Education Loan Defaulters

Failure to repay an education loan may cost you dearly-Business Line

R RAVIKUMAR

CHENNAI, JULY 29:  

With banks getting serious about reducing their non-performing assets (NPA), students defaulting on education loans may face serious consequences.

Long-term impact

The rising delinquency in education loans is forcing lenders to consider various options to recover their money, including reporting defaulters to the credit information agencies such as Credit Information Bureau India Ltd (CIBIL).

A poor credit rating from these agencies will impact the individual’s credibility and close his/her chances of getting a loan from any financial institution in the future.

According to sources in the industry, public sector banks’ exposure to the segment has crossed ₹60,000 crore. Their delinquency rate has been hovering at around 9.5 per cent, more than double the average NPA rate of 4.5 per cent.

Private sector banks are no exception. In a recent interview with BusinessLine, Shikha Sharma, Managing Director and CEO of Axis Bank, said credit losses were very high in the education loan portfolio and that such loans are “becoming very unviable for us”.

Attributing the trend to the mushrooming of educational institutions unable to offer quality education and their students failing to get placed immediately after passing out, Sharma said the bank was working with institutions to ensure placement.

Stemming the tide

A senior official at a public sector bank told BusinessLine that following “an instruction” from the Central Government some time ago, most banks had refrained from sending defaulters’ names to credit information agencies.

“But, as delinquency rises, we are pushing for that. We have approached the Indian Banks’ Association (IBA) to take it up with the Finance Ministry to facilitate reporting to companies such as CIBIL” said the official.

Mohan Jayaraman, Managing Director, Experian Credit Information Company, considers this a positive trend. “Because, it is not just delinquency report; people who are repaying on time also come in our records. This is all about entering the credit system, and it will help them in the long run,” he explained.

“We have a couple of banks reporting to us on their education loan portfolio,” Jayaraman added.

TM Bhasin, Chairman and Managing Director of Indian Bank, said the bank has a total exposure of ₹3,200 crore in this segment, and the delinquency rate is around 8 per cent. The bank proposes to organise awareness campaigns for students in India and abroad to make them realise their responsibility to repay loans once they get employed, he said.

Safety net

He also said that public sector banks have collectively asked the IBA to request the Finance Ministry for an increase in the proposed corpus of the Education Credit Guarantee Fund. The earlier Government had proposed to set up the Fund with a corpus of ₹2,500 crore to guarantee education loans ranging from ₹4 lakh to ₹7.5 lakh (loans above ₹7.5 lakh are issued against collateral).

These loans will be guaranteed up to 75 per cent of the amount outstanding with interest as on the date the account is declared a non-performing asset. Since education is one of the priority sectors under which banks are mandated to lend, and the Union Finance Ministry is keeping a close watch on lending by public sector banks under the scheme, the loan portfolio of banks has been steadily increasing.

Link Business Line

Indians Working Abroad

Indians continue to emigrate for better work opportunities and study

Report as of November 2011 :---India has the second highest number of emigrants in the world, with 2010 seeing 11.4 million Indians moving abroad. Indians leave typically to work in higher paid jobs abroad and to study abroad.

India provides a number of services to Indians living abroad. According to the Ministry of Overseas Indian Affairs, international migration is important impacting on economic relations between the developed and developing countries. In 2006 the Emigration Policy Division of the Ministry was established to help the ever growing number of Indians living abroad.

With a population of nearly 1.2 billion people, India has also taken in 5.4 million immigrants of its own in 2010, according to the 2011 Migration Factbook by the World Bank.

Emigration from India is nothing new; For centuries Indian workers have been emigrating to various countries around the world. In the post-colonial era two patterns of emigration emerged from India, one took place mainly to the industrialised countries, particularly the UK, the US, Canada and Australia; and the other one was directed towards the oil rich Middle Eastern countries.

