Central Scheme to provide Interest Subsidy for the period of moratorium on Educational Loans taken by students from economically

weaker sections from scheduled banks under the Model Education Loan Scheme of IBA. Education is a pivot for human resources development and essential for development of society. With a view to maximize assistance to students and to broad base it, we have liberalized our Education Loan Scheme from time to time in view of importance given by Government of ndia and !eserve "an# of ndia to education. $nder %odel Education Loan Scheme of "&, we are ma#ing available financial assistance to needy and deserving students who desire to prosecute higher education without any delay on easy terms and conditions. "ranches may refer '(.)ir.*o.+,-.-,+,.").!"/.+, dated +-.0.-,+,. %inistry of 'uman !esource /evelopment, /ept. of 'igher Education, Govt. of ndia have announced a scheme to provide nterest Subsidy for the period of moratorium on Education Loans ta#en by the students from economically wea#er sections from scheduled ban#s under Educational Loan Scheme. 1he Scheme is effective from the academic year -,,2.+, and that loans disbursed in -,,2.+, would be covered under the Scheme. 1he Scheme is an on.going Scheme. We are pleased to inform you that our "oard of /irectors in their meeting held on 3+.,4.-,+, have accorded permission to implement the Scheme. 1he scheme will be applicable only for studies in recognized 1echnical56rofessional courses in ndia and to those students belonging to economically wea#er sections with an annual gross parental 5family income upto !s.0.7, lacs per year 8from all sources9. 1he Educational Loans for recognized 1echnical56rofessional courses sanctioned upto !s.+,.,, lacs only will be eligible under the scheme. 1he scheme is applicable for the loans disbursed on or after ,+.,0.-,,2 and will be limited to studies in recognized 1echnical56rofessional courses in ndia after class : in Educational nstitutions established by &cts of 6arliament, other institutions recognized by the concerned Statutory "odies, ndian nstitute of %anagement 8 %s9 and other nstitutions set up by the )entral5State Government. We give here. below the detailed features of the scheme; . I!"#$%&C"I$!'

(ne of the ma<or concerns of the Government is to ensure that nobody is denied professional
education, because he or she is poor. 1he ndian "an#s= &ssociation 8 "&9 has formulated a comprehensive %odel Education Loan Scheme for adoption by all "an#s, aimed at providing financial support from the "an#ing system to deserving5meritorious students for pursuing higher education in ndia and abroad. 1he Government of ndia has now approved a scheme to provide full interest subsidy during the period of moratorium i.e. course period plus one year or six months after getting the <ob, whichever is earlier, on loans ta#en by students belonging to economically wea#er sections from the Scheduled )ommercial "an#s under the Educational Loan Scheme of the ndian "an#s= &ssociation for pursuing any of the approved courses of studies in technical and professional streams from recognized institutions in ndia.

