Over 1,200 applicants have applied in the two banks
Bank of Bhutan Limited (BOBL) and Bhutan National Bank Limited (BNBL) have received over 1,200 applications since the opening of the special education loan from November 16.
Special education loans cover visa fees, tuition fees, and living expenses for overseas study in Australia, Canada, the United Kingdom, and the United States.
Both the banks have received more than 600 applications.
Most loans qualify under secured loans. However, the data for Druk PNB Bank Ltd could not be ascertained.
A BoBL official said the number of applicants has come down from around 200 initially to 30 a day. The bank has processed loans for 200 applicants till 23rd November.
Similarly, Hem Kumar Acharya, director of banking operations at BNBL, said the bank receives 60 applications daily.
He said the bank has temporarily stopped receiving applicants on November 24 and 25 to clear the backlog and will open it from November 28. The bank has disbursed approximately 600 million (M) special education loans.
“Given the bank’s total loan portfolio of Nu 42 billion (B), we can disburse up to Nu 6.3B, equivalent to approximately 2,000 customers, for special education loans.” Hem Kumar Acharya said.
The central bank has set a lending limit for special education loans at 10 per cent of the total loan portfolio for secured loans and 5 per cent for unsecured loans.
Hem Kumar Acharya said, “If the debt saturation point is reached, the next cycle can be started after three to six months.”
The bank offers special education loans under secured and unsecured category.
Secured loans are applicable to applicants above 18 years of age and can avail amounts up to Nu 5M. The unsecured loan is for the age group of 18 to 35 years and can get loans up to Nu 3.5M.
Unsecured loans are for those who do not have sufficient income or collateral from household members amounting to Nu 3.5M.
Applicant must submit a document of net annual taxable income of household members not exceeding NU 1M; Family members should not have business draft facility or limit of more than 1M or non-performing loans, and must submit land ownership papers of all members. Family members include the applicant, his/her spouse and both their parents.
However, if the annual taxable income of the applicant’s family members is more than 1M, then he/she is eligible under the secured loan with collateral.
BoBL charges 8.5 per cent interest per annum for secured loans and 9.5 per cent for unsecured loans. BNBL has fixed an interest rate of 10 per cent for unsecured loans and 9 per cent for secured loans. Druk PNB Bank Limited offers 10.5 percent interest for unsecured and 9.5 percent for secured loans.