Goverment directs banks: ‘Don’t publish pics of education loan defaulters’
The Union Government has directed banks not to publish photographs of education loan defaulters in newspapers. The banks have been adopting ‘name-and-shame’ policy to force borrowers to pay up defaulted loans, but the step by the government may act as a shield for the youth.
When the Bombay High Court refused to stop publication of photographs of a defaulter firm, saying it was in larger public interest and in its ruling prompted banks to even publish names of some education loan defaulters, then the Government of India (GoI) officially stated on the public identification of defaulters that the same yardstick cannot be applied to all cases.
Note: The directive comes at a time when in the interim budget, the government declared an interest subsidy scheme on unpaid education loans. The government would provide interest subsidy on outstanding education loans sanctioned before March 2009. The move will cost the exchequer Rs 2,600 crore. Most students are not wilful defaulters. A large section where loans have gone bad is mostly because of unemployment.
Categories: Business, Economy & Banking