Social Banking

No. SB/10-21/896
August 16, 2008

Chief Executives of all Member Banks

Dear Sirs,

Education Loan

The Government of India, Ministry of Finance, Department of Financial Services has pointed out
that during the course of processing of educational loans by banks under the model educational
loan scheme, complaints are received that banks are often passing on the loan applications to
other banks/branches of banks stating that the applicant does not fall within the area of operation
of a particular branch. Some of the reasons quoted by banks are :

1. Place of domicile of the applicant falls under the service area of another bank.
2. Approach another bank functioning nearer to place of their residence
3. Applicant is over aged.
4. To approach another bank as per arrangement among local banks.

This has resulted in unnecessary inconvenience to the student borrowers, as they have to run from
branch to branch of different banks for following up their applications.

This issue also came up for discussion at the Finance Minister’s meeting with CEOs of PSBs on
13.08.2008. The Finance Minister appealed to the banks to accommodate the student community
and to consider and process the loan applications and should not reject any loan application
without any valid grounds. In view of the above we have to advise member banks to implement
the guidelines under the educational loan scheme in the right perspective and as far as possible
not to reject any genuine requests and try to accommodate the student community as far as
possible within the broad framework of the scheme. In this connection please also note there is no
restriction with regard to the age of the student to be eligible for the loan and further wherever
parents are not there banks could consider grandparent as co obligator to the loans taking into
account their net worth.

We seek the cooperation of member banks in making the educational loan student borrower
friendly.

Yours faithfully,

Ms. Prabhuta Vyas

Sr. Vice President

b.Edn. Loan Cir.Mbr.Bks.

Social Banking

No. SB/10-21/1291
September 27, 2008

Chief Executives of all Member Banks

Dear Sir,

Teacher Training Course/Nursing Course/B.Ed.

We have to advise banks that the “Working Group on Educational Loan Scheme” had
decided that education loan scheme need not be extended to pursue teacher training
course conducted by private institutions for the reason that the employability of the
students joining teachers training course is not certain under the scheme.

The matter came up again for discussion at the meeting of the Working Group held on
10th September, 2008. The Working Group reviewed its earlier decision and decided as
under :

“ Teacher Training Course/Nursing Course/B.Ed. will be eligible for education

loan provided the training institutions are approved either by the Central
Government or by State Government and such courses should lead to Degree or
Diploma Course and not to Certification course. The fees to be considered for
the purpose should be the fees structure as stipulated in Central/State Government
Colleges.”

Member Banks may kindly be guided by the above decision of the Working Group on
Education Loan Scheme.

Yours faithfully,

Ms. Prabhuta Vyas

Sr. Vice President

b. Edn. Loan Cirs.