In consonance with the Budget announcement for the year 2004-05, Indian Banks’ Association (IBA) had issued revised guidelines dated 31.08.2004 on educational loan scheme to all member banks. The salient features of the educational loan scheme is as under :
· Loans upto Rs. 7.5 lakh for studies in India and upto Rs. 15 lakh for studies abroad. It covers courses in schools and colleges in India and abroad.
· Interest rate not to exceed BPLR for loans upto Rs. 4 lakh and BPLR +1% for loans above Rs. 4 lakh.
· Margin upto Rs. 4 lakh Nil, 5% margin for studies in India and 15% margin for studies abroad required for loans above Rs. 4 lakh.
· No security is required upto Rs. 4 lakh. Above Rs. 4 lakh and upto Rs. 7.5 lakh collateral in the form of a suitable third party guarantee and above Rs. 7.5 lakh collateral security of suitable value or suitable third party guarantee along with the assignment of future income of the student for payment of installments.
Banks have been advised to adhere to the guidelines issued by IBA. Complaints received, if any, from the Public/Students are referred to concerned banks for immediate redressal.
The target fixed under educational loan scheme by IBA during 2005-06 is 2 lakh fresh loan accounts for an amount of Rs. 3000 crore to be sanctioned.
This information was given by Shri S.S. Palanimanickam, Minister of State for Finance in reply to a question raised by Shri T.T.V. Dhinakaran in Rajya Sabha today.
BSC/BY/DN-200/05