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A
Project Report On
AN ANALYSIS ON EDUCATIONAL LOAN
For
Shikshak Sahakari Bank Ltd., Nagpur
Conducted by
Mr.Akash. K .KamlakarStudent, MBA-II
For partial fulfillment of Masters of Bussiness Administration(2010-2012)
OfUniversity of pune
Under the Guidance of
Prof. Supriya LakhangaonkarFaculty Member Finance
SINHGAD INSTITUTE OF TECHNOLOGY AND SCIENCENarhe,
Pune - 411041.
JULY 2011
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ACKNOWLEDGEMENT
It gives me immense pleasure in presenting the project report on
AN ANALYSIS ON EDUCATION LOAN as a part of my summer
internship at SHIKSHAK SAHAKARI BANK LTD.
I express my gratitude to my external guide Mr. P.K.PURANIK,
C.E.O of the bank for giving me an opportunity to work with them. My
special thanks to him and his team for guiding me through this project on
various intrinsic of Loan.
The credit of successful completion of this project also goes to the
invaluable cooperation, encouragement and support provided by each and
every member of the loan department. I would like to thanks all the loan
department personnel for making this summer internship a learned and
memorable one.
As a student of SINHGAD INSTITUTE OF TECHNOLOGY AND
SCIENCE, PUNE, I would first of all like to express my gratitude to my
Director PRACHI PARGAONKAR as well as my internal guide Prof.
SUPRIYA LAKHANGAONKAR for her unconditional guidance,
cooperation and moral support throughout my summer project.
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EXECUTIVE SUMMARY
Education is the most important investment one makes in life. Higher
studies and specialization in certain fields call for additional financial support from time
to time.
Students future education plans are supported with the availability of the
educational loans that secures ones life. There are years when students strived hard with
the learning activities without any external support with financial issues. Educational
loans were much in demand that hardly few lucky students could avail them, but now the
condition has turned upside down. Today students can apply for loans from various
sources which are obtained easily without much strain. There are several funds being kept
aside for students welfare education and development based on their family income
background and backups.
The Educational Loan Scheme outlined below aims at providing financial
support from the banking system to deserving/ meritorious students for pursuing higher
education in India and abroad. The main emphasis is that every meritorious student
though poor is provided with an opportunity to pursue education with the financial
support from the banking system with affordable terms and conditions. No deserving
student is denied an opportunity to pursue higher education for want of financial support.
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Table of Contents
1. Introduction. 8-10
2. Introduction To Student Education Loan. 11-13
3. Organisational Profile. 14-18
4. RBI Guidelines for Education Loan. 19-32
5. New RBI Guidelines. 33-35
6. SSB Education Loan Scheme. 36-50
7. Research Methodology. 51-56
8. Data Analysis. 57-61
9. Findings. 62-63
10. Suggestions & Recommendations. 65-66
11. Conclusions. 66
12. Annexure I,II,III 67-75
13. Bibliography. 77
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INTRODUCTION
Education never ends it is not said without reason. We are educated all our lives and
getting an education not only is a great achievement but something that gives you the
tools to find your own way in the world. Education is indispensable; little do we realize
how much more it can bring to us in terms of worldly amplifications. Anyone can have
propensity and the natural endowment for education. But one might not have the
resources to finance their education. You certainly cant let lack of resources impede you
from advancing your prospects through education. Then you accidentally stumble upon
the word education loans. Loans for education you have never thought about it as a
feasible arrangement. Education loans can open newer panoramas in regard to your
education aspirations. Education loans are open to all people. Education loans can realize
your education plans or the education plans of your children. You can strengthen you
own future and the future of your son or daughter with education loans. An extensive
range of student and parent loans are presented under the category of education loans.
There are many types of education loans. Discerning about the types of education loans
will help you in making the accurate decision. The single largest resource of education
loans is federal loan. The two main federal education loan programs are the Federal
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Family Education Loan Program and the Federal Direct Loan Program. In the Federal
Family Education Loan Program the bank, credit union or the school is the lender. While
the federal direct loans program, the department of education is the lender. Private
education loans are offered to people so that they can provide financial backup to their
education plans. Private education loans are not endorsed by other government agencies
but are provided by other financial institutions. Private education loans program are
optimum for both undergraduate and graduate studies. Formal education is requisite for
future success. Though this is not a hard and fast rule, but education certainly helps you
in gaining an upper hand. With universities getting expensive day by day, an education
loan will certainly give you an incentive to go ahead with your education plans. Each
year while contemplating on your education plans the thought of finances almost
invariably comes in. While working towards your degree, you are constantly plagued
about paying for the education fees, books, and other living expenses. Education loans
can provide funding for tuition fees, board and room, books, computer and even student
travel. An education loan can help you with all these expenses. Education loans are
sufficient enough to take care of all these expenses. If you have been forced to drop your
education for any reason, you can still take up your education at any point of time.
Irrespective of your age and also where you have left your education. There are no
specific eligibility criteria for education loans. Any person who is in need of sponsorship
for education can find an education loan that fits his or her financial necessity. Loan
amount on education loans vary with the kind of education you want to pursue. The
repayment options with education loans will similarly accommodate your personal
financial preferences. You can either repay interest amount while still in school or six
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months after graduation. Education loans offer up to ten years for repayments. The refund
alternatives on education loans also include deferment, forbearance and consolidation.
The various sites on education loans can give you innumerable repayment options and
monetary remuneration. Education loans will help you in planning your life after
graduation. However, an education loan like every loan is a huge financial obligation. An
education loans is generally the first substantial loan for most people and therefore the
first major expense. Do not be completely dependent on your education loans for the
funding of your complete education. Try to apply for any other financial sustenance like
university grants, scholarships, fellowships, work study programs and any other form of
aid. This will certainly encourage a fluid dispensation of your education loans. You can
start by going to the financial aid office in your school or university. It will provide you
further insight to the kind of education loans, you must apply for. Education is an
experience of life. It is so rewarding in itself that it helps you to manage almost
everything in your life. Education loans discipline your impulse towards education and
training into a fruitful contrivance. The payoff is delicious in terms of improved quality
of life. Education is expensive! Is it? With education loans it cant be. Now, you dont
have to take the road in front of you. Make your own road with education loans.
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STUDENT EDUCATION LOAN ANALYSIS
Student loans come in many different flavors, with loans tailored for students with
exceptional need, and loans for the needs of average students. There are even loans
specifically designed for medical students.
It is easy to know how a student would feel overwhelmed with so many education
financing options. But like anything else in life, there's a solution to the madness. And
with only a little understanding of the positives and negatives of each loan type, students
and their parents can see more clearly the options which are best suited for an individual
student's needs.
Of all student education loan options, usually the one with the most attractive terms could
be the Perkins Loan.
Perkins Loans have an incredibly low, fixed interest rate of 5 percent. These loans also
provide a prolonged "grace period" - the time allowed after leaving school before
payment is required. Perkins Loans offer a 9-month grace period.
