The Minister of State (Independent Charge) for Skill Development and Entrepreneurship Shri Rajiv Pratap Rudy has said that a Skill Loan Scheme was launched by the Prime Minister on 15.7.2015 with a view to support youth who wish to go through skill training programmes in the Country. This Skill Loan Scheme replaced earlier Indian Banks Association (IBA) Model Loan Scheme for Vocational Education and Training. Bank of India has been the first bank to notify such a skill loan scheme.
In a written reply in the Lok Sabha today the Minister said any Indian National who has secured admission in a course run by Industrial Training Institutes (ITIs), Polytechnics or in a school recognized by Central or State education Boards or in a college affiliated to recognized university, training partners affiliated to National Skill Development Corporation (NSDC) Sector Skill Councils, State Skill Mission, State Skill Corporation, preferably leading to a certificate/diploma/degree issued by such organization as per National Skill Qualification Framework (NSQF) is eligible for a skilling loan. Loans may be given from 5,000/- to 150,000/- depending on the NSQF level at a simple rate of interest during the study period till commencement of repayment i.e. between 11% and 12 % by different banks and no processing fee would be charged by Banks/Money Financing Institutions. The repayment of loan will have following tenures. He said, at present there is no proposal to increase the amount of loan.
| Sl No | Amount of Loan | Tenures |
| 1 | Loans upto Rs. 50,000 | Upto 3 years |
| 2 | Loans between Rs.50,000 to Rs 1 lakh | Upto 5 years |
| 3 | Loans above 1 lakh | Upto 7 years. |