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Education loans register 17% growth in FY23

Education loans register 17% growth in FY23, turning positive for first time in five years

About the news:

  • According to Reserve Bank of India’s (RBI) data, the outstanding portfolio under education loans grew 17 per cent at ₹96,847 crore in the year 2022-23 as against ₹82,723 crore in the previous year.
  • The priority sector education loans show growth of 0.9 per cent in FY 2022-23 which is significant because the growth in education loans was flat during 2021-22 & it was negative for the three years prior to it


Financial Year Year Growth % (In negative)
FY20-21  3%
FY19-20  3.3%
FY18-19  2.5%
  • The Non-Performing Assets (NPAs) in education advances stood at 7.82 per cent of a total outstanding portfolio of ₹80,000 crore at the end of the first quarter of FY23

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In India, around 90 per cent of education loans are disbursed by the Public Sector Banks. Private sector banks and regional rural banks (RRBs) accounts for around 7 per cent and 3 per cent of total education loan outstanding, respectively

Reasons for Non-Performing Assets (NPAs) in loans:

  • Fresh job creation has not kept pace with the number of graduates coming out of the colleges
  • Limited job opportunities or a mismatch between the skills acquired during education and the job market
  • Financial crises affected overall economic conditions & job market, making it challenging for borrowers to repay their education loans

Important takeaways for all Comptitive Exams:

  • A Non Performing Asset (NPA) is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days
  • Dharmendra Pradhan is the Union Minister for Education