Cabinet proposes revision of penal interest charged from former students under ‘Odisha Loan Stipend Fund’

Bhubaneswar, May 18: With an objective to promote higher studies among poor and meritorious students of Odisha, financial assistance in shape of loan stipend had been provided from the "Odisha Loan Stipend Fund" for pursuing higher studies in the field of general, technical and professional education. The scheme was being implemented from 1954 to 2016. Basing on the conditions as per bond agreement, penal interest at 10% / 15% per annum is charged from the loanee defaulters on the basis of non engagement/engagement respectively who failed to repay the loan stipend within the time period. The penal interest amount cannot be calculated easily without verifying their employment status. For verification and calculation of penal interest, the department has sought documents in support of the loanees' job engagement position and course passing out. Asking for documents, receipt and verification of such documents and calculation of penal interest and communication of interest amount to the loanee for deposit, thus becomes very cumbersome and time consuming procedure. Irrespective of the job-engagement position of the loanee, the cabinet has proposed to calculate penal interest at flat rate at 10% per annum. With flat rate of interest of 10% per annum, calculation of penal interest will become very easy and there will be no requirement of collecting various documents from the loanees. The Higher Education Department will calculate the penal interest amount of all defaulter loanees and publish it in the department website so that the loanees can deposit the entire loan amount (principal + interest) at one go in online mode and NDC will be issued immediately.