Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 

4-Traders Homepage  >  Equities  >  NATIONAL STOCK EXCHANGE OF INDIA  >  Bank of Maharashtra Ltd    MAHABANK   INE457A01014

End-of-day quote. End-of-day quote  - 07/27
33.1 INR   --.--%
07/23 Educational loans gets cheaper this academic year as lenders drop..
05/13 BANK OF MAHARAS : down 2%; bad loans rise
05/13 BUZZING STOCKS : Manappuram Finance shines, Bank of Maharashtra fall..
SummaryQuotesChartsNewsCalendarCompanyFinancials 
News SummaryMost relevantAll newsSector news 
The feature you requested does not exist. However, we suggest the following feature:

Educational loans gets cheaper this academic year as lenders drop rates by 0.25%

share with twitter share with LinkedIn share with facebook
share via e-mail
0
07/23/2016 | 09:19pm CEST

Educational loan lenders State Bank of India, Bank of Maharashtra, Axis Bank have dropped interests on loans by about 0.25% over the past weeks, just in time for the new academic season, bringing rates to 2008 levels. The new rack rates for loans are between 10.8%-12.2% at public sector banks depending on tenure and loan size. Lenders charged rack rates higher than 13% last year.

Rising non-performing assets (NPAs) in the educational loan portfolio of banks are forcing banks to take a step back. For SBI the NPAs are nearly 28%, while private lender Lakshmi Vilas Bank has brought down its NPA to 22%. The credit guarantee fund created by the Union finance ministry to protect banks from the bad loan deluge is yet to see traction. "We have lowered rates to 10.3% now from 11% last year," said M Palaniappan, CFO of private lender Lakshmi Vilas Bank (LVB).

Earlier, banks pegged their educational loans to the benchmark prime lending rate (BPLR) and later moved to the base rate system. Since April 2016, however banks have started calculating auto, home, personal loans based on their marginal cost of funds-based lending rate (MCLR). With many banks now lowering their MCLR rates, educational loans have become a lot cheaper. Almost all banks have dropped MCLR rates by 0.25% to 0.75% over the past few weeks.

Top private lenders like ICICI Bank and HDFC Bank have reduced their interest rate on educational loans by nearly 200 basis points (100 basis points =1%) since June 1, to between 13%-17%; with loans being half a percent less for girl students. The rates vary by 1%-1.2% depending on whether the loans are secured or unsecured by collateral.

Axis Bank, which given student loans at 16.5% interest rates for less than Rs 4 lakh loans and 17.5% for Rs 4-7 lakh loans, currently has no plans to actively expand its educational loan portfolio. Other private lenders are also shying away from student loans fearing high delinquency ratio. While there is no mandate to provide collateral for loans less than Rs 4 lakh, banks agree to lower rates when collaterals are furnished to support the loan, sources said. The biggest defaults are in the sub Rs 4 lakh and above Rs 7 lakh category for banks, while the sweet spot is in the Rs 4 to Rs 7 lakh category.

"There are plentiful intentional defaulters, who are earning a lot of money and don`t pay back. Many of them despite being in high-earning jobs in India or abroad, expect their financially stressed parents to pay off their student loans. So we are not looking at expanding this portfolio," said an official at private lender, whose educational loan portfolio is within 2% of their overall book.

So despite lower rates on educational loans, students might not necessarily be able to avail of them. "NPAs can be steep in this segment. We`ve seen anywhere between 20%-25% losses. Students shift cities even countries. They are not in touch with us and it becomes very difficult for us to contact them as they are not at the address they took the loan at," says LVB`s CFO.

However, some public-sector banks are still keen on growth of their educational loan portfolio. At Bank of Maharashtra, the total outstanding in education loans is Rs 814 crore. "We have been consistently focused on growth in this direction. Our educational loans disbursed have increased to Rs 196.33 crore in FY16 from Rs 100.19 in FY14," says R K Gupta, executive director, Bank of Maharashtra.

(c) 2016 Cihan News Agency. All right reserved. Provided by SyndiGate Media Inc. (Syndigate.info)., source Middle East & North African Newspapers

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on BANK OF MAHARASHTRA LTD
07/23 Educational loans gets cheaper this academic year as lenders drop rates by 0...
07/08 Sbi card to have more co-branding with other banks
07/05 BANK OF MAHARASHTRA : BoM, AIRPAY CASHLESS PAYMENT PLATFORM
07/03 BANK OF MAHARASHTRA : Quarterly results - bank of maharashtra
07/01 BANK OF MAHARASHTRA : BoM PLANS TO RAISE Rs1,000 CRORE TO PROPEL GROWTH
06/30 BANK OF MAHARASHTRA : TO RAISE Rs1,000 CRORE VIA QIP/RIGHTS ISSUE
06/29 BANK OF MAHARASHTRA : BoM RAISES Rs500 CRORE BY ISSUING BASEL III BONDS
06/27 BANK OF MAHARASHTRA : Bom-sbi cards renewed agreement for credit card
06/23 Irb's agra-etawah project achieves financial closure
06/03 BANK OF MAHARASHTRA : BoM TO RAISE Rs1,000 CRORE CAPITAL VIA VARIOUS MODES
More news
Sector news : Banks - NEC
02:52aDJUNITED OVERSEAS BANK : 2Q Net Profit Rises 5.1%
02:14aDJOVERSEA CHINESE BANKING : 2Q Net Profit Fell
07/27 BANK OF NOVA SCOTIA : Canada's Tangerine Bank targets million new customers
07/27DJSingapore's Sovereign-Wealth Fund Sees Lower Returns Ahead
07/27DJSTANDARD CHARTERED : Names Jose Viñals to Be Chairman -- 2nd Update
More sector news : Banks - NEC
Advertisement
Chart BANK OF MAHARASHTRA LTD
Duration : Period :
Bank of Maharashtra Ltd Technical Analysis Chart | MAHABANK | INE457A01014 | 4-Traders
Full-screen chart
Technical analysis trends BANK OF MAHARASHT...
Short TermMid-TermLong Term
TrendsNeutralBullishNeutral
Technical analysis
Income Statement Evolution
More Financials
Managers
NameTitle
Sushil Muhnot Chairman & Managing Director
Nandkumar V. Pujari general Manager-Financial Management & Accounting
M. C. Kulkarni general Manager-Information Technology
Ateesh Singh Non-Executive Director
Ramadev Laxmichand Saydiwal Non-Executive Director
More about the company
Sector and Competitors
1st jan.Capitalization (M$)
BANK OF MAHARASHTRA LT..4.87%575
WELLS FARGO & CO-11.76%243 546
JPMORGAN CHASE & CO.-2.88%234 502
INDUSTRIAL AND COML BA..-6.33%223 634
CHINA CONSTRUCTION BAN..-12.98%173 350
BANK OF AMERICA CORP-13.67%149 251
More Results