I’m Mugunth Kumar, a post graduate who will be completing my Masters in Singapore this year (in another two months).
In the year 2000, I approached Indian Overseas Bank for getting an education loan for financing my undergraduate studies. The manager was very adamant and was not interested in giving me a loan as I don’t meet the “required” criteria (bribe on demand?) and rejected my loan request. Nevertheless, I was funded by my relatives and pursued my education. Two years later, when I learnt that the manager got transferred, I went again and asked the new manager in charge. He approved the loan, after getting a collateral document worth 50 times the loan amount and even reimbursed my older (first two years) education fees. I don’t have an idea why he asked for a collateral when P. Chidambaram has clearly stated that for any loan amount lesser than 4Lakhs, collateral security is not needed. I was lucky. I had this property to be pledged in lieu of the loan disbursed. What will happen to those poor Indians who aren’t rich enough to pledge properties? Despite Govt’s orders, how can these officials create their own rules? Let me leave that for another blog post. I don’t want to digress from the main topic.
Finally in 2004 I managed to complete my education and got a job through my campus placements and also started repaying my loan. The loan amount was 192,000 and the interest accrued went upto 240,000. Yeah in India, interest of 12% accrues even while you are studying. So beware! I took my loan in 2003, so it was only 40000. Had I got my loan in my first year, I would have to pay an insane amount of 2.8L for my 2L loan.
I was working in India for about three years till 2007 June, and had managed to pay around 1.8 Lakhs in the mean time (5000 per month). After that, I wanted to pursue my higher studies and went to the manager (around Nov 2006) seeking an education loan extension. Again, the manager changed and he didn’t give me despite my prompt payments. As Singapore govt was kind enough to finance my educaiton through scholarships and gave me a education loan grant for the uncovered amount, I came to this country hoping that I would get a loan here. I went to the bank (OCBC) and showed my passport and my admit letter. Five minutes later, my loan was disbursed. No questions asked…
Meanwhile in India, this manager also resigned, and I spoke with the new manager regarding stop payment for my education loan. I explained him that I had got an offer to do Masters and willing to pursue in Singapore. He being new, offered me a loan after seeing my payment record. I told him that I got scholarships and tuition fee grants from Singapore govt and asked him if I can temporarily stop paying the loan for two years till my graduation in July 2009. He accepted it. But unfortunately, due to some reason he was transferred and a new manager took the office.
He immediately sent some people to threaten my parents to start paying back the loan immediately. How can a nationalized bank like IOB do this?
In Singapore, after I got a job, I went to that bank and told them I want to start my repayment. I started repaying my loan (200$) every month from March. From April my bank account was not deducted for the loan. I went and asked OCBC. They told that because of recession, Singapore govt has asked them to stop taking repayments from students as some of them have not gotten their jobs after graduation. They also told me that I have to pay back the loan only from next April and till then interest will be frozen. Singpaore govt could have easily told that these rules apply only to citizens, and all foreigners should settle their loan immediately. But they didn’t. They cared for us. In turn, back in India, IOB sent some minions to threaten my aged parents when I’m here. Isn’t there a way to report this?
Is Mr. P Chidambaram dead or asleep? Why did he so blatantly told that education loan is available for students without collateral? To threaten us later? Does he ever know that something like this is happening?
I’ve now repayed my loan in full. But what will happen to people who didn’t have money? People who are stuck in this recession? Should they die in the hands of those minions??
Someone please help me.
–
Mugunth
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9 Responses to “Indian Overseas Bank sending minions to threaten education loan customers…”
Cant really understand what help you may need now, since you have repaid the loan!!
You got a loan at OCBC in five minutes. Thats good; and thats exactly why so many US banks have collapsed in the past few months and the whole world is suffering!! Thank God, Indian banks are sensible, or atleast governed sensibly.
What is surprising to me is that you had a bad experience initially; Why on earth did you have to go back to them again?? Didnt you have any other bank or branch to go to??And then, there are banking ombudsman who is always available to report any ‘unreasonable’ demands by the bank. Thats all the ‘help’ I can suggest!!
Wow, that is quite scary. And very ugly looking for such a bank to threaten.
I understand that the bank can take legal actions for like mortgage loans, but taking such actions for tuition fee loan is not appropriate.
But I also have to agree with Srivatsava, for instance like – don’t give out loans easily.
And from the bank side, it might not be in their best interest (or policy) to freeze the loan interest. Dilemma dilemma
I really cant agree with your statements on education loan Vs giving the loans easily. Compared to an education loan which may cost upto a few thousand dollars, the cost of a property may span more than a million. Moreover, a loan for a housing property is a long-term commitment unlike the latter. There are evidently many differences between the two. Any banks does not give the education loan as easily as you think. It checks for your letter of offer, your bank balance and a list of checks goes. Even if your loan amount is less than 4 L, you need to get it signed from a gurantor, save that you arent required to bring in a pledge of your investments.
Cont…
A loan is something you need to provide to some one who needs it as *he* cant afford. A loan approval needs to be in time so that it doesnt affect the loan seekers interest. I am not mentioning here that the bank should approve all loan applications it receives. What is required, is approve those which are genuine in its framework. You guys just want to get very sure about the fact that the loan seeker would pay the amount back. To do this, you keep scrutinizing the application, unless the pissed off guy or the need for the loan disappears. US banks are insensible in their leniency in providing loans. Indian banks are also insensible in not giving loans for people who really need them.
US bank collapsed mainly due to investments in high risk debuntures and this event was triggered by the mortgage crisis. This is an issue off-side to the topic. My 2 cents.
//US bank collapsed mainly due to investments in high risk debuntures and this event was triggered by the mortgage crisis//
Educating a citizen is not a "high-risk" debunture… The problem is, the guy wanted some "%" of money for approving the loan and that "%" was too high…
one month before i went 80feet road , iob , k.k.nagar, madurai , i applied my educational loan, meet the manager he asked to me education loan only for BE and Medicals not BED degeree so i ask head office (BED ) to give or not,
two weeks after he given the application form our college quotation 61000 i applied after two days the manager said only 5000 to give that course , so you are agree to given or to go another bank.
Banking System In India (Govt Banks)
Managers are not public servants ,they are lording govt money .If you go through some agents ( Normally Chartered Accountants ) ,they charge 2%to5% of loan anmount ,you get the loan . CA or other agents shares this booty with Bank Officials . So whatever money you need ,hire an agent and get the loan .
This is not only at operational levels , but even top officials share the booty in big loan amounts . That is why everybody wants to work in credit Department .
So Banks in India are Corrupt
IS ANYBODY LISTENING ………………!