B-school shuts shop leaving 29 students stranded

In an earlier article of Careers360, the issue of universities setting up centres across India and the risks such an unregulated expansion were discussed.

On July 1, 2010, the Ahmedabad Mirror covered a story on how an institute in Ahmedabad confirmed these fears; the Bangalore School of Business, a chain of B-schools that offer MBA programmes in association with universities, shut shop in Ahmedabad.

According to the report: "The institute that claims to be affiliated to Periyar University is winding up its operations in the city, leaving 29 students in the lurch. To make their exit from Ahmedabad smooth, the institute has 'shifted' its students -- without their knowledge -- to another institute."

The report suggest that the second institute International Business School (IBS) claims to be affiliated to MS University in Chennai, and it cites that a student Naveed Khan said that he was denied an education loan for the course, a Post Graduate Programme in Management at BSB because the institute had not mentioned in the prospectus and the admission form which university it was affiliated to.

In the first place neither of them could be affiliated because both the universities in question (Periyar and MS) do not have jurisdiction outside Tamil Nadu. So they cannot affiliate.

The law does not permit any state university to affiliate with an institute beyond the state borders. However, the state university may set up study centres for its distance learning programmes. So, whether it is IBS or BSB or any other college/ institute, if it claims any kind of association with a university outside the state where college/ institute is located, it is only a study centre and it can shut shop anytime and the university could wash its hands off. 

For instance, in case of BSB, it is "associated" with Periyar University. According to the Periyar University website, any institute which wishes to associate with it needs to keep Rs 50,000 as non-refundable deposit among other conditions. In other words any study centre, which shuts shop will lose not more than Rs 50,000.

Careers360 advice to students: In the future, too, some of these institutes that have mushroomed all over India, could shut shop. So unless it is an Indian School of Business (Hyderabad), do not join colleges which claim to be associated with a university located in another state.