Indian banks turn cautious about loans for Canada-bound students
Banks in India are exercising caution and a careful approach when evaluating loan applications from students intending to study in Canada, following a diplomatic dispute between the two countries, according to senior officials as reported by Moneycontrol.
The officials have expressed the sensitive nature of these matters in the wake of the India-Canada row and have refrained from taking any official actions at this time. A state-owned bank official mentioned, “We are taking high caution amid the India-Canada row as these are sensitive matters. So, we have not taken any step officially on this.”
Canada’s Prime Minister, Justin Trudeau, had accused India of playing a role in the murder of a Khalistani terrorist, an allegation that India vehemently denied. Consequently, India suspended visa services for Canadians. The situation has raised concerns that Canada may respond with its own measures.
In response to such diplomatic tensions, another senior official from a public sector bank explained, “In such situations, we generally slow the process. So we may slow the loan process of students.” This cautious approach reflects the uncertainties surrounding the India-Canada relationship and its potential impact on students’ financial support for studying in Canada.
The branch manager of a Punjab-based public sector bank has emphasized the extreme caution exercised by their bank when considering loan applications for students planning to go to Canada. This caution is particularly pertinent as a significant number of students and immigrants from Punjab opt for Canada as their destination.
The branch manager also noted that they are awaiting specific directives or circulars from their bank’s top management regarding the handling of such loan applications. In the absence of official guidance, the bank has taken precautionary measures independently. Additionally, they highlighted that parents themselves are being cautious when sending their children to Canada due to the ongoing tension between India and Canada.
On the other hand, a senior official from a private bank mentioned that they do not receive a large number of such loan applications for students heading to Canada. They also acknowledged that the situation is evolving, and banks need to closely monitor developments and exercise caution when dealing with these cases. This cautious approach across both public and private banks reflects the uncertainty surrounding the India-Canada tension and its potential implications for financial transactions related to education in Canada.
Amid the escalating tension between India and Canada, particularly in connection with the murder of Sikh separatist leader Hardeep Singh Nijjar, New Delhi issued an advisory on September 20 for Indian nationals and students residing in Canada, as well as those planning to travel there.
The advisory, issued by India’s external affairs ministry, expressed concerns about the increasing incidents of anti-India activities, politically condoned hate crimes, and criminal violence in Canada. In response to these concerns, the ministry urged all Indian nationals in Canada and those considering travel to the country to exercise the utmost caution.
This advisory reflects the Indian government’s apprehensions regarding the safety and well-being of its citizens in Canada amidst the ongoing tensions and the related allegations and disputes between the two countries. It serves as a precautionary measure to ensure the protection of Indian nationals and students in Canada.
The advisory issued by the Indian external affairs ministry also highlighted that Indian diplomats and segments of the Indian community who oppose anti-India activities have been subject to threats in Canada. Due to these security concerns, Indian nationals are advised to exercise caution when it comes to travel, especially in regions and at potential venues where such incidents have occurred.
In a separate development related to education loans, data from the Reserve Bank of India indicates that the outstanding portfolio of education loans provided by Indian banks increased by 17 percent in FY23, reaching Rs 96,847 crore compared to Rs 82,723 crore in the previous fiscal year.
The State Bank of India (SBI) holds a prominent position as the largest education loan provider in the country, with a market share of over 33 percent as of March 31. According to SBI’s annual report, their education loan portfolio amounted to Rs 32,133 crore in FY23, and they sanctioned loans totaling Rs 15,086 crore to students in the previous year. This information underscores SBI’s significant role in providing financial support to students pursuing higher education in India and abroad.
