Educational Loans for Higher Studies in India and Abroad.
Student eligibility:

• The student should be an Indian National
• NRI-if student is holding Indian PassPort. (Suitable Collateral Security enforceable in India is to be provided for all such proposals.)
• For the purpose of this scheme higher education is defined as studies taken up after completion of higher secondary school i.e. Ten plus two stage
• Should have secured admission to a higher education course in recognized institutions in India or Abroad through Entrance Test/ Merit Based Selection process after completion of HSC(10 plus 2 or equivalent).
• In case where admission is not through common entrance test and the marks secured in the qualifying examination is the only criteria adopted, the minimum cut off marks should be 65% in aggregate in the qualifying academic examination.
• The cut-off of 65% marks in aggregate in the qualifying academic examination is also applicable to all courses offered by deemed universities and also to non-professional and non-technical courses, irrespective of the common entrance test.
• The revised Model Educational Loan Scheme (2011) covers only merit channel seats for the courses. Admissions through management quota are outside the purview of IBA Model Scheme on Educational Loans for Higher Studies. However we may consider sanction of loans to students securing admissions under management quota with a suitable collateral security of not less than 150% value of the sanctioned limit irrespective of quantum of loan whether it is below Rs. 4 lakhs or above Rs. 4 lakhs.

Institute Eligibility

• The eligibility for loan is determined based on employability of the course and reputation of the institution concerned.
• List of accredited institutions for all the courses is to be prepared by the Zonal Offices, and individual scores have to be allotted based on scoring methodology designated for the purpose. The rating system and modalities of accrediting Educational Institutes is as per Annexure I. Education Loans should be given to students who secure admission in such accredited Institutions only.

Courses eligible
Studies in India: (Indicative list)

• Approved courses leading to graduate/ post graduate degree and P G diplomas conducted by recognized colleges/ universities recognized by UGC/ Govt./AICTE/ AIBMS/ ICMR etc. Courses like ICWA, CA, CFA etc.
• Courses conducted by IIMs, IITs, IISc, XLRI. NIFT,NID 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 India. Air Craft Maintenance Engg, Pre-Sea Training courses must be either a degree course recognized by a competent University or Diploma course recognized by appropriate State Govt. body to be eligible for considering loan.
• Approved courses offered in India by reputed foreign universities.
• Educational Loans for Nursing Courses and other Para Medical courses offered by approved institutes are to be sanctioned at Zonal level of the Bank only .Considering demand for pursuing nursing courses, loans for students getting admission through management quota also can be sanctioned. The fee considered for finance is restricted to fee structure as approved by the State Government or regulatory body. It is to be ensured that the student has financial resources to meet the funding gap.
• Zonal Offices can also identify and recommend to H.O for approval/administrative clearance, any other course offered by institutes of repute with assured employment potential for the students and where the degrees/diplomas /certificates issued by such institutes have due recognition by Govt. Of India/State Govt./Academic Bodies duly constituted by State/Central Govt in addition to the list of premier institutes presently enlisted by us.
• The list of courses contained in the websiteswww.ugc.ac.in, www.education.nic.in, www.aicte.org.inare considered to be eligible courses.
• Off campus courses and onsite/partnership programmes are not eligible for educational loans.

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. Degree/diploma courses like aeronautical, pilot training, shipping etc provided these are recognized by competent regulatory bodies in India/abroad for the purpose of employment in India/abroad.
• Reference to other courses approved for financing are as indicated in www.webometrics.info

Diploma courses and certificate courses have not been included as eligible courses for the scheme. Post graduate studies leading to PG degrees and PG diplomas offered by reputed institutes/universities only will be covered by the scheme. Assessment of employment potential or future prospects is very important criterion considering the higher cost of studies involved.
Expenses considered for loan

• Fee payable to college/ school/ hostel*
• Examination/ Library/ Laboratory fee
• Travel expenses/ passage money for studies abroad
• Insurance premium for student borrower, if applicable
• Caution deposit, Building fund/refundable deposit supported by Institution bills/receipts. **
• Purchase of books/ equipments/ instruments/ uniforms***
• Purchase of computer at reasonable cost, if required for completion of the course***
• Any other expense required to complete the course - like study tours, project work, thesis, etc***
• In respect of Degree level courses in Non Technical and Non Professional courses the aggregate of all expenses considered for finance should not exceed Rs.1 Lakh for the total course .

