The Reserve Bank of India (RBI) has advised all Scheduled Commercial Banks to adopt Education Loan Scheme, formulated by Indian Banks’ Association (IBA), vide Circular RPCD.PLNFS. BC. NO.83/06.12.05/2000-01 dated April 28,2001.
IBA has formulated and circulated to all Member Banks including State Bank of India (SBI) a ‘Model Education Loan Scheme’ for providing financial support to meritorious students for pursuing higher education in India and abroad. Salient features of the Scheme inter-alia include;
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- Loan upto Rs 10 lakh for study in India and upto Rs 20 lakh for studyabroad.
- Collateral free loans upto Rs 7.5 Lakh under the Credit Guarantee Fund Scheme for Education Loans (CGFSEL).
- No Margin for loan up to Rs 7.50Lakh.
- Repayment period of 15years
- One Year Moratorium for repayment after completion of studies in allcases,
- Moratorium taking into account spells of unemployment/under-employment, say two or three times during the life cycle of theloan
- Moratorium for the incubation period if the student wants to take up a start-up venture aftergraduation.
The IBA scheme provides broad guidelines to the banks to operationalise the Educational Loan Scheme. However, the implementing banks may vary their products as may be required. As per IBA Model Scheme, approved courses leading to Graduate/Post-Graduate Degree and P G Diploma conducted by Colleges/Universities recognized by the University Grants Commission (UGC), the All India Council for Technical Education (AICTE), the Indian Council of Medical Research (ICMR), etc. are eligible for educationloan.
SBI and other Nationalised Banks are granting education loan for Post-Graduation Diploma Courses conducted by the colleges and approved by AICTE without any discrimination.As per the information furnished by SBI, the State-Wise Education Loan sanctioned and disbursed by SBI for pursuing Degree and Diploma Courses inside and outside the country during each of the last three years and the current year are at Annexure I &II.