Below is information regarding Indian emigration to the following countries:

Australia
According to the Australian Bureau of Statistics, in 2006 India was the fourth major source of permanent migrants to Australia. In 2009-2010, the number of Indians migrating to Australia totalled 23,164, including those applying for visas and settlement. Additionally, easier Australian student visa requirements are now being implemented so more Indian students can attend university in Australia.

UK
Indians began arriving in the UK in large numbers around 1947, shortly after their country gained independence. Before 1947 Indians moved to the UK in relatively small numbers. The UK Office of National Statistics estimates around 1.5 million Indians currently live and work in England, making them the single largest visible ethnic minority population in the country. The UK uses a point based scheme by which specific points are awarded to all potential immigrants based on the applicant's age, financial situation, educational qualifications, English language ability and other factors.

US & Canada
Currently, India is the second largest source of legal immigrants to Canada, with between 25,000-30,000 immigrants settling in Canada every year. Indians move to the US and Canada for skilled jobs and, ultimately, can seek settlement. In 2009, the US granted permanent residency to 69,162 Indians and, as of 2010, over 1.7 million Indians live and work in the US.

Indians emigrating to moving abroad can apply for work or residency visas withWorkPermit.com. 

WorkPermit.com has been dealing with visa applications for over twenty years. Our Consultants and Lawyers would be delighted to have an opportunity to help you with your visa application. Please feel free to contact us for further details.

5 Reasons Why Indian Students Aspire To Go Abroad

With all that development in the education system all over the globe, have we ever thought that why 70% of the youth population from India aspires to study abroad and why some even want to settle there? It’s not that India is not progressing in the field of education; rather, it’s just that the system, in my opinion, needs a change. Indians always crib about the brain drain, but it would be better if attempts are made to make things more open for the young in your own country. We have to analyse what exactly went wrong in the country which boasted of ancient and famous universities like the Nalanda University. Here I have just tried to stack up a few reasons why students like me, aspire to study abroad.

1. The new generation has developed a craze of studying in five-star type universities. And truly, universities abroad are not just a study place. Rather, they are a different world altogether with a plethora of indoor and outdoor facilities that one can hardly imagine in India. Well, on this point, different people have different views per se.

2. Many of us may have seen the flick Yeh Jawani Hai Dewani. Remember the time when Ranbir Kapoor says - “mein poori duniya dekhna chata hu,dhat aisi ghisi pitti life thodi jina chahta hu main…main udna chahta hu, girna chahta hun bas rukna nahi chahta. And so on… Well, the reason behind giving this particular example was we all could relate to him more or less. I am sure most of Indians have our own unique dreams which cannot be fulfilled in this country if you are an average performer (forget average, nowadays even MBAs are unemployed!). There is no point being so pessimistic about India but here unfortunately here, we concentrate on academics while abroad, young people get opportunities in many other fields like PR, Sports. Media, Arts etc. which are misunderstood as secondary hobby activities out here.

3. Recently, I met one of the my friends online, who studies in the University of South Florida, Tampa. The way she described her life was thus – some hours of class every day and exploring the nearby places with friends the rest of the time. The point here is that in foreign universities, you meet people from different nationalities, cultures which actually helps in shaping up your own personality. Also, that gives you a chance to see the world and results in greater exposure..

4.

This is definitely one of the prime magnetic forces which drive youngsters abroad. Today, even parents love harping over the fact that their children study abroad. Gone are the days when one could afford international education only if they were rich. Today, there are numerous education loans schemes available, which when amalgamated with scholarships, study abroad schemes, etc. provide students with a plethora of options.

Also, international universities welcome Indian students because of their proven record of possessing arguably the best combination of hard-working and intelligence characters.

5.

Coming onto this point, you would expect the discussion of economic points like the inflation rising day by day and maximum number of earning family members needed to live the desired lifestyle. Practically speaking, that is true and India actually does not offer proper incentives to talent – there are so many stringent hierarchy levels to be followed here…so many emotions to be handled.

Towards the end, I would just like to say that studying abroad is not a sin, as far as one is aware of their roots and nurturing, and actively try to contribute to the betterment of their motherland, not only financially, but also culturally and emotionally.

