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Fee reimbursement: Engineering College Managements Agree To Bank Loan Formula

Posted On: 14/02/2011      Updated On:
Engg College Managements Agree To Bank Loan Formula

Hyderabad: Tension between college managements and state government on the fee reimbursement issue eased a bit on Sunday with a majority of the colleges agreeing to take loans to fund the education of students. College managements have communicated to the government that they would take bank loans (on the government's counter guarantee) and pay the interest for the same. They, however, demanded that the government release the entire dues by mid-April.

According to the new proposal put forward by the engineering college managements, the government would pay 50 per cent of the fund arrears within the coming week and the rest would be taken as loan from banks on government's counter guarantee. The government would pay the banks directly.

Engineering college management representatives on Sunday said that they were ready to take bank loans if the government agrees to pay back the money within a period of three months. "We do not want to put pressure on the government. We are willing to take bank loans and pay the interest for two months if the government agrees to release the funds by April second week,'' said Ramesh Nimmatoori, chairman of the striking Consortium of Private Engineering and Professional College Managements' Association.

The government had asked the managements to wait for six months for the release of the entire amount under the scheme. "We cannot wait for so long as several colleges which had taken bank loans on 24 per cent interest have been issued eviction notices from banks,'' Nimmatoori said.

A meeting would be held on February 16 to convince the government to release funds by April.

Meanwhile, the managements would also ask the affiliating universities to give them concession on the yearly development fee that is levied from them. "Each year we pay Rs 2,000 per student to the universities under various categories, including infrastructure development. But this year we are planning to ask the universities to allow us to pay just Rs 1,250 per student. This would cover the interest which the managements will have to pay the banks,'' said a management representative.

The colleges are also sceptical if the government would release 50 per cent of the funds immediately. "Officials had stated that they would pay 20 per cent of the funds immediately and the rest in instalments. We want 50 per cent of the funds now. Only then can the bank loan plan work,'' said Nimmatoori.

The managements will, however, not call off the strike till the government agrees to pay the nodal banks including SBI, SBH and Andhra Bank within two months.
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