Bihar Cabinet clears setting up Education Finance Corporation to disburse education loans2 min read
PATNA: The Bihar Cabinet on Saturday gave its nod for setting up of a ‘Bihar State Education Finance Corporation’ in order to disburse loans for Student’s Credit Card (SCC) scheme in view of banks’ reluctance in doing it.
The meeting chaired by Chief Minister Nitish Kumar gave green signal to proposal of Finance Department to set up the corporation in order to disburse education loan among students, Cabinet Department’s Special Secretary Upendra Nath Pandey told reporters here.
The corporation will come into effect from April 1, 2018, Pandey said adding a total of 131 posts have been created for the corporation. It will be headed by a Chief Executive Officer (CEO), he added.
It may be noted that Deputy Chief Minister Sushil Kumar Modi, while reviewing the loan disbursement by various banks in the state on February 5 last,had said that state government would set up a corporation to disburse loans for scheme.
“The banks appeared reluctant in disbursing SCC loans as their performance on this count was not satisfactory,” Sushil Modi, who also holds finance portfolio, had said.
The FM had made it clear that banks will continue to disburse education loans as it has been doing along with the SCC scheme.
Notably, the Bihar government launched the SCC scheme on October 3, 2016. Under the scheme, students are able to get education loan of upto Rs 4 lakh for pursuing higher education after completing 10+2.
The idea behind launching the SCC is to help increase gross enrolment ratio from current 13 per cent to 30 to 35 per cent in few years.
Banks have received 17,500 applications which have been routed through the government for SCC loans so far since its launch and the banks have sanctioned loans for 14,500 applications, bank sources said.