Your Perkins Loan may also arrange Loan Cancellation, which could pay back a portion,
or all, of the student loan. Federal Loan Cancellation is offered to graduates who accept
to work in high-need areas, like agreeing to teach in the designated low-income school.
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The problem with Perkins Loans is that they're unavailable for all of us - these loans are
made for students with "exceptional need."
If Perkins Loans are not a choice in your case, then Stafford Loans are the next
best thing.
Stafford Loans offer benefits similar to Perkins Loans, with apr currently running
in the five to seven percent neighborhood - still affordable, as loans go nowadays. Like
Perkins Loans, Stafford loans do not require repayment until when you finally leave
school or drop below half-time student. They also have a "grace period" of six months
before payments must begin.
Stafford Loans are offered from the us government, and are also offered through the use
of a private lending institution. Depending on the college you'll attend, you may have the
option of taking either a direct federal Stafford Loan, or taking the same loan by using a
private lending institution as an intermediary. With some schools you could have both
options. Regarding private lenders, certain colleges sometimes have specific institutions
that they regard as 'preferred lenders,' but remember that you have the right to seek your
personal private lender for a Stafford Loan. If you discover that grants, scholarships, and
federal student loans don't cover your requirements, private student loans are always an
alternative. Private student loans are a good value, but they generally feature slightly
higher interest rates than their federal counterparts, and these rates are actually variable.
Because private student loans aren't federally-backed, you'll likely find that you will need
someone, for example a parent, to co-sign for you. Even if your credit allows you to
secure financing alone, having a cosigner is an extremely wise choice, since this tends to
decrease your loan's interest rate. Lowering this interest rate, even by a small piece of a
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percent, could make an important difference in lowering the total amount of money you
will have to repay on the loan. Unlike federal loans, private student loans may require
that you start making monthly premiums while still in education.
These payments could possibly be in some reduced form on this time, just like an
interest-only payment. Even when your particular loan doesn't require any kind of
repayment while in school, it's still a good idea to send what you can, when you can.
Even small irregular payments, made ahead of time, can have a huge relation to lowering
the sum of amount you'll have to repay.
Student loans, especially the federally-backed versions, are a great value for
students and their parents when other funding options aren't enough. It's true that the
many different kinds of student loans can be confusing to sort through. But more loan
options means you're much more likely get a fit that is better for your personal specific
needs. By having a basic knowledge of the several education financing possibilities, it is
going to be less difficult to get the fit that's best for you.
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ORGANISATIONAL PROFILE
Shikshak Sahakari Bank Ltd was established on 1st January 1979 by
Adv.Shankarao Padhyaji. There is a small story behind establishment of this bank. It is as
follows,Once a teacher borrowed money from a creditor for his daughters marriage and
failed to return the money on the agreed date. The creditor use to come everyday and use
to abuse the teacher.
Oneday as ususal he reached the teachers house and abused the teacher very
badly in front of his whole family and said, Master today evening I want my money
back, if you cant give me the money then send your younger daughter in my house
tonight.
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The teacher felt ashamed and guilty after this incident. He went to the village well
and committed suicide by hanging inside the well. This incident took place on 2nd
Octomber 1975. The main aim of Shikshak Sahakari Bank Ltd is to give respect to the
teachers and was established on 1st Jan 1979.
The name Shikshak was given in the loving memory of Dr.Sarvapalli
Radhakrishan.
Shikshak Sahakari Bank Ltd is operating with 17 branches in Nagpur City, with
3804 members and 622 working members. All our branches and administrative offices
throughout the city sponsors and participates in large number of welfare activities and
social causes. Our business is more than banking because we touch the lives of people
anywhere in many ways.
The Corporate Accounts Group is a Strategic Business Unit of the Bank set up
exclusively to fulfill the specialized banking needs of top corporates in the city. The Bank
is actively involved since 1979 in non-profit activity called Community Services
Banking.
The bank is entering into many new businesses with strategic tie ups Pension Funds,
General Insurance, Custodial Services, Private Equity, Mobile Banking, Point of Sale
Merchant Acquisition, Advisory Services, structured products etc each one of these
initiatives having a huge potential for growth. Total number of customers as on 2009-10 is
90,590.
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MISSION & VISION
OUR MISSION:
"To provide superior, proactive banking services to niche markets globally, while
providing cost-effective, responsive services to others in our role as a development bank,
and in so doing, meet the requirements of our stakeholders".
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OUR VISION:
"To become the bank of choice for corporate, medium businesses and up market retail
Customers and to provide cost effective developmental banking for small business, mass
Market and rural markets.
OBJECTIVE OF THE STUDY
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Release of large amounts of Funds for Educational Loans.
Educational loan scheme are designed to provide better Educational opportunities
to all types of education.
The main objective of providing loan is for pursuing studies in Recognized
school/colleges/institutes to meet:
Tuition and other fees.
Maintenance cost, books, equipments,etc.
Cost of passage (for studies abroad).
Caution fund/building.
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RBI GUIDELINES FOR EDUCATION LOAN
Revised model educational loan scheme for pursuing higher studies in India and abroad.
1. INTRODUCTION:
Education is central to the Human Resources Development and empowerment in
any country. National and State level policies are framed to ensure that this basic need of
the population is met through appropriate public and private sector initiatives. While
government endeavour to provide primary education to all on a universal basis, higher
education is progressively moving into the domain of private sector. With a gradual
reduction in government subsidies higher education is getting more and more costly and
hence the need for institutional funding in this area.
The scope of education has widened both in India and abroad covering new
courses in diversified areas. Development of human capital is a national priority and it
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should be the endeavour to all that deserving student who denied opportunity to pursue
higher education due to financial support. Loans for education should be seen as an
investment for economic development and prosperity. Knowledge and information would
be the driving force for economic growth in the coming years.
Based on recommendations made by a Study Group, IBA had prepared a Model
Educational Loan Scheme in the year 2001 which was advised to banks for
implementation by Reserve Bank of India vide circular
No.RPCD.PLNFS.BC.NO.83/06.12.05/2000-01 dated April 28, 2001 along with certain
modifications suggested by the Government of India. In line with the announcement
made by the Hon'ble Finance Minister in his Budget Speech for the year 2004-05, IBA
had communicated certain changes in the security norms applicable to educational loans
with limits above Rs.4 lakhs and up to Rs. 7.5 lakhs.
We have been receiving enquiries from members seeking clarifications on the
various provisions of the scheme based on feedback received from the branches. With a
view to ensure that the scheme is implemented in letter and spirit, it was decided to
review the scheme and make modifications in the scheme to facilitate smooth operation
at bank branches. Towards this, a Working Group of General Managers drawn from
select banks was constituted at IBA. This revised model scheme has been prepared based
on the suggestions made by the Group.
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2. OBJECTIVE OF THE SCHEME :
The Educational Loan Scheme outlined below aims at providing financial support
from the banking system to deserving/ meritorious students for pursuing higher education
in India and abroad. The main emphasis is that every meritorious student though poor is
provided with an opportunity to pursue education with the financial support from the
banking system with affordable terms and conditions.
