EDUCATION LOAN SCHEME

A) IBA MODEL SCHEME FOR STUDY IN INDIA & ABROAD

S. PARTICULARS TERMS
No.
1. Nomenclature The scheme be known as “Oriental Education Loan Scheme”.
2. Purpose The scheme aims at providing financial support to meritorious
students for pursuing higher studies in India & abroad with
affordable terms & conditions.
3. Eligibility for Student, who is
Loan 1. An Indian national.
2. Meritorious student and
Secured admission to higher education course in any institution
recognized by a statutory body in India or abroad through
entrance test/ merit based selection process after completion of
HSC (10+2 or equivalent). However, entrance test or selection
purely based on marks obtained in qualifying examination may not
be the criterion for admission to some of the post graduate
courses or research programmes. In such cases, banks will have
to adopt appropriate criteria based on employability and reputation
of the institution concerned.

Note:
a) Employability Aspect: Assessment of future employment
potential / remuneration prospect is very important criterion for
considering the cost of studies involved.

b) Assessment of loan will be based on employability and

earning potential of the student upon completion of the course
ensuring that the student shall be capable of repaying the loan
availed/future installment. The reputation of the institution shall
also be taken into consideration.

c) In case of admission under Management quota,

meritorious student who has qualified for a seat under
merit quota and chooses to pursue a course under
management quota seat for reasons of convenience
(proximity) or choice of courses shall be considered
eligible for loan under the education loan scheme.

Financing more than one member of the family

Loan to different meritorious students of same family can be
allowed on merits subject to the compliance of other terms and
conditions applicable to education loan policy. Each loan shall be
considered separately.
The education loan be given for an individual and the limit of `
4.00 Lacs be also for an individual i.e. education loan is not a loan
for family as a unit. In other words, ` 4.00 Lacs limit is not for

Education loan Scheme: Master Circular 1|Page

 family wise but individual wise. That means any number of
applicants belonging to the same family may be sanctioned loans
upto ` 4.00 Lacs individually without insisting for any security.
4. Eligible 1. Approved courses leading to Graduate