(. $B)EC"I*E $+ ",E SC,EME; 1he nomenclature of the scheme would be >)entral Scheme to provide nterest Subsidy 8)S S9 or the period of moratorium on Educational Loans ta#en by students from Economically Wea#er Sections from Scheduled "an#s under the Educational Loan Scheme of the ndian "an#s= &ssociation to pursue 1echnical56rofessional Education studies in ndia?. -. A..LICABILI"/ $+ ",E SC,EME; 1he scheme is adopted by our "an# and would be applicable only for studies in recognized 1echnical56rofessional )ourses in ndia. 1he interest subsidy shall be lin#ed with the existing educational loan scheme of "& and restricted to students enrolled in recognized 1echnical56rofessional )ourses 8after )lass : 9 in ndia in Educational nstitutions established by &cts of 6arliament, other institutions recognized by the concerned Statutory "odies, ndian nstitutes of %anagement 8 %s9 and other institutions set up by the )entral 5State Government. 0. I!"E#ES" #A"ES' 1he interest rates charged on the educational loan shall be as per the "6L!5"ase !ate of the individual "an#s and as per the provisions for interest rates under the "& %odel Educational Loan Scheme. 1. M$#A"$#I&M .E#I$%' $nder the )entral Scheme, the interest payable by the student belonging to EWS for availing of educational loan for 1echnical56rofessional courses in ndia for the period of moratorium i.e., course period plus one year or six months after getting <ob, whichever is earlier, as prescribed under Educational Loan Scheme of the "&, will be borne by the Govt of ndia. &fter the period of moratorium is over, the interest on the outstanding loan amount shall be paid by the student, in accordance with the provisions of the existing educational loan scheme of ban#s and as may be amended from time to time, whichever is earlier. 2. +I3A"I$! $+ EMI $! ",E L$A!' 1he interest portion of the loan will be reimbursed to the "an# upon periodical submission of claims at half.yearly5 yearly till the end of moratorium period. /uring moratorium period, interest debited to the account will be #ept separately and reimbursement from G( under the scheme will be sought. With regard to repayment of principle amount and charges, if any, debited to the loan account besides interest accrued after moratorium period, E% will be suitably fixed for the period of the loan not exceeding 4 years. !ate of interest will be charged ta#ing into account the applicable interest concession of +@, provided to loanees who service the interest during moratorium period as detailed under Sl.*o.+A below. 4. I!C$ME LIMI"5.#$$+; 1he benefits of the scheme would be applicable to those students belonging to economically wea#er sections, with an annual gross parental5family income upper limit of !s.0.7, lacs per year 8from all sources9. ncome proof shall be reBuired from the students from such public authorities which are authorized, by the State Governments, for certification of income status for this scheme, including )entral and State Sector Schemes. 1he scheme is intended to cater
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to the needs of the students belonging to economically wea#er sections with prescribed upper parental gross income limit of the family from all sources, which is based on the economic index and not on social bac#ground. 1he scheme is independent of any other schemes, which cater to EWS. 6. C$M.E"E!" A&",$#I"/; %inistry of '!/, G( have already issued instructions to the State Governments to designate the appropriate authority or authorities, who are competent to issue income certificates based on economic index and not on social bac#ground, for the purpose of the scheme. 7. ELI8IBILI"/' 1he interest subsidy under the scheme is available to the eligible students only once, either for the first undergraduate degree course or the post graduate degrees5diplomas in ndia. nterest subsidy, however, will be admissible for integrated courses 8graduate Cpost graduate9 also. nterest subsidy under the scheme will not be available for those students once they discontinue the course midstream or who are expelled from the institutions on disciplinary or academic grounds. 'owever, the interest subsidy will be available only if the discontinuation was due to medical grounds for which necessary documentation to the satisfaction of the 'ead of Educational nstitution will have to be given. 9. A:A#%S5CE#"I+ICA"ES' 1here will be tag5mar#er on the degree of the student indicating his repayment liabilities. 1he Electronic 1ags will enable the employers to identify loanees.%inistry of '!/ has initiated a process of setting up of a depository for maintaining the records in dematerialized form and providing services to the users i.e. ban#s and employers. 1his measure is aimed at eliminating the fraudulent practices li#e forging of certificates and mar#s sheets. . SIMILA# SC,EMES' 1he *ational %inorities /evelopment and Dinance )orporation 8*%/D)9 have an Educational loan scheme for individual beneficiaries which is implemented through State )hannelising &gencies 8S)&s9. 1he *ational Safai Earmacharis Dinance and /evelopment )orporation 8*SED/)9, 1he *ational "ac#ward )lasses Dinance and /evelopment )orporation 8*")D/)9, *ational Scheduled )aste Dinance /evelopment )orporation 8*S)D/)9 and *ational 'andicapped Dinance and /evelopment )orporation 8*'D/)9, under the %inistry of Social Fustice and Empowerment also provide Educational Loan to the students of the target group for higher education. nterest on Education Loan provided under the educational loan schemes of these four corporations, if the loans are for pursuing professional courses after : class, shall also be subsidized for the period of moratorium as per the terms and conditions of this scheme. 1he interest charged by *%/D), *SED/), *S)D/) and *'D/) will be paid by the Government directly to the respective corporations. (.!$%AL BA!;' )anara "an# has been nominated as the *odal "an# by the %inistry of 'uman !esource /evelopment, for implementation of the scheme.

-.A..LICABLE ACA%EMIC /EA#' 1he scheme shall be applicable from the academic year -,,2.+, starting + st &pril -,,2. 1he scheme shall be applicable only in respect of disbursements made by the "an#s on or after + st &pril, -,,2 for the academic year -,,2.+,, irrespective of date of sanctioning. 'owever, the interest on disbursement made from ,+.,0.-,,2 is eligible for interest subsidy. Dor example, in case of loans sanctioned prior to +.0.-,,2, for the courses beginning prior to academic year -,,2.+,, the interest subsidy is available to the extent of disbursements made after +.0.-,,2. 0. ELI8IBLE "EC,!ICAL5.#$+ESSI$!AL C$&#SES' %inistry of 'uman !esource /evelopment in consultation with the concerned %inistries5/epartments and ndian "an#s= &ssociation will bring out the list of 1echnical56rofessional courses, for which the scheme shall be applicable and publicize from time to time. &s regards list of accredited $niversities5 nstitutions and recognized professional courses, $G) and & )1E will display the names of such institutions and courses in their websites. &s regards the issue of the list of recognized5approved )ourses5 nstitutions to "an#s, it is clarified by %inistry of 'uman !esource /evelopment 8%o'!/9, Govt. of ndia that a fresh list is not necessary since the ban#s are already sanctioning Educational Loans through the "& Educational Loan Scheme. "an#s may follow the list maintained by them under the "& loan scheme and in case of doubt, the &ssociation of ndian $niversities or %o'!/ be approached. 1. M$!I"$#I!8' %inistry of '!/ will evolve monitoring mechanism to monitor the benefits accruing to different categories of the loanees, such as Scheduled )astes, Scheduled 1ribes, %inorities, and /isabled etc. 2. I!"E#ES" C$!CESSI$!' $nder our Education Loan Scheme, @ interest concession is provided for the borrowers, if the interest is serviced during moratorium for the entire loan tenure. 1his +@ interest concession would be extended under the )entral Scheme of nterest Subsidy, provided Government disburses interest subsidy claims to the "an#s on half.yearly or yearly basis. )larification from "&5%inistry of '!/ regarding the procedure to be followed for refund of interest, where the entire interest is paid during moratorium as per the education loan scheme is awaited. 4. %ISB&#SEME!" $+ I!"E#ES" S&BSI%/ CLAIMS' 1he disbursement of interest subsidy claims will be on half.yearly or yearly basis, as decided by the %inistry of '!/, Govt. of ndia. GHGHGHGHG