3.APPLICABILITY OF THE SCHEME:
The scheme detailed below could be adopted by all Commercial Banks. The 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.
The scheme details are as under:
4. ELIGIBILITY CRITERIA :
Student eligibility:
Should be an Indian National
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Secured admission to professional/ technical courses in India or Abroad through
Entrance Test/ Merit Based Selection process.
Courses eligible
Studies in India: (Indicative list)
Graduation courses : BA, B.Com, B.Sc., etc.
Post Graduation courses : Masters & Phd.
PROFESSIONAL COURSES :
Engineering, Medical, Agriculture, Veterinary, Law, Dental, Management,
Computer etc.
Computer certificate courses of reputed institutes accredited to Dept. of
Electronics or institutes affiliated to university.
Courses like ICWA, CA, CFA etc.
Courses conducted by IIM, IIT, IISc, XLRI. NIFT etc.
Regular Degree/Diploma courses like Aeronautical, pilot training, shipping etc.,
approved by Director General of Civil Aviation/Shipping, if the course is pursued in
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India. In case the course is pursued abroad, the Institute should be recognized by the
competent local aviation/shipping authority. Courses offered in India by reputed foreign
universities.
Evening courses of approved institutes. Other courses leading to diploma/ degree etc.
conducted by colleges/ universities approved by UGC/ Govt./ AICTE/ AIBMS/ ICMR
etc
Courses offered by National Institutes and other reputed private institutions. Banks may
have the system of appraising other institution courses depending on future prospects/
recognition by user institutions.
Courses, which are not covered under the criteria mentioned above, individual banks
may take a view to consider extending education loan under the scheme taking into
account the future prospects/recognition by user institution.
Studies abroad :-
Graduation : For job oriented professional/ technical courses offered by reputed
universities.
Post graduation: MCA, MBA, MS, etc.
Courses conducted by CIMA- London, CPA in USA etc.
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Expenses considered for loan :
Fee payable to college/ school/ hostel.
Examination/ Library/ Laboratory fee.
Purchase of books/ equipments/ instruments/ uniforms.
Caution deposit, Building fund/refundable deposit supported by Institution bills/receipts,
subject to the condition that the amount does not exceed 10% of the total tuition fees for
the entire course. Travel expenses/ passage money for studies abroad.
Purchase of computers - essential for completion of the course. Insurance premium for
student borrower. Any other expense required to complete the course - like study tours,
project work, thesis, etc.
5. QUANTUM OF FINANCE:
Need based finance subject to repaying capacity of the parents/ students with margin and
the following ceilings.
Studies in India - Maximum Rs.10.00 lacs.
Studies abroad - Maximum Rs.20 lacs
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6. MARGIN :
Upto Rs 4 lacs Nil
Above Rs. 4 lacs: Studies in India 5%
Studies Abroad 15%
- Scholarship/ assistantship to be included in margin.
- Margin may be brought-in on year-to-year basis as and when disbursements are
made on a pro-rata basis.
7. SECURITY :
Upto Rs 4 lacs Co-obligation of parents.
No security: Above Rs.4 lacs and upto Rs7.5 lakhs Co-obligation of parents together with
collateral security in the form of suitable third party guarantee. The bank may, at its
discretion, in exceptional cases, waive third party guarantee if satisfied with the net-worth
/ means of parent/s who would be executing the document as "joint borrower".
Above Rs.7.5 lakhs Co-obligation of parents together with tangible collateral security of
suitable value, along with the assignment of future income of the student for payment of
installments
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Note:-
The loan documents should be executed by the student and the parent/ guardian as joint-
borrower. The security can be in the form of land/ building/ Govt. securities/ Public
Sector Bonds/Units of UTI, NSC, and KVP, life policy, gold, shares/mutual fund
units/debentures, bank deposit in the name of student / parent / guardian or any other
third party with suitable margin.
Wherever the land/ building is already mortgaged, the unencumbered portion can be
taken as security on second charge basis provided it covers the required loan amount. In
case the loan is given for purchase of computer, the computer has to be hypothecated to
the Bank.
8. RATE OF INTEREST :
Upto Rs 4 lacs BPLR
Above Rs. 4 lacs BPLR + 1%
Simple interest to be charged during the Repayment holiday/ Moratorium period.
Penal interest to be charged as applicable to individual banks.
9. APPRAISAL / SANCTION/ DISBURSMENT :
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In the normal course, while appraising the loan the future income prospects of the
student will be looked into. However, where required, the means of parent / guardian
could also be taken into account to evaluate re-payment capability.
The loan to be sanctioned as per delegation of powers preferably by the Branch
nearest to the place of residence of parents.
No application for educational loan received should be rejected without the concurrence
of the next higher authority.
The loan to be disbursed in stages as per the requirement/ demand directly to the
Institutions/ Vendors of books/ equipments/ instruments to the extent possible.
10. REPAYMENT:
Repayment holiday/Moratorium Course period + 1 year or 6 months after getting
job, whichever is earlier.The loan to be repaid in 5-7 years after commencement of
repayment. If the student is not able to complete the course within the scheduled time,
extension of time for completion of course may be permitted for a maximum period of 2
years.
If the student is not able to complete the course for reasons beyond his control,
sanctioning authority may at his discretion consider such extensions as may be deemed
necessary to complete the course.
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The accrued interest during the repayment holiday period to be added to the
principal and repayment in Equated Monthly Instalments (EMI) fixed. 1% interest
concession may be provided for loanees if the interest is serviced during the study period
when repayment holiday is specified for interest/ repayment under the scheme.
11. INSURANCE
Banks may arrange for life insurance policy on the students availing Educational Loan.
Individual Banks may work out the modalities with insurance companies
12. FOLLOW UP/TRACKING:
Banks to contact college/ university authorities to send the progress report to the bank at
regular intervals in respect of students who have availed loans. In case of studies abroad,
bank may obtain the Unique Identification Number (UIN)/Identity Card and note the
same in the bank's records.
13. PROCESSING CHARGES
No processing/ upfront charges may be collected on educational loans for studies in
India.
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14. CAPABILITY CERTIFICATE:
Banks can also issue the capability certificate for students going abroad for higher
studies. For this purpose financial and other supporting documents may be obtained from
applicant, if required.
(Some of the foreign universities require the students to submit a certificate from their
bankers about the sponsors' solvency/ financial capability, with a view to ensure that the
sponsors of the students going abroad for higher studies are capable of meeting the
expenses till completion of studies.)
15. OTHER CONDITION:
A. MERITORIOUS STUDENTS
Banks which wish to support highly and exceptionally meritorious/ deserving
students without security may delegate such powers to a fairly higher level
authority.
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B. MULTIPLE LOANS
In case of receipt of application for more than one loan for student borrower from a
family, the 'family' as a unit has to be taken into account for considering the loan and
security taken in relation to the total quantum of finance disbursed, subject to margin and
repaying capacity of the parent/student.
