Question : Education Loans

(a) the details of the instructions/guidelines issued by the Government/Reserve Bank of India to the banks including State Bank of India (SBI) for granting education loans for pursuing higher education;

(b) whether SBI and a few other nationalised banks are not granting education loan for post-graduation diploma courses conducted by colleges and approved by AICTE, if so, the reasons therefor;

(c) whether as a result thereof the students particularly those belonging to SC/ST and poor class families are being exploited by the private banks by charging higher interest rates;

(d) if so, the details thereof along with the corrective steps taken by the Government in this regard; and

(e) the details of the education loans sanctioned and disbursed by the SBI for pursuing degree and diploma courses inside and outside the country during each of the last three years and the current year, State-wise?

THE FINANCE MINISTER


(a) The Reserve Bank of India 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;
I. Loan upto Rs 10 lakh for study in India and upto Rs 20 lakh for study abroad.

II. Collateral free loans upto Rs 7.5 Lakh under the Credit Guarantee Fund Scheme for Education Loans (CGFSEL).
III. No Margin for loan up to Rs 7.50 Lakh.
IV. Repayment period of 15 years
V. One year moratorium for repayment after completion of studies in all cases,
VI. Moratorium taking into account spells of unemployment/under-employment, say two or three times during the life cycle of the loan
VII. Moratorium for the incubation period if the student wants to take up a start-up venture after graduation.
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.
(b) to (d): 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, the All India Council for Technical Education, the Indian Council of Medical Research, etc. are eligible for education loan.

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.

(e) As per the information furnished by SBI, the state-wise-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.
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