CII asks for skill development bank

According to the model proposed by CII, the SDB would work as a financial intermediary between commercial banks and final customer-the potential trainees. SDB would also finance to private players who want to set up new institutes or upgrading existing ones. Finance by commercial banks to the SDB should be taken as part of banks8217; priority sector-lending targets, recommends CII.

In order to reduce the risk of default, the SDB would finance directly to training institutes. The institute would hand over the diploma certificates of trainees on completion of course to SDB. This would serve as a collateral for the trainee in question.

The certificate would be transferred from the bank to the company directly. There would be an arrangement where company would settle loan on behalf of the trainee in easy installments. The employer company would deduct the installments from trainee8217;s salary. CII suggests an introductory rate of interest at 7 per cent for such loans.