C. MINIMUM AGE
There is no specific restriction with regard to the age of the student to be eligible for
education loan.
D. CHANGE OF ADDRESS
In cases of student staying with parents and where such parents have transferable jobs or
there is change in address, the bank may provide in the system of noting the address for
correspondence' for tracking purpose.
E. TOP UP LOANS
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Banks may consider top up loans to students pursuing further studies within the overall
eligibility limit, with appropriate re-schedulement, subject to taking required security.
F. CO-OBLIGATOR
The co-obligator should be parent(s)/guardian of the student borrower. In case of married
person, co-obligator can be either spouse or the parent(s)/parents-in-law .
No Due Certificate- No due certificate need not be insisted upon as a pre-condition for
considering educational loan. However, banks may obtain a declaration/ an affidavit
confirming that no loans are availed from other banks.
Disposal Application- Loan applications have to be disposed of within a period of 15
days to 1 month, but not exceeding the time norms stipulated for disposing of loan
applications under priority sector lending.
Flexibility in terms-In order to bring flexibility in terms like eligibility, margin, security
norms, and banks may consider relaxation in the norms on a case-to-case basis delegating
the powers to a fairly higher level authority.
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report that appeared in the Business Line (Hindu Group) about 80% of Education Loans
provided by the banks are for domestive requirements. And the rest made the financial
assistance lent to students wanting to study abroad.
The Government of India in consultation with the Reserve Bank of India and the Indian
Bankers Association has drawn up a elaborate and comprehensive Education Loan
Scheme. The objective of this scheme is to ensure that no deserving candidate is deprived
of education that he/she deserves at any level.
Broadly speaking the guidelines have set the following provisions. Though these may
change from time to time depending upon the Government Policy and the extent of
requirements, the basic spirit and the criteria for loan settlement have remain unchanged
largely speaking.
The provisions--
(a) Loans up to Rs 7.5 lakh for pursuing higher education within the country and Rs 15
lakh for an overseas education are available.
(b) For loans up to Rs 4 lakh no collateral or margin is required and the interest will be
charged not more than the Prime Lending Rate (PLR)
(c) For loans above, the interest rate charged will be not be more than PLR plus one per
cent.
(d) The loans are to be repaid over a period of 5 to 7 years with the provision of a grace
period of one year after completion of studies.
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The repayment of an education loan is deductible under Section 80E of the Income Tax
Act. The yearly limit for deduction Rs Rs 40,000/- (for both the principal and the
interest). Only loans taken for higher education full time studies in any graduate or
post-graduate, professional, and pure and applied science courses may claim deduction.
The deduction will be available for a maximum of eight years starting from the day you
start repaying.
Allahabad Bank, Oriental Bank of Commerce, State Bank of India, Punjab National
Bank, Dena Bank, Bank of Baroda, Bank of Maharashtra, Canara Bank, Central Bank of
India, Corporation Bank, Indian Bank, Indian Overseas Bank, State Bank of Hyderabad,
State Bank of Travancore, Syndicate Bank, Union Bank of India, ICICI, HDFC, etc are
some of the leading banks.
Besides these banks there are numerous private lenders who are more active in the remote
regions of India.
While some of them are genuine, it is advisable to seek loans from recognized banks. As
there are cases where students who are mid-way through their studies had to discontinue
as the pending installments of loan never came through.
Meanwhile there is a thinking in the Government that has the Planning Commission
seriously considering a proposal wherein students, even graduates, can write-off their
educational loans by serving for a while in a government agency.
This move, for which the details are yet to be finalized, has been made to check brain
drain from the country. The Planning Commission may set up a National Student Loan
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Guarantee Corporation which will provide a guarantee to students of certified institutions
who avail of a bank loan. The move will enable banks to lend without collaterals.
According to the Reserve Bank of India (RBI) data, there was a 51 per cent rise in
education loans from Rs 9,962 crore at the end of March 2006 to over Rs 15,000 crore at
the end of March 2007.
Officials say that a mechanism for loan waiver from a private or a foreign bank, and
points regarding tax treatment are yet to be framed.
SHIKSHAK SAHAKARI BANK (SSB)
Education Loan Scheme:
SSB SUVIDHA EDUCATION LOAN SCHEME
A term loan granted to Indian Nationals for pursuing higher education in India or
abroad where admission has been secured.
1. Eligible courses
All courses having employment prospects are eligible.
Graduation courses/ Post graduation courses/ Professional courses
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Other courses approved by UGC/Government/AICTE etc.
2. Expenses considered for loans
Fees payable to college/school/hostel
Examination/Library/Laboratory fees
Purchase of Books/Equipment/Instruments/Uniforms
Caution Deposit/Building Fund/Refundable Deposit
Travel Expenses/Passage money for studies abroad
Purchase of computers considered necessary for completion of course
Any other expenses required to complete the course like study tours, project work etc.
3. Amount of loan
For studies in India, maximum Rs. 10 lacs
Studies abroad, maximum Rs. 20 lacs
4. Interest Rate
For loans upto Rs. 4 lakh 12.00% p.a.
Above Rs.4 lacs and upto Rs.7.50 lacs13. 50% p.a
Above Rs.7.50 lacs 12.50% p.a
5. Processing Fees
No processing fee/ upfront charges
Deposit of Rs. 5000/- for education loan for studies abroad which will be
adjusted in the margin money.
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6. Repayment Tenure
Repayment will commence one year after completion of course or 6 months after
securing a job, whichever is earlier.
Place of Study Loan Amount
Repayment Period
in Years
In IndiaUp to Rs. 7.5 lacs 5-7
Above Rs. 7.5 lacs 5-10
AbroadUp to Rs. 15 lacs 5-7
Above Rs. 15 lacs 5-10
Security
AmountStudies In
IndiaStudies Abroad
Upto Rs. 4 lacs No Security No Security
Above Rs. 4 lacs to Rs.
7.50 lacs
Third Party
GuaranteeThird Party Guarantee
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Above Rs. 7.50 lacs to
Rs. 10 lacs(India)/ Rs. 15
lacs(Abroad)
Tangible Collateral
security for full
value of loan
Tangible Collateral security
of suitable value of loan or
third party guarantee
Rs 15 lacs to Rs. 20 lacs ___ Tangible Collateral security
for full value of loan
7. Margin
For loans up to Rs.4.0 lacs : No Margin
For loans above Rs.4.0 lacs:
o Studies in India: 5%
o Studies Abroad: 15%
8. Post Sanction Follow up:
Branches to contact college / university authorities to send the progress
report at regular intervals in respect of students who have availed loans.
9. Upfront Fee:
Nil
10. Time norms:
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Loan applications have to be disposed of within a period of 15 days to one month
but not exceeding the time norm stipulated for disposing of loan applications under
Priority Sector Lending.
