The three financial banks namely, Druk Punjab National Bank, Bank of Bhutan and Bhutan National Bank have disbursed nearly eight billion Ngultrum worth of education loans to more than 1,700 applicants in a month. The banks had received more than 2,400 applicants. While some are still under process, a few did not fulfil the requirements. This comes after the Royal Monetary Authority allowed commercial banks to resume education loans last month.
As of 21st December, BOB alone has disbursed close to Nu 5bn worth of loans to more than one thousand applicants. From this, over 700 accessed the secured loans while over 300 availed themselves of the unsecured loans.
Similarly, BNB has disbursed about Nu 2bn to more than 620 applicants. The bank received more than a thousand applications.
Likewise, the PNB has disbursed more than Nu 123 M to 37 applicants as of December 22.
RMA has revised education loans into two schemes. In the secured scheme, banks can provide Nu 5 M where the applicants are required to mortgage properties equivalent to the proposed amount. In the unsecured scheme, the banks can sanction up to Nu 3.5 M.
The RMA has set a loan ceiling limit for loans as 5 per cent for unsecured loans and 10 per cent for secured loans of the total loans for each bank. This ceiling limit will be determined by the financial institution’s loan portfolio.
A loan portfolio is the balance of all loans that the bank has issued to individuals and entities, calculated on a specific date. So, different institutions with different loan portfolios might provide more or fewer loans.
“We have a total of 15 per cent of our portfolio: 5 per cent for unsecured and 10 per cent for secured. As of now that 15 per cent comes to slightly more than Nu 6bn,” said Hem Kumar Acharya, BNB’s Chief of Credit.
He added that the total loan portfolio will change as they move on to the next financial year. The total loan portfolio of BNB was Nu 42bn in December last year. And as of December this year, the bank expects it to touch Nu 50bn inclusive of the Nu 2 M already disbursed as special education and other loans.
“So, the 15 per cent of 50 billion makes a huge amount, and considering that 15 per cent and the two billion, we have disbursed already we still have the leeway to sanction and release slightly close to four billion,” added the Chief of Credit.
He added that the bank will be able to provide loans to at least a thousand people before reaching the 15 per cent limit set by the RMA.
“So, I don’t see that we will touch that limit any time soon. Because some applicants have taken loans right at the beginning of November when we started the loan and those people might consider closing the loan accounts by February March April, or at least by next year. Because by that time they would have reached Australia and earned by themselves. So, they will probably close it. And as people go on closing their accounts, the limit that we can provide goes on increasing. So, there is room for a further number of at least a thousand people to go, as of now,” said Hem Kumar Acharya.
In the meantime, BNB has opened a dedicated branch office exclusively for special education loans in the capital whereas applicants availing themselves of the education loan from the BoB will have to visit the head office.
Devika Pradhan
Edited by Sonam Pem
