Not More than Rs 50,000 as Caution Money for MBBS: FRA Warns Private Medical Colleges over Exploitative Fees

Mumbai: Bringing a cap on the "deposit" charged by the private medical colleges offering health science courses, the Fee Regulatory Authority (FRA) of Maharashtra has ordered that medical colleges cannot charge more than Rs 50,000 as caution money and for the B.Sc Nursing courses this cap is of Rs 10,000.

The colleges charge the deposit under different heads such as laboratory, library and hostel. However, in a recent order, Maharashtra FRA stated, "The amount collected from the students as refundable caution money shall be kept in seperate bank account and be periodically invested with nationalised bank. The interest accrued on such deposits to be shown in the accounts of the institute offered for fee fixation as a sepearate head of income."

Therefore aiming to curb the exploitation of the students, the FRA has issued a stern warning to the private medical colleges across the State to put a stop to the practice of charging hefty amounts in the form of caution money, library deposits, and other fees that the Fee Panel does not approve.

Also Read: Private medical colleges in Maha get FRA showcause notice for charging Rs 1 to 2 lakh as caution money

As per the latest media report by Mid Day, during a meeting on August 28, the FRA highlighted several instances of colleges charging exorbitant amounts under the guide of caution money and other deposits at the time of admission. Commenting on this, the Member Secretary of FRA S Ramamoorthy told the Daily, "These practices have been deemed exploitative, with some institutions collecting sums that far exceed the fees prescribed by the regulatory body."

The Daily has reported that one such case involved a leading medical college in Maharashtra, which reportedly collected Rs 4.5 crore from the students under the head of caution money during the financial year 2022-2023. FRA noted that the college was holding on to this amount in its account and generating interest, which is a misuse of the students funds.

Therefore, after its recent meeting FRA has clarified that none of the students should be forced to pay the caution money or any other unauthorised fees as a condition for admission. Moreover, the authority further stated that the caution money should be refundable and the interest earned on these deposits should be credited back to the students. 

Indian Express has reported that FRA in its order mentioned that it is contained to invoke its power "to put ceiling over the collection of amount from the students as caution money and other deposits/charges in order to stop the exploitation of the students and further prohibit such institutes/colleges running health science courses from indulging into act of profiteering."

FRA took this action after taking note of the complaints from students and parents about the financial burden being imposed by these colleges as additional fees. The fee panel has issued instructions to all the private medical colleges to strictly adhere to the approved fee structure, further warning that any deviation will result in severe penalties.

Further, FRA has also urged the colleges to provide clear and detailed information about all fees to students and parents at the time of admission to ensure that no hidden charges are being levied upon the students.

Commenting on the issue, a senior official from the State Education Department said, "The decision is commendable and this move is expected to bring much-needed relief to students and set a precedent for other regulatory bodies to follow in safeguarding the interests of students nationwide."

FRA's Directives: 

FRA has directed the following-

> The caution money collected from the students should be deposited in a separate bank account and invested in nationalised banks. The interest earned from these deposits must be credited to the account of the college and will be reflected as a separate head of income.

> FRA has barred the colleges to transfer any amount of caution money to any personal account of the trust or institution.

> Refundable deposits, such as caution money, must be returned to the students after adjusting any legally recoverable amounts within 90 days of course completion.

> The medical colleges will have to strictly follow the FRA guidelines and any violation will result in potential penalties for the institute under the State Fees Regulatory Authority Act of 2015.

However, concerns have been raised regarding the effective implementation of the FRA directives. Referring to these concerns, Mohmmad Najmoddin from Markazi Taleemi Board Maharashtra, an education and advocacy organisation, told Indian Express, "Medical admissions in state have already commenced and now seat allotment will start. At this time, it will be important to see how private colleges are following the FRA order. And more importantly whether strict action will be taken against those who are in violation of these new norms."

Medical Dialogues had last year reported that FRA Maharashtra was planning to set an upper limit for caution money and other deposits charged by the private medical colleges in the State.

Further, it was decided that FRA would also draw up norms complying with the rules recommended for the medical colleges by the National Medical Commission. 

Also Read: Maharashtra FRA to soon set Upper Limit for Caution Money in Medical Colleges