11. Capability certificate:
Since, some of the foreign universities require the students to submit a
certificate from their bankers about the sponsors solvency / financial
capability, with a view to ensure that the sponsors of the students going
abroad for higher studies are capable of meeting the expenses till completion
of studies, capability certificate may be issued in such cases. For this
financial and other supporting documents may be obtained from the
applicant.
12. Mode of application of interest:
Interest on Education Loan accounts shall be worked out at the end of each
month and recorded on a separate sheet in the ledger but not debited to the
borrowers account. Instead, it should be debited to a separate account
opened in the Subsidiary General ledger titled Interest Accrued on
Advances under Education Loan Scheme forming one of the components of
the main head of General Ledger. Interest Accrued on Advances and
credited to Revenue Head Income Interest on term loan till the
commencement of repayment of first installment. On the date fixed for
commencement of repayment, the whole amount of interest so far worked
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out and recorded as above should be debited to the borrowers account by
corresponding credit to the Interest Accrued on Advances under Education
Loan Scheme. Repayment of loan and interest may be determined keeping
in view the above procedure for charging of interest.
13. Confidential Reports:
On Borrower(s): No confidential report on the borrower will be required as
the application for loan will indicate the information required to be furnished
in the confidential report.
14. Documentation:
i) Agreement (Annexure -1) duly stamped, to be taken in case where the
student is minor. Further, in case of Minor student, on attaining his/her
majority confirmation from student be obtained as per Annexure III.
ii) Agreement (Annexure II) duly stamped, to be taken in case where the
student is Major.
iii) Letter of Guarantee duly stamped as an Agreement to be
taken in case of loan amount is above Rs. 4 lacs.
iv) In case of collateral security is to be taken is mortgage, procedure given
in Book of Instruction on Loans to be followed.
The documents should be executed by the student and parent / guardian.
15. Disbursement:
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Education loan is to be disbursed in the form of term loan. A limit upto which
advance is to be allowed during each year will be set up. Each time the borrowing
scholar is in need of funds to pursue his studies; he will approach the lending office
and will explain his needs to the Incumbents Incharge and will permit drawing on the
borrowers account within the limit fixed. This will also enable the Incumbent In
charge to remain in close touch with the borrowing students activities.
The loan to be disbursed in stages as per the requirement / demand directly
to the Institutions / Vendors of Books / equipments / instruments to the
extent possible.
LOAN TO BE SANCTIONED BY THE BRANCH NEAREST TO THE PLACE
OF DOMICILE OF THE STUDENT.
In case of , purchase of stationary and books, loan may be disbursed in cash on
declaration by the applicant and production of bills.
16. Classification:
Advances allowed under the Scheme will be classified under Priority Sector.
17. Checklist:
To facilitate expeditious disposal of applications, a check-list regarding documents,
security etc. along with application forms for Education Loans be provided to
intending borrowers. An illustrative check-list enabling a ready reference, so that
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intending borrowers can furnish all related documents / papers in one lot, is given
below :-
Loan application on Banks format.
Passport size photograph.
Proof of Address.
Proof of having secured pass marks in last qualifying examination.
Letter of admission in professional, technical or vocational courses.
Prospectus of the course wherein charges like Admission Fee, Examination Fee, Hostel
Charges etc. are mentioned.
Details of Assets & Liabilities of parents.
In case loan amount is above Rs. 4.00 lacs :
Particulars of Guarantors and details of their Assets & Liabilities.
If immovable property offered as Collateral Security copy of Title
Deed, Valuation Certificate and Non-encumbrance Certificate from
approved Lawyer of the Bank.
Photocopy of Passport & Visa, in case of study abroad.
Any other document / information, depending upon the case and purpose
of the loan.
18. Post Sanction Supervision:
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The Bank will reserve the right of giving loan under this Scheme to any scholar or
continue / discontinue the yearly disbursement to a borrower under the Scheme,
depending upon whether or not he / she shows good results at the institution he
/she has joined for studies and whether of not reports about his / her conduct are
satisfactory.
Such reports will be required to be produced to the Incumbents Incharge of the
lending office before the start of each academic year subsequent to the first year.
Loan pass book be issued to the borrower containing details such as date
of sanction of loan, amount of loan, amount of loan sanctioned, subsidy received
(if any) rate of interest, amount due under each instalment, due date of instalment
etc.
19. Other condition:
Zonal Managers and above may consider relaxation with regard to
Eligibility, Margin and Security norms on merits of each case.
No Due Certificate need not be insisted upon as a pre-condition for considering
educational loan. However, Branches may obtain a declaration / an affidavit confirming
that no loans are availed from banks.
20. Documents Required
i. Mark sheet of last qualifying examination for school and graduate studies in India.
ii. Copies of letter conferring scholarship, freeship, studentship etc.
iii. Documents evidencing the duration of course and commencement thereof viz.
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prospectus or certificate from the competent authority of the institution.
iv. Proof of admission to the course.
v. Schedule of expenses for the course.
vi. Two copies of passport size photograph of the borrower(s) / guarantor(s).
vii. Statement of Bank account for the last six months of the borrower(s)
viii. Signature identification from bankers of borrower(s) guarantor(s).
ix. A copy of Passport/Voters ID Card/Proof of residence.
For salaried persons:
i. Latest salary slips showing all deductions.
ii. Employment details for the last 5 years.
iii. Latest TDS Certificate Form 16.
iv. Statement of assets and outstanding liabilities.
For Self-Employed/Professionals and Businessmen
Proof of income.
Income Tax/Wealth Tax (if applicable) assessment orders not more than 2
years old.
Assets and Liabilities.
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If Collateral Security is Mortgage of Landed Property
Original Sale Deed
Original receipt of payment made for registrar
Society share certificate
Non encumbrance or certificate from advocate
Valuation Report
Note:
The document should be executed by both the student and the parent /
guardian.
The security can be in the form of land / building / Govt. Securities / Public
Sector Bonds / Units of UTI, NSC, KVP, LIC Policy, Gold, Shares /
Debentures, Bank Deposit in the name of the student parent / guardian or any
other third party with suitable Margin.
Wherever the land / building is already mortgaged, the unencumbered portion
can be taken as security an II charge basis provided it covers the required Loan
amount. In case the loan is given for purchase of Computer, the same to be
Hypothecated to the Bank.
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Managing Student Loan
A student loan is an investment in your future. It provides you an opportunity to
obtain an education that might otherwise be beyond your financial reach. With a
loan comes responsibilities that exist while you are enrolled in school, as well as
during your repayment period. Borrowing money through the Federal Family,
Education Loan Program to finance your education will have long-term
implications for your financial future. The Michigan Guaranty Agency (MGA) has
compiled this folder to help explain what you need to know about borrowing and
repaying your student loans.
