[ad_1]
As per Reserve Bank of India’s (RBI) guidelines on education loans, there is no provision to allow loans to parents for tuition of their children and, therefore, it is illegal for financial institutions to get into corporate tie-ups with edtech platforms like BYJU’s to enable such loans, Priyank Kanoongo, head of National Commission for Protection of Child Rights (NCPCR), said.
“We have examined the guidelines issued by RBI for education loan purpose, but there is no mention that financial institution can give loans for the purpose of tuition. What is the function of an edtech platform? Is providing personal loans part of their business? They are fooling the people of India. We will not tolerate exploitation of children in the name of tuition. It is crystal clear that they are violating the rules,” Kanoongo told Business Today.
The commission is in the process of approaching RBI to understand in what capacity banks and financial institutions provide personal loans to poor category and low-income parents for the purpose of tuition. NCPCR would also recommend the banking regulator to issue proper directions to edtech companies and its banking partners and ensure proper implementation of the guidelines.
“My concern is about children only and their right. When the parents are unable to pay the loans, their credit scores suffer. And when the child really needs an education loan for his or her higher education, how can the parent become a guarantor? Secondly, if parents take a loan to pay the tuition fees of a child and child at some point wishes to discontinue online tuition, would parents allow them to discontinue? That will create unnecessary mental pressure on the child. Also, why are they (edtech firms) not charging their products/courses on a yearly basis, and not monthly basis?” Kanoongo asked.
“If the purpose is tuition and it is not mentioned in the RBI guidelines of education loan, then it illegal, it is something fishy,” he said.
Edtech platforms partner with banks, NBFCs and fintech players to offer loans for parents to afford their online courses and tuitions. After media reports of BYJU’S allegedly buying phone numbers of children and their parents and threatening them to buy its courses, the commission had summoned the company on December 23 to seek an explanation. BYJU’S, represented by one of its founding partners Pravin Prakash, denied allegations of mis-selling or sales malpractices.
Kanoongo told BT that the company has agreed to conduct affordability tests parents before selling their products or offering loans to them.
“They have submitted on the day of summon that they will not sell their courses through loan to parents of low-income parents whose income is below Rs 25,000. The company also told us they will revise their refund policy. They have submitted a draft. We are still in the process of examining the document submitted by the company, we will soon send a proper direction to BYJU’s,” he said.
BT has reached out to BYJU’S for a comment on the commission’s stands on the matter and will update the report as soon as we hear from the company.
Also read: Fixed Deposit (FD) schemes for senior citizens: 4 private banks offering best interest rates across tenors; check details here
Also read: Fixed deposit special schemes: 4 FD schemes with special interest rates that will end in 2023
[ad_2]
Source link
