Suman Nath and banking ombudsman S Ganesh said their office received 6,877 complaints relating to loan and advances. Of these, over 50 per cent pertained to denial of education loans. It is only after the intervention of the OBO that banks started processing the loans, said Nath.

The report also highlighted that the highest number of complaints pertain to ATM/debit and credit cards, accounting for 24 per cent. The OBO has disposed of 6,458 complaints of the 6,877 handled and only 419 are pending. Surprisingly, 63.5 per cent of the total complaints were against public sector banks, followed by private and foreign banks, said Ganesh. The officials also disclosed that the bank has passed three orders in three different cases.

One pertains to unauthorized online transaction where the bank failed to alert the customer.

The second case pertains to a fraudulent online transfer where the bank did not follow ‘know your customer’ (KYC) norms by not establishing the identity of the person opening the account. The third award was given in a case where an old fixed deposit was not settled.

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