Southern states of Tamil Nadu, Kerala, Andhra Pradesh and Karnataka account for about 50 per cent of education loans disbursed by public sector banks.

Of the total outstanding education loan of Rs 49,069 crore as of March 2012, these four states among 35 states and union territories account for as much as 54 per cent of the total disbursement.

Disbursement of education loan has been highest in Tamil Nadu with outstanding loan of Rs 11,625 crore followed by most literate state Kerala with Rs 6,180 crore.

As per official data, Andhra Pradesh and Karnataka accounted for Rs 5,215 crore and Rs 3,479.80 crore respectively. Education loan disbursement in these four states put together stood at about Rs 26,500 crore at the end of 2011-12.

In terms of disbursement, union territory of Lakshadweep was lowest with disbursement of just Rs 0.38 crore followed by Daman and Diu at Rs 2.91 crore.

Over Rs 49,000 crore education loan has been disbursed through 24.60 lakh accounts at the end of March 2012.

In order to promote education loan, Finance Minister P Chidambaram recently directed banks not to reject such loan applications without sufficient reasons.

“No application should be turned down by the (bank) officer who is receiving it. It can only be turned down by one level higher. They will now penalise branch managers who turn down, say, 5/10 deserving applications which are overturned by a superior officer,” Chidambaram had said last week.

The Indian Bank Association (IBA) would come out with a new circular on education loans in the next few days, he had said.

“Bank loan is the right of every student who meets the parameter. No bank can turn away an applicant. Every application for a bank loan must be received and acknowledged and every deserving candidate must be given the loan if the student meets the parameter,” he had said.

Education loan is granted to Indian nationals for pursuing higher studies in India or abroad. As per its website, State Bank of India gives loan of up to Rs 10 lakh for studies in India, and Rs 30 lakh for education abroad.

Such loans are usually extended to candidates pursuing professional courses from approved universities or from autonomous institutions like IITs and IIMs, among others.

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