Political parties criticise SBI's move to hand over study loans recovery to Reliance

Chennai: Political parties have reacted angrily to State Bank of India handing over to Reliance Asset Reconstruction Company (RARC) the task of recovering study loans from students.

Both Communist parties have in a strongly worded statements demanded the SBI to rescind its arrangement with Reliance and “spare students who had only borrowed in good faith from the bank to pursue education and repaying the loans in good time.

“Many students who had taken bank loans to pursue higher education are reeling under severe stress after failing to get a job. In such a situation, SBI has adopted a more cruel way to recover the debts,” CPI (M) state secretary G. Ramakrishnan said.

In Tamil Nadu, over 10 lakh students had borrowed Rs 17,000 crore as education loan. Of which Rs 1,875 crore had become bad loans. SBI had written off Rs 847 crore as non performing assets and sold it over to RARC for Rs 381 crore, he said, adding that Reliance in turn had started threatening students who had taken the loan to repay it. The State government should immediately intervene in the matter.

CPI secretary R. Mutharasan demanded the SBI to immediately cancel its agreement with RARC to recover education loans from students. “”SBI has been continuously acting against the poor. Recently, when it advertised to fill up vacancies, it asked those who had taken education loans not to apply.

A BE graduate, requesting anonymity, said he had got a notice from Reliance ARC asking him to pay up his loan dues immediately to avoid penal action. “I am working as a marketing executive in a private company. With my salary, I cannot even support my family needs,” he said.

S. Senthil from Tirupur said he had taken an education loan from SBI, Tirupur branch for the period from 2008-12 to pursue BE. He said without any notice, SBI has transferred his loan to Reliance ARC. “I was given the phone number and email ID of the person in Reliance ARC. But when I called and mailed , I did not get any response. How can I know my outstanding dues? I fear delay will increase my outstanding,” he said.