A Comprehensive Model Education Loan Scheme has been formulated on the basis of recommendations made by a Study Group constituted by Indian Banks’ Association is given below.

This Model Scheme detailed below could be adopted by all Commercial Banks. This scheme provides broad guidelines to the banks for operationalising the educational loan scheme and the implementing bank will have the discretion to make changes suiting to the convenience of the students/parents to make it more customer friendly.

                                                       

 

(a) Student eligibility:

1. Should be an Indian National.

2. Secured admission to professional/technical courses in India or Abroad through Entrance test/Merit

    based selection process.

(b)Courses eligible:

Study in India

1. Graduation Courses-B.A, B.Com, B.Sc. etc

2 Post Graduation Courses-Masters and P.hd.

3 Professional Courses –Engineering, Medical, Agriculture, Veterinary, Law, Dental, Management, Computers etc.

4 Computer Certificate courses of reputed institutes accredited to Dept of Electronics or institutes affiliated to University.

5 Courses like ICWA,CA, CFA etc.

6 Courses conducted by IIM, IIT, IISC, XLRI,NIFT etc.

7 Courses offered by foreign universities in India.

8 Evening courses of approved institutes.

9 Other courses leading to Diploma/Degree etc. conducted by UGC/AICTE/AIBMS/ICMR etc.

10 Courses which are not covered under the criteria mentioned above, individual banks may take a view

 to consider extending.

 

Studies Abroad:

1 Graduation –For job oriented professional/technical courses offered by reputed universities.

2 Post Graduation-MCA,MBA, MS etc.

3 Courses offered by CIMA-London, CPA in USA etc.

Expenses which include loan-

·         Fee payable to college/school/hostel.

·         Examination/library/laboratory fee.

·         Purchase of books/instruments/uniforms.

·         Security Deposit/Building fund refundable supported by institutes receipt but not exceeding 10% of the total tuition fee.

·         Travelling expense/passage money only for studies abroad.

·         Insurance premium for student.

·         All other expenses related to completion of course-like study tour, projects etc.

Need based subject to repaying capacity of parents/students with margin and the following ceilings:

a. Studies in India- Max. 10 lacs.

b. Studies abroad-Max. 20 lacs.

·         Upto 4 lac :Nil

·         Above 4 lac in India: 5%

·         Studies abroad :15%

Note- (i)Scholarship /assistantship to be included in margin.

           (ii) Margin to be brought in on year and year basis as when disbursements are made.

Upto 4 lac --   Co-obligation of parents.

Above 4 lac upto 7.5 lac--   Co-obligation of parents with collateral security in the form of suitable third party guarantee.

Above 7.5 lac—Co-obligation of parents with the tangible security of suitable value.

§ The loan documents should be executed by both the student and parent(s)/guardian as joint borrower.

§ The security can be immovable property/Govt. Securities/Units of UTI/NSC/Bank deposit etc.

Rate of Interest.

Upto 4 lac ---BPLR

Above 4 lac—BPLR+1%

Sanction /Disbursement

In the normal course while appraising the loan,the future income prospects of the student will be look into.However,where required the means of parents could also be taken to evaluate repayment capability.

 

Course period +1 year or 6 months after getting the job whichever is earlier.

Processing Charges:

No processing charges may be collected on educational loans for studies in India.

 

Source-IBA guidelines on Educational loan scheme.