Things to Consider Before You Borrow
Qualifying for a student loan may be a fairly easy process, but repaying it is more
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difficult. Before borrowing, consider the following items:
A LOAN MUST BE REPAID. It is not a grant. Signing the promissory note is a
legal and bindingpromise to repay a loan. Read your note for terms and conditions
of the loan. Repayments is expected even if you do not complete your education,
fails to complete your program of study within the regulartime for program
completion, are dissatisfied with your education, do not graduate, or do not find a
jobafter you complete your program.
Failure to repay your educational loans in a timely manner and can affectyour
credit rating and your future ability to borrow for other purposes such as a car or a
house.
Know when repayment begins. Some loans go into repayment shortly after final
disbursement; other loans have a period where payments of principal and/or interest
are deferred. Your lender will provide a repayment schedule which lists repayment
terms and conditions.
Check your finances before you apply for a loan. Consider how much you
and/or your family can contribute toward your education. Apply for other financial
aid resources such as scholarships, grants, and work opportunities through your
college financial aid office.
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Consider your expected salary and other expenses when you leave school. Can
you afford monthly educational loan payments ranging from $250 to $600 over a
ten (10) year repayment period? Too large a debt may prevent the good life you
expected to experience after graduation.
THE MORE YOU BORROW, THE MORE YOU PAY EACH MONTH.
If you must borrow, borrow only what you need and what you can reasonably
expect to repay.
Current information regarding educational loan eligibility and applications can be
obtained from the financial aid office at your school. The financial aid office must
advise you of the effect of accepting the loan on eligibility or other types of student
financial assistance.
Borrower benefits may differ between lenders. Check with lenders regarding
their borrower benefits.
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Research Methodology
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Research Methodology in a way is systematic representation of research or
any other problem. It is a written game plan for conducting research. It tends to
describe the step taken by a researcher in studying the research problem along with
a logical background.
It tends to describe methodology for solution of the problem that has been
taken for the purpose of study this project focuses on the methodology for technique
used for the collection, classification & tabulation of the data. This plan throws light
on the research problem, the objective of study & limitation of the study. Therefore,
in order to solve a problem, it is necessary to design a research methodology for
problem as the same way differs from problem to problem.
It is also the process of systematic & in depth study or search of any
particular topic, subject by the collection, presentation & interpretation of relevant
details or data. It is a careful search or injury into any subject or subject matter,
which is an endeavour to discover or to find out valuable facts that would be useful
for further application or utilisation.
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The Project
The main aim of the study is to understand the Education Loans provided by Private
Sector Unit.
It is the banks which understand the need & provides best interest rate facility. The
nature of the study is that it has an applied base. The statement indicated that result
obtained from the study, inference drawn from the study can actually be applied
practically & can be of great help to know about Education loans in more comprehensive
way.
Scope of study.
The study is restricted to Nagpur itself. It aims at getting an insight in to Education loan.
It also aims at familiarized with the various PSUs loan and its interest rate and also it help
me a lot in understanding the practical aspect of the loan as a whole.
Objective of study
The main objective of the study is to understand the Education loans provided by Private
Sector Unit i.e. Shikshak Sahakari Bank Ltd. The objective was successfully achieved by
performing the detailed survey of the bank.
To give satisfaction regarding services offered by bank
To make out which bank provide services with best resources
To know the awareness among the common student about Education loan which
they want to take.
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Type of Research
Research methodology is a way to systematic solve the research problem. It is a
procedure, which is followed step by step to solve a particular research problem. There
are basically four types of researches.
EXPLORATIVE RESEARCH
DESCRIPTIVE RESEARCH
DIAGNOSTIC RESEARCH
HYPOTHESIS TESTING RESEARCH
Explorative Research
To gain familiarity with the phenomenon or to achieve an insight into it.
Descriptive Research
To poetry accurately the characteristic of the particular individual situation or a
group.
Diagnostic Research
To determine the frequency with which something occurs or with which it is
associate with something else.
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Hypothesis Testing Research
To test a hypothesis of casual relationship between variables. The present project is
Descriptive in nature. It is done to poetry accurately the characteristic of a particular
individual situation or a group.
The major purpose in descriptive research is the description of the state of the affairs as it
exists at presents. The main characteristics of this method are that the researcher has no
control over the variables; he can only report what has happened or what is happening.
Research Process
There are six steps of Designing A Research Report.
1 Specifying the Research objective
As this research project is about the comprehensive study of Education loan & role of
Banks. Providing them so first of all the various objectives of the project were specified.
2. Preference the list of needed information
The second step in designing the project work is the preparation of list of need
information. There is basic information on which the research project is to structure. In
this project the various are handed in starting of the project.
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3. Designing the data collection process
During the data collection process a questionnaire was made for the collection of the
data from the Student personally. Because in the research project both primary as well as
secondary data is required. So primary data was collected from
Primary source-
The information is collected through employees of Shikshak Sahakari Bank Ltd.
Secondary source-
Brochures of the Bank
The following type of question was asked from the consumers.
Dichotomous
A question with two possible answers says yes or no.
Multiple choices
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A question with three or more answer.
4. Selection of the sample size
Taking the sample of the study was not easy task. The objective and the limitation of the
study have to be kept in mind before deciding about the sample type.
5. Organizing and carrying out the field work.
After decided upon the sample size & preparing the questionnaire, the fieldwork
has to be carried out. In the field work the place had to be chosen where you want to do
your study. This project survey work was carried out in the Nagpur city.
6. Analyzing the collected data & reporting the finding
After the survey work was over & data had been collected the analyzing of the data
& its graphically representation was needed.
Data Analysis and
Interpretation
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Position of the bank from last 5 years
Year
(As on 2005)
Share
Capital
Rs.(Crores)
1784.1
3
Reserve
Fund
Rs.(Crores)
15216.58
Deposits
Rs.(Crores)
68622.53
Advances
Rs.(Crores)
45872.10
Based on
2005
2005-06 2154.38
(+20.75)
18799.55
(+23.54)
62663.43 (-
8.68)
40855.90 (-
10.93)
2006-07 2175.54
(+21.93)
22585.03
(+48.42)
55415.11 (-
19.24)
34000.92 (-
25.87)
2007-08 2405.10
(+34.80)
23811.03
(+56.48)
59861.84 (-
12.76)
30716.60 (-
33.03)
2008-09 2556.52
(+43.29)
25358.11
(+66.82)
52017.89 (-
24.19)
31898.64 (-
30.46)
2009-10 2740.21
(+53.58)
28292.33
(+85.93)
53971.88 (-
21.34)
33035.01 (-
27.98)
Analysis Through Chart:
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Share Capital
2154.38 2175.542405.1
2556.522740.21
0
1000
2000
3000
2005-06 2006-07 2007-08 2008-09 2009-10Years
Rs.(
Crores)
Share Capital
Interpretation: We can see that from the figure there
have been a steady increase in the value of share capitalduring the last five years. In the year 2005-06 the share
capital is by increased by 20.75%, in 2006-07 by 21.93%, in
2007-08 by 34.80%, in 2008-09 by 43.29% and in 2009-10
by 53.58%. The reason is that the members are increasing
every year.
