Recently, when the Tashi Bank stopped giving its education loans there was a lot of speculation that the Royal Monetary Authority (RMA) had stopped the loan to discourage people from going to Australia.
However, a RMA official clarified that there was no such order from the RMA to T-Bank.
The official said that that there are exposure limits for every type of loan and T-Bank had stopped the loan by itself as it was about to breach that limit.
The T-Bank is expected to offer this loan product again after a few months once this exposure limit stabilizes.
The sudden stoppage of the loan by T-Bank has also lead to some speculation on the legality of the loan.
However, here the RMA official said that the loan is is not illegal in nature otherwise the RMA would have stopped it long ago.
He said that it is up to the bank and the client on the duration of the loan and its details as long as proper process is followed.
In the meantime, many people are now rushing to Druk Punjab National Bank as this bank is also offering the same education loan product as T-Bank.
A Druk PNB official said that the same type of education loan that T-Bank was offering is also available at an annual interest rate of 10.5%.
The official said that the loan amount that people take can vary depending on their needs and requirements with couples taking more than those going alone.
The RMA has been the main beneficiary of the remittance from Australia and has in fact been working with banks to make it easier and cheaper to send remittances to Bhutan from Australia.
It recently offered a 2 percent additional amount for those sending money through the formal banking channel.
RMA is also working with the Bhutanese Embassy in Australia to rope in Australian banks to make it even cheaper and easier to send remittance to Bhutan.