What Government and Non Resident Indians should think in the interest of the country as also for own Indian families

Indian Youth do not get enough salary in India though they have huge potential and huge knowledge to give to employer. Indian employers treat employees as slave whereas foreign  companies treat their employees as assets. This is why working atmosphere is said to be better in foreign companies and that too at foreign countries.

Majority of talented youth aspire to go abroad to earn money. Many of them start hating India and become citizen of other country where they are in job. They not only start hating India but forget Indian culture and start abusing Indian culture. Food habits change, Clothing is accepted and praised as per western culture and overall life style is changed .

For example ,Indian female who start wearing western short dresses feel suffocated and awkward when they are said to or constrained to wear sarees or salwar kurti when they are back in India to live with their Indian parent. Similarly Indian males who find interest and in visiting and enjoying foreign hotels, malls ,parks, sea beaches, games,casinos etc find difficult to adjust in Indian environment when they come back to India.

In brief Indians working abroad for a year or two or more ,When such people come back to India for some reason or the other they find it horribly difficult to adjust in Indian atmosphere , they hate Indian style parent and Indian style friends. Ultimately Indian become advocates of Western culture . It is important to point out here that American and citizens of even European countries have developed immense fascination towards Indian dresses, Indian foods,Indian religious functions and festivals and they are trying to learn adapt Indian beauty and India's beautiful culture.

I have no doubt that the trend of Indians going abroad for education and jobs is alarmingly increasing and undoubtedly making India weak gradually and there is no doubt that in the long run it will prove to be disaster for families who send their children abroad for better education and better income.

Indians who are born and brought up in India, who got their talent and knowledge in Indian environment, who got their education in India, who inherited Indian culture of living together, who got their virtues in India and who got elevation in their life with the love and affection of their friends and family members start abusing Indian culture, Indian atmosphere, Indian government once they get job abroad and earning income many times what they could get in India.

I agree that it is Indian government to blame that they failed during last 67 years of their rule to Make India better than USA , UK and other developed countries. But it is also true that prosperity and development  which  countries like USA and UK  have achieved is also to a great extend contributed by Indian talent working there. This is why countries like USA and UK invite talented Indians and give them huge money and respect . It is unfortunate that Indian government does not give much value to their own talented Indians.

It is true that Indian government failed to stop exodus of Indian talent from India, but it is the moral duty of Indians also who are talented and intelligent to think about their motherland and do their best for their country. 

A person can not forget or ignore or discard his or her mother even if she is not beautiful, even if she is weak, she is illiterate or traditional minded, or hard core religious, or she believes in Indian clothing ,or she is blind, handicapped,  uneducated, unskilled, or uncivilised or even if she is sick or suffering from any disability , shortcoming or deficiency. Similarly all Indians are bound to have and must have love and affection for their mother land India. It is their duty to think for, to make effort , to plan , to teach the ways and strategy to make India great , greater than all other countries.

I however request Narendra Modi to pay his special attention on this issue and try his best to stop exodus of Indians from India for better education or better job. If Indian talents are used for the growth and development of India , I have not doubt that India will reach to greatest height in its glory and prosperity. I hope Mr. Narendra Modi will try his best to restore the value of India, Indian education system, Indian culture, Indian values, Indian heritage and All virtues which India used to possess in the past.

There is no doubt in the fact that Indian government is earning huge foreign exchange through Non Resident Indians working abroad. But developing country like India cannot afford sacrificing Indian talent at the cost of  Indian industries and Indian values .This is India where Indian government do not ban sale of wine only because it is a source of income for the government.Wine is root cause of several crimes but government do not bother only because they want source of revenue to continue.Consumption of  Tobacco products like pan parag, cigerette, khaini,gutka etc is prone to several critical diseases . But government do not ban manufacturing of such harmful product only because they are source of their income.

