Why Does Bank of Maharashtra Offer Only 2 Education Loans? – An FD Opinion Piece
The short answer is: we don’t know. But if we are to take what we think are good guesses, it is a smart move from a bank that is not very large and realises it cannot compete in a market crowded with bigger players with low-interest income.
Here you have to remember that the bank is a nationalised or a public sector bank and laden with the mandate to offer banking services to an ever-growing segment of the population despite the cost. For a bank to survive and even grow in such a scenario requires tremendous juggling ability in the top management.
On one hand, you have old, creaky infrastructure (if you have been in a few Bank of Maharashtra or even most public sector bank branches, you will know what we mean) and bank employees who see themselves as purveyors of banking justice rather than conveyors of social justice (again, if you have been in a few branches….). And on other hand is social justice and financial utopia (or financial inclusion as it is called).
To take these two opposites and create a cash-positive bank means you have to offer loans and products that bring in as much money as possible or in other words, regular personal and business loans. Education loans with their 6-9% average interest rates will hardly be able to cover the interest cost of the capital employed.
Mystery solved. Right, Watson?
And in case you wanted to know here are the two education loans from Bank of Maharashtra.
Loan #1: Bank of Maharashtra Education Loan Scheme for Higher Education in India or Abroad
This education loan is designed to provide financial support to meritorious students for pursuing higher education within the country as well as overseas. Maximum loan amount for higher education in India is Rs 10 lakh and for abroad it is Rs 20 lakh. The loan amount can be higher but this is decided by the bank on a case-to-case basis (which is a beautiful way to convey the lack of clarity from Indian public sector banks in any information).
Loan #2: Bank of Maharashtra Skill Loan Scheme (or the Pradhan Mantri Kaushal Vikas Yojana)
This loan is for students who pursue skill development courses. The bank checks whether the candidate meets the eligibility criteria to pay for their course fees and related expenses.
The loan amount starts from Rs. 5,000 and can go up to Rs. 1.5 lakh depending on the duration of the course.
To wind up, a small message:
If you are looking for a personal or business loan, you can use our form here to apply to 40+ banks and FIs.
Don’t worry, we don’t send your application to 40+ banks and FIs as it will mess up your credit score. We offer free custom applications where we check your application in-house first and then check it with a bank or FI that is more likely to give you a loan. If they say no, we update you and check with a second bank or FI. We do this three times and if all applications are rejected, we give you free suggestions on the next best steps.
For your information, we don’t do instant loans. They are stupid.
Here is the link to apply again: Click to apply to 40+ Banks / FIs in a single form.