For most individuals, a sound higher education is the passport to a secure future. And, for working professionals, it’s a way to boost their academic profile. However, the cost of higher education has increased a lot. The good part is the increased effort by the government to make education loans easily available and attractive. Education loans fall under priority sector lending. Earlier, you could claim deduction under Section 80E of the Income Tax Act only in respect of interest on loan taken, for pursuing higher education in specified fields. But now you can claim deduction for all courses, including vocational studies, after completion of school. No wonder education loans have become popular, and this is reflected in the data of the institutions that qualified for this award category. Among them, except for two, all others saw an increase in the number of education loans sanctioned in FY 2009.

Parameters

Winner: Dominating the Market

Winner’s Edge

• Low Interest Rate
• Speed of Loan Approval & Disbursal
• Low Penalties

The bank was also the winner in this category in the 2008 edition of the Awards. Central Bank of India performed fairly well across most parameters. However, there were two areas where the bank didn't fare well. First, the number of defaults in FY 2009 compared to FY 2008. Second, the average number of loans sanctioned per branch was very low compared to other players.

The major factor that led to Central Bank of India topping the tables was its offer of education loans at the cheapest interest rate among the institutions in the running. Considering that public sector banks dominate this space, offering largely a similar product, the jury awarded the highest marks to the cost and convenience parameter and, within it, awarded the highest marks to the rate of interest.

Other factors that strengthened Central Bank of India’s position was the speed of approval of loan, speed of loan disbursal after approval, and low cheque bounce charges. Its wide reach only worked in the bank’s favour.

Runner-Up: Reaching Out

Best Education Loan Provider Runner-Up: Bank Of India
Alok Kumar Misra, Chairman & MD

In the performance and reach parameter, Bank of India topped the tables and even outscored the winner, Central Bank of India, and the joint runner-up, Syndicate Bank.
However, there are three areas where Bank of India slipped marginally, compared to the winner: rate of interest, speed of loan approval and speed of loan disbursal after approval. Factors that worked in its favour include wide reach, average number of loans disbursed per branch, low cheque bounce charges and concession to girl students.

Runner-Up: Low Cost Edge

Best Education Loan Provider Runner-Up: Syndicate Bank
Vinod Kumar Nagar, Executive Director

The bank did not fare as well on the performance and reach parameter as Central Bank of India and Bank of India. In fact, among the three banks, Syndicate Bank was in third position on this parameter. Syndicate Bank was among the few shortlisted institutions in this category that saw a decline in of loan disbursals in FY 2009 compared to FY 2008. However, the parameter where Syndicate Bank did well was cost and convenience. Along with Central Bank of India, Syndicate Bank topped the tables here.

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