Last but not the least , I request Indians who are abroad either for getting higher education or for getting better job or for extending any service should glorify Indian culture and Indian values by their action, living style ,their behaviour, their social life , their working culture ,their love and respect to youngsters and elders, their religious nature, their attitude and so on . They should refrain from adopting and adapting western culture in the name of modernity and should not become victim of western bad culture  which does not suit in Indian environment. Wearing cloth gives ample opportunity for adopting modern fashion and not discarding or shrinking cloth and dresses.Similarly taking wine cannot be considered as sign of modernity . Indian Thandai, sikandi (lemon made sweet juice)or fruit juice are undoubtedly the best .Western music may be part of entertainment, may be lovely and soothing to ears but Indian music is in no way inferior .

If due to some reason or the other Indians prefer overseas job and Indian government like Indians working abroad to earn foreign exchange, I suggest Indians working abroad to demonstrate Indian values, Indian culture and Indian priorities on foreign land too and do not become victim of Indian dirty culture .

Number of Indians working abroad --country wise

Number of overseas workers

Uttar Pradesh sends most Indian overseas workers 24th June 2014

New Delhi: Which Indian state sends the largest number of expatriate workers? Did you say Kerala or Punjab? Neither.

It is Uttar Pradesh, the country’s most populous state, that sends the largest number of Indians to work overseas, according to the data from the Ministry of Overseas Indian Affairs.

In 2012, the northern Indian state sent 190,000 people to work overseas.

After Uttar Pradesh, it was Kerala (98,000), followed by Andhra Pradesh (92,000), Tamil Nadu (78,000), Bihar (84,000), Rajasthan (50,000) and Punjab and West Bengal (both around 37,000).

The numbers for Punjab have fallen considerably, from 54,000 in 2008 to 37,000 in 2012. Punjab sends so many workers abroad, while neighboring Haryana sent only 1,200 in 2012.

Some large states with large numbers of poor people send very few migrant workers: 5,000 from Jharkhand, 1,800 from Madhya Pradesh, 7,000 from Odisha, 1,100 from Chhattisgarh. This could be because of lack of family networks already working abroad, and the paucity of skilled labor.

The remittances sent home by Indian workers abroad went up from US$15.8 billion in 2001-2002 to US$70 billion in 2011-2012.

Most Indian expatriate workers find jobs in the Middle East. After Saudi Arabia, migrant workers choose United Arab Emirates, Oman, Qatar, Kuwait, Malaysia, Bahrain and Jordan.

The Indian migrant workers began returning to Iraq relatively recently, only in 2010. Other destinations of economic migration are Afghanistan, Indonesia, Lebanon, Libya, Sudan, Syria, Thailand and Yemen. However, there has been a drop in numbers in countries affected by the Arab Spring.

These numbers reflect only legal migration, covered by the Indian government’s “Employment Check Required” mechanism, which tries to prevent slavery, human trafficking and ensure the security of workers abroad in emergency situations.

Saudi Arabia is the prime destination for Indian laborers working abroad. Between 2008 and 2012, over 3.5 million Indian laborers went to the Arab nation.

http://mattersindia.com/uttar-pradesh-sends-most-indian-overseas-workers/

Mayaram Report Accepted By Government

Govt accepts Mayaram panel’s report-Hindu Business Line

New Delhi, June 21:  

The Government has accepted the report of Mayaram panel related with removing ambiguity in the definition of Foreign Direct Investment (FDI) and Foreign Institutional Investors (FII). Now, regulatory changes will be required to put the new regime in place.

The panel was constituted last year under the Chairmanship of the Economic Affairs Secretary Arvind Mayaram after then Finance Minister P Chidambaram announced in the budget. The Committee, in its report, suggested 10 per cent or more foreign investment in a listed Indian Company should be treated as FDI while below 10 per cent to be considered as Foreign Portfolio Investor (FPI). FPI combines two categories of foreign investors, FII and Qualified Foreign Investor (QFI). The panel also said that for an unlisted company even one dollar worth of foreign investment would be considered as FDI.

