Thiruvananthapuram: Banks in Kerala have reported a huge increase in the number and amount of education loans sanctioned in the year ended on June 30, 2008.

According to the figures released at the two-day State Level Bankers Committee meeting that ended here on Tuesday, 12,958 education loans to the tune of Rs.4.95 billion ($110 million) were sanctioned during the period under review, up from 4,132 loans worth Rs.983.4 million for the year ended on June 30, 2007.

The banks disbursed 20,085 loans to tune of Rs.2.64 billion last year, compared to 5,383 loans worth Rs.573 million in the previous year.

The report added that 75 percent of the total applications for education loans came from Kottayam, Thiruvananthapuram and Ernakulam districts, and were for pursuing nursing courses in Karnataka and Andhra Pradesh.

The education loans are categorised into two slabs. Loans up to Rs.400,000 do not require any collateral security and carry an interest rate of 13 percent for studies within the country and 13.5 percent for studies abroad.

Loans above Rs.400,000 require collateral security and carry an interest rate of 13.5 percent for studies within the country and 14 percent for studies abroad.

Once the loan is approved, the banks directly send the fees to the institution as required by them.

The repayment of the principal amount starts after one year of completion of the course or six months after getting a job, whichever is earlier.

Kerala-based State Bank of Travancore (SBT), which has disbursed 3,673 loans valued at Rs.800 million, leads from the front. In the year ended on June 2007, the bank had disbursed 1,636 loans worth Rs.148.8 million. IANS