Analysis Through Chart:
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Reserve Funds
25358.1123811.0322585.03
18799.55
28292.33
0
5000
10000
15000
20000
25000
30000
2005-06 2006-07 2007-08 2008-09 2009-10Years
Rs.(
Crores)
Reserve Fund
Interpretation: It can be seen from the figure that theReserve Fund have increased by 23.54% in 2005-06, 48.42%
in 2006-07, 56.48 in 2007-08, 66.82 in 2008-09 and by
85.93% in the year 2009-10. The increase in members is also
increasing the amount of reserve fund every year.
Analysis Through Chart:
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Deposits
52017.89
59861.8455415.11
62663.43
53971.88
0
10000
20000
30000
40000
50000
60000
2005-06 2006-07 2007-08 2008-09 2009-10Years
Rs.(
Crores)
Deposits
Interpretation: All the above data is compared with thevalue in the year 2005. Deposits according to this year was
68622.53 Crores. The deposits are increasing and decreasing
every year. The reason is the seasonal fluctuations.
Analysis Through Chart:
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Advances
31898.6430716.60
34000.92
40855.90
33035.01
0
10000
20000
30000
40000
2005-06 2006-07 2007-08 2008-09 2009-10Years
Rs.(
Crores)
Advances
Interpretation: Seasonal fluctuations also have animpact to the Loans and Advances of the bank. As compared
to the 2005 value it is also decreasing.
Findings
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Suggestions & Recommendations
61
Sl.
No.
1 Max. loan for
studies in
India
Rs. 10.00 Lacs
2 Max. loan for
studies in
Abroad
Rs. 20.00 Lacs
3 Interest Rates Upto Rs. 4 lakh 12% p.a.
Above Rs. 4 lakh 13.50% p.a.
4 Repayment
Period starts
from
one year after completion of course or 6 months aftersecuring a job, whichever is earlier.
5 Repayment
Period
In India : Up to Rs. 7.5 lacs - 5-7 years
Above Rs. 7.5 lacs -5-10 years
In Abroad : Up to Rs. 15 lacs 5-7 years
Above Rs. 15 lacs 5-10 years
6 Margin Upto Rs. 4.00 lacs : Nil
Above Rs. 4.00 lacs : Studies in India 5%
Studies in Abroad 15%
7 Processing
Fees
No processing fee/upfront charges
Deposit of Rs. 5000/-for education loan for studiesabroad which will be adjusted in the margin money
8 Security Upto Rs. 4.00 lacs : No Security
Above Rs. 4.00 lacs to Rs. 7.50 lacs : Third PartyGuarantee
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Bank should go for advertisement Campaign from Scratch.
Bank should try to cash its brand image.
Strong branch network should be made and staff personnels incentives
should be increased.
Bank should increase its product line in education loans.
Special scheme for non-professional students as well as for professional
students should be increased.
Banks should introduce some new model keeping in mind the loan suitable
for medium income group customer.
Presence of some famous personality in Advertisement or in Pamphlets
insuring better retention in the mind of customers.
In this age of information, the customer before taking loans collects all the
information about various brands. The banks should provide a combined
booklet of the product range in order to upgrade the knowledge of future
takings of loans.
Limitations of the Study
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There are some limitations in this research; these limitations are as follows
Time limitation
Many banks provide education loan but in this research only one bank is
taken for consideration.
Expenditure on research
Restricted to Nagpur region only
Some banks are not provided with their internal information/circular.
Conclusion
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On the basis of above finding it is clearly observed that private banks have
more reach, variety and flexibility in their education loan schemes.
Maximum loan for studies in India is ranging from Rs. 7.50 lacs to 10.00 lacs and for
studies in Abroad it is Rs. 15-20 lacs. Interest rates vary from 9.5% to 11.5% p.a.
All banks have same repayment facility i.e. one year after completion of course or 6
months after securing a job, whichever is earlier.
Repayment period is also vary from 5-7 year after commencement of repayment in the
case of education loan is taken from private bank and it is 4-7 years on the basis of
unsecured and secured education loan taken from private banks.
Margin is same as compared to any other scheduled bank in Nagpur.
Upto Rs. 4.00 lacs : Nil
Above Rs. 4.00 lacs : Studies in India 5%
Studies in Abroad 15%
Processing fees is also charged according to the requirement.
APPENDIX
ANNEXURE I
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FOR SSB: (To be taken in case where the student is Minor)
ANNEXURE I
AGREEMENT FOR EDUCATION LOAN
This Agreement is made at_____________on this_______day of _____20 __ between
Shri / Smt ____________________________, son / wife of Shri _________ ______
___ r/o ________ ________ ______ (hereinafter referred to as parent / guardian) Sh.
/ Kumari _____________________ minor aged ________ years (date of birth
_________), S/o / D/o Sh./ Smt. ____________________ r/o
______________________________ (hereinafter referred to as student), represented
by his / her natural / court guardian Sh./ Smt. ____________________ (both parent /
guardian and student are collectively called the borrowers which expression shall
unless repugnant to context include his / her , executors, administrators and
assigns) of the One Part and Shikshak Sahakari Bank having
its head office at Gandhi Sagar , Nagpur- 440018 and amongst other a branch
Office at _______ _______ ______ ______ (hereinafter called the bank which term
shall unless repugnant to context include its successors and assigns) of the Other Part.
WHEREAS
A) Sh. / Smt ___________________ (parent / guardian) represents that
his/ her ward Sh. / Kumari _________________(hereinafter called the
Student) is desirous of pursuing / continuing his / her studies at
______________________ For a period of __________ but is unable
to do so due to paucity of funds.
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AND
B) The Borrowers have, with a view to receiving the financial assistance
for studies of his/her ward, applied to the bank for a loan of Rs.
____________(rupees_____________________) which the bank has
agreed to grant on terms and conditions herein after appearing:
NOW THIS AGREEMENT WITNESSETH AS UNDER
1. The total amount of the loan amounting to Rs. __________ will be disbursed
by the bank to the borrowers as under :-
State the manner of disbursement
2. The amount of loan will be utilized by the borrowers only for the purpose of
persecuting studies of the student , such as payment of fees payable to
college / school/ hostel, examination / library laboratory fee , purchase of
books / equipment / instruments / uniform caution deposit / building fund
/refundable deposit / supported by the institution bills / receipts, travel
expenses / passage money for studies abroad, purchase of computers essential
for completion of the course any other expenses required to
complete the course- like study tour project work, thesis etc.
3. At the end of each academic year, borrowers will produce a certificate from
the head of the institution at which the student is studying testifying the
results achieved by the student during and at the end of the year as well as
about his conduct. If the said certificate is not produced or the certificate
furnished for any year is not considered satisfactory the Bank will (in its
absolute discretion) have the right of stop giving any further financial
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assistance to the borrower in terms of this agreement notwithstanding the
fact that the total amount of the loan as agreed to in paragraph above has not
been disbursed to him. The Bank will be entitled as its option to recall the
loan already , give together with the interested accrued thereon, by a demand
in writing.
Applicable in case loan is above Rs. 4.00 lac
4. The borrowers will secure the loan by providing a suitable surety an unless
he has furnished the same he will not avail the loan or any part thereof.
5. The interest on the loan will be payable at the PTLR rate /_____% over the
PTLR with ________rest. Provided that the interest payable by the
borrowers shall be subject to change in interest rates made by RBI / Bank
from time to time.
(PTLR means Prime Term Lending Rate of the bank prescribe by the
bank from time to time. The PTLR as on date is ______% p.a.)
In the event of there not being any PTLR, the borrower agrees to pay interest
at the rate as prescribed by the bank.
6. Subject to what is provided in paragraph 3 above, the borrowers will repay the
loan together with interest accrued thereon by equal monthly installments in
_______ year after commencement of the repayment i.e. one year after the
course period or 6 months after getting job, whichever is earlier. The
extension of the repayment period, if the student is not able to complete the
course for reasons beyond his/her control, will be in the absolute discretion
of the Bank.
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7. In the event of death of any of the borrowers, the bank shall be entitled not
only not to disburse further loan but also recall the outstanding under the
loan already disbursed, irrespective of the installments fixed.
8. The borrowers will, during the period of their indebtedness to the bank, keep
the Bank informed of the change in their address, vocation and income from
time to time.
9. The student-borrower under takes to remit and if need be, give instructions /
authorization to his / her employer to remit, the salary to the extent necessary
or even more , if the borrower so desires , to the account of the borrower.
In witness whereof the parties to these presents have set their hands on the day,
month and year first mentioned above.
__________________________
BORROWERS
FOR SHIKSHAK SAHAKARI BANK LTD
(Authorized signatory)
(To be taken in case where the student is Major)
ANNEXURE II
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AGREEMENT FOR EDUCATION LOAN
This Agreement is made at_____________on this_______day of _____20 __ between
Shri / Smt. / Km. ____________________________, son / daughter of Shri _________
______ ___ r/o ________ ________ ______ (hereinafter referred to as student) and
Sh. / Smt. _____________________ son / daughter of____________________ r/o
______________________________ (hereinafter referred to as parent), (parent and
student collectively hereinafter called the borrowers which expression shall unless
repugnant to context include their heirs, executors, administrators and assigns) of the
One Part and Shikshak Sahakari Bank a body corporate having its head office
at Gandhi Sagar , Nagpur- 440018 and amongst other a branch office at _______
_______ ______ ______ (hereinafter called the bank which term shall unless
repugnant to context include its successors and assigns) of the Other Part.
WHEREAS
A) The Student and Parent (Borrowers) represents that Sh. / Kumari
_________________(student) is desirous of pursuing / continuing
his / her studies at ______________________ for a period of
__________ but is unable to do so due to paucity of funds.
B) The Borrowers have, with a view to receiving the financial
assistance for his/her studied, applied to the bank for a loan of Rs.
____________(rupees_____________________) which the bank has agreed to
grant on terms and conditions herein after appearing:
NOW THIS AGREEMENT WITNESSETH AS UNDER
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1. The total amount of the loan amounting to Rs. __________ will be disbursed by
the bank to the borrowers as under :-
State the manner of disbursement
2. The amount of loan will be utilized by the borrowers only for the purpose of
persecuting studies of the student , such as payment of fees payable to
college / school/ hostel, examination / library laboratory fee , purchase of books
/ equipment / instruments / uniform caution deposit / building fund /refundable
deposit / supported by the institution bills / receipts, travel expenses / passage
money for studies abroad, purchase of computers-essential for completion of
the course any other expenses required to complete the course- like study tour
project work, thesis etc.
3. At the end of each academic year, borrowers will produce a certificate from the
head of the institution at which the student is studying testifying the results
achieved by the student during and at the end of the year as well as about his
conduct. If the said certificate is not produced or the certificate furnished for
any year is not considered satisfactory the Bank will (in its absolute discretion)
have the right of stop giving any further financial assistance to the borrower in
terms of this agreement notwithstanding the fact that the total amount of the
loan as agreed to in paragraph above has not been disbursed to him. The Bank
will be entitled as its option to recall the loan already , give together with the
interested accrued thereon, by a demand in writing.
Applicable in case loan is above Rs. 4.00 lac
4. The borrowers will secure the loan by providing a suitable surety an unless he
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has furnished the same he will not avail the loan or any part thereof.
5. The interest on the loan will be payable at the PTLR rate /_____% over the
PTLR with ________rest. Provided that the interest payable by the borrowers
Shall be subject to change in interest rates made by RBI / Bank from time to
time.(PTLR means Prime Term Lending Rate of the bank prescribe by the
Bank from time to time. The PTLR as on date is ______% p.a.)
In the event of there not being any PTLR, the borrower agrees to pay interest
at the rate as prescribed by the bank.
6. Subject to what is provided in para 3 above, the borrowers will repay the loan
together with interest accrued thereon by equal monthly installments in
_______ year after commencement of the repayment i.e. one year after the
course period or 6 months after getting job, whichever is earlier. The extension
of the repayment period, if the student is not able to complete the course for
reasons beyond his/her control, will be in the absolute discretion of the Bank.
7. In the event of death of any of the borrowers, the bank shall be entitled not only
not to disburse further loan but also recall the outstanding under the loan
already disbursed, irrespective of the installments fixed.
8. The borrowers will, during the period of their indebtedness to the bank, keep
the Bank informed of the change in their address, vocation and income from
time to time. In witness whereof the parties to these presents have set their hands on the
day,month and year first mentioned above.
For self and as natural guardian/ guardian of
Sh./ Kumari__________________________
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BORROWERS
FOR SHIKSHAK SAHAKARI BANK LTD
(Authorized signatory)
ANNEXURE-III
Date:_____________________
The Manager,
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Shikshak Sahakari Bank Ltd,
BO:___________________
Reg : My Education Loan For Rs._______
I write to confirm that you were pleased to grant Education Loan of Rs.____________
to me, represented by my guardian, Shri / Smt. _________________ for my
education. My said guardian executed the required loaning documents in your favors
in consideration of the said loan. I inform you that I have attained majority on
____________ and request you to disburse the remaining amount loan of Rs.
__________ to me out of the loan agreed to be granted by you. I am already and willing
to execute any further documents in your favor for the said loan, if so required by you. I
also confirm that the amount of loan of Rs. ___________ already disbursed to my benefit
and the same is binding on me and I agree to repay the same with interest as agreed. I
further undertake that I will repay the loan amount granted by the bank for my education,
in terms of the agreement dated _______________ as executed by Shri / Smt.
______________________, my parents / guardian representing me , interalia from out of
my future income and if need be , I will give instructions / authorization to my employer
to remit the salary to the extent necessary or even more. I will keep the bank informed of
my address and my profession / employment from time to time.
Yours Faithfully
(Borrower)
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