 

The core recommendation of the panel is that it should be the Endeavour to simplify the classification of foreign investment and enable basically two classes of foreign investors in the long run viz. Portfolio Investors and FDI Investors, and at best carve outs therein for NRIs, in view of their special status.

 

The panel adopted the conceptual framework that FDI is “characterised by a lasting interest i.e. existence of a long term relationship, significant degree of influence. Normally, ownership of 10 per cent or more of the ordinary shares or voting power signifies this relationship and it involves both initial and subsequent transactions.” On the other hand, Portfolio Investment is identified by the largely anonymous relationship between the issuers and holders, and the degree of trading liquidity in the instruments. Further it covers, but is not limited to securities traded on organized or other financial markets, it mentioned.

 

It has also specified that in a particular company an investor can hold the investment either under FDI or FPI route, but not both.

 

FDI

It recommended, “Foreign Investment of 10 per cent or more through eligible instruments made in an Indian listed company would be treated as FDI. All existing FDI below the threshold limits made under the FDI route will, however, continue to be treated as FDI.” The Government has provided various limits for FDI in various sectors. For example, FDI limit for multi-brand retails is 51 per cent while for Insurance, it is 26 per cent.

The panel further suggested that investment below 10 per cent as FDI could be possible but only with a caveat that the foreign investment “stake is raised to 10 per cent or beyond within one year from the date of the first purchase.” It also said that the obligation to fulfill that condition would be on the company.

 

“If the stake is not raised to 10 per cent or above, then the investment will be treated as portfolio investment,” the report said adding that in case an existing FDI falls to a level below 10 per cent, it can continue to be treated as FDI without an obligation to restore it to 10 per cent or more as the original investment was an

 

FPI

The panel has said that any investment by way of equity shares, compulsory convertible preference shares/debentures less than 10 per cent of the post issue paid up shares of a company will be treated as FPI. At the same time, “investments by foreign investors under private placement of less than 10 per cent of post issue paid up capital will be treated as FPI.”

 

The panel felt that necessary checks and balances need to be placed to ensure that the FPI do not act in concert or a “single FPI investor does not circumvent the regulator framework by splitting the investment or by acting in concert with other.”

 

NRI Investment

Regarding NRI investors, the panel said that they have a special place in the foreign investment regime since NRI funds flow even through deposits and remittances. Special privileges are also available to NRIs in terms of the Overseas Citizenship Act and the provision to make ‘non-repatriable’ investments. “This position would remain and to reinforce the same, it may be further examined if non-repatriable investment by an NRI can be treated as “domestic” as also an enabling mechanism to enable such investment to come through via a corporate form,” it suggested.

 

It also called for a relook at the Foreign Venture Capital Investors (FVCI) scheme since these investors are basically in the nature of FDI.

Link Hindu Business Line

Indian Can Carry Rs.25000 Overseas Tour

Residents, non-residents allowed to carry up to Rs 25k abroad: RBI--Financial Express

The Reserve Bank of India (RBI) today permitted residents and non-residents, except Pakistanis and Bangladeshis, to carry up to Rs 25,000 in Indian currency notes while leaving the country. 
 
Earlier, Indians travelling abroad were permitted to carry only up to Rs 10,000, while foreigners were not allowed to carry Indian currency while leaving the country.
 
"...it has been decided to allow all residents and non-residents (except citizens of Pakistan and Bangladesh and also other travellers coming from and going to Pakistan and Bangladesh) to take out Indian currency notes up to Rs 25,000 while leaving the country," RBI said in a notification.
This, RBI said has been done in view of the evolving economic conditions and to facilitate travel requirements of Indians travelling aboard as well as foreigners visiting India.
 
The announcement to this effect to allow more currency while travelling abroad had come in RBI's second bi-monthly Monetary Policy Statement on June 3.
 
As per Foreign Exchange Management (FEMA) Act, a resident can carry to Nepal or Bhutan, Indian currency without any limit in denominations not exceeding Rs 100.