Notes :-
* Lodging and boarding charges will be considered for financing not exceeding Rs. 50,000/- per year in case the student chooses / required to opt for outside accommodation.
** These expenses could be considered subject to the condition that the amount does not exceed 10% of the total tuition fees for the entire course.
*** It is likely that expenditure under Item Nos. f,g&h above may not be available in the schedule of fees and charges prescribed by the college authorities. Therefore, a realistic assessment may be made of the requirement under these heads. However, the maximum expenses included under f,g & h may be capped at 20% of the total tuition fees payable for completion of the course.
Quantum of Finance

• Need based finance to meet the expenses worked out as above will be considered taking into account margins. No specific upper limit is suggested. Loans allowed with the following ceilings for finance will be classified under Priority Sector.
  • Studies in India - Maximum upto Rs.10 lakhs.
  • Studies Abroad - Maximum upto Rs.20 lakhs.
• However for loans at degree level courses in non technical and non professional courses the maximum finance may be pegged at Rs.1 Lakh keeping in view the lower future income potential for these courses.
• For Nursing Courses the quantum of finance is restricted to fee structure as approved by the State Government or regulatory body. It is to be ensured that the student has financial resources to meet the funding gap.
• In case of studies abroad, part cost of the study can be considered for finance as requested by the student duly taking into consideration part time jobs as permitted by the institutes to part fund the course costs.

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.

Security
Up to Rs. 4 lakh
Parents to be joint borrower(s).
No security. Collateral free limit of Rs.4 lakh is student specific and not family specific. More than one loan can be considered for other siblings in the same family even when one of the siblings has already availed a collateral free loan.

Above Rs.4 lakh & upto Rs.7.5 lakh
Besides the parent(s) executing the documents as joint borrower(s), collateral security in the form of suitable third party guarantee will be taken. 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(s).

Above Rs.7.5 lakhs
Parent(s) to be joint borrower(s) Tangible collateral security of suitable value acceptable to bank along with the assignment of future income of the student for payment of installments.

Note :-

• The loan documents should be executed by both 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, KVP, life policy, gold, shares/mutual fund units/debentures, bank deposit in the name of student/ parent/ guardian / any other third party or any other tangible security acceptable to the bank 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

Rate of Interest

• Interest to be charged at rates linked to the Base rate as decided by the Bank from time to time.
  • Simple interest to be charged during the study period and up to commencement of repayment.
  • 0.50% concession in spread for Girl Students including children of the Staff members of the Bank.
• Servicing of interest during study period and the moratorium period till Commencement of repayment is optional for students. Accrued interest will be added to the principal amount borrowed while fixing EMI for repayment.

Appraisal / sanction/ disbursement

• Applications will be received either directly at bank branches or through on-line mode. Upon receipt of application, standard acknowledgement giving a reference number will be issued. The acknowledgement will contain contact details of the bank official who, could be contacted in case of delay in disposal of application.
• Sanction/rejection will be communicated within 15 days of receipt of duly completed application along with supporting documents.
• In the normal course, while appraising the loan, the future earning potential of the course to the student and the percentage of income available for repayment only will be looked into. Means of the joint borrower who is parent/guardian is not a factor for considering sanction of loans.
• Rejection of loan application, if any, shall be done with the concurrence of the controlling authority of the branch concerned and conveyed to the student stating reason for rejection.
• Lending is to be made at the place of domicile /permanent stay of the parents. In respect of branches with service area allocations the finance is to be confined to service area only to avoid multiple financing.
  In respect of metro and urban areas – the proximity approach may be adopted but in respect of proposal with deviations if any reference may be made to next higher authority for administrative clearance on merits of the case. However in respect of premier institutes identified by the Bank like IIT, IIM, ISB etc - the approach of proximity/domicile may be relaxed and loans may be allowed at the place of study of the student.
• The loan to be disbursed in stages as per the requirement/ demand directly to the Institutions/ Vendors of equipments/ instruments to the extent possible.

Repayment
Repayment Holiday/Moratorium: Course period + 1 year or 6 months after getting job, whichever is earlier.

The accrued interest during the holiday period is to be added to the principal while repayment in EMI is fixed.

Extention of moratorium period / repayment beyond the time specified in the sanction would amount to re-structuring of the loan and is governed by RBI guidelines on restructuring of advances. However in case the student takes up higher studies immediately upon completion of the course, the commencement of repayment would get shifted to 6 months from employment or one year from completion of the second course whichever is earlier without treating the change as restructuring. This would be so irrespective of whether the student had taken fresh/top up loan for higher studies or not.

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. In case the student discontinues the course midway, appropriate repayment schedule will be worked out by the bank in consultation with the student/parent.

For loans upto Rs. 7.5 lakh	upto 10 years
For loans above Rs.7.5 lakh	upto 15 years

The above repayment period is upper limit and it is to be fixed on proper justification of its need. Repayment term is to be fixed based on realistic approach taking due consideration of future earnings potential.

No prepayment penalty will be levied for prepayment of loan any time during the repayment period.

Insurance
Bank may, with the consent of the student, arrange for life insurance/liability insurance policy for the students availing Education Loan.

Follow up/monitoring
Banks to contact college/ university authorities to obtain progress report on the student at regular intervals in respect of those who have availed loans. In case of studies abroad, bank may obtain the SSN/Unique Identification Number (UIN)/Identity Card and note the same in the bank’s records. The UID number issued by UIDIA may also be captured in bank’s system as and when available.

Processing charges
No processing / upfront charges may be levied on loans sanctioned under the scheme for studies in India. For studies abroad, processing fee as applicable are to be collected initially at the time of sanction and are to be refunded upon the student taking up the course and availing the loan.

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).

Other conditions

• Sanction of loan to more than one child from the same family: Existence of an earlier education loan to the brother(s) and/or sister(s) will not affect the eligibility of another meritorious student from the same family obtaining education loan as per this scheme from the bank.
• Minimum Age: There is no specific restriction with regard to the age of the student to be eligible for education loan. However, if the student is a minor while the parent executed documents for the loan, the bank will obtain a letter of ratification from him/her upon attaining majority.
• Top up loans: Bank may consider one top up loan for studies in India. In addition one more top up loan (third loan) for studies abroad may also be considered. Top up loan for studies abroad may be considered subject however that the total number of loans do not exceed three in total for an individual at any point of time. Top up loan can be considered even after commencement of repayment under the existing loan. While allowing top up loans the collateral security norms and rate of interest as applicable for aggregate limit are to be applied prospectively for the existing loan/s also. While allowing top up loan/s the outstanding balance in the previous loan/s is to be transferred to the new loan and loan document is to be taken for the total amount of top up loan limit and outstanding balance brought forward from previous loan/s. The repayment of the loan will commence after the completion of the second/third course and further moratorium period, as provided under the scheme. In case the student takes up higher studies immediately upon completion of the course, the commencement of repayment would get shifted to 6 months from employment or one year from completion of the second course whichever is earlier without treating the change as restructuring. This would be so irrespective of whether the student had taken fresh/top up loan for higher studies or not.
• Joint Borrower: The joint borrower should normally be parent(s)/guardian of the student borrower. In case of a married person, joint borrower can be either spouse or the parent(s)/parents- in-law.

No Due Certificate and Disposal of loan application
No due certificate will not be insisted upon as a pre-condition for considering education loan. However, banks may obtain a declaration/ an affidavit confirming that no loans are availed from other banks.

Disclaimer:
     Since the rules, regulations, eligibility conditions, repayments and interests rates etc are revised by the banks from time to time in keeping pace with the changing capital market conditions, students and parents are advised to thoroughly check the terms and conditions of educational loan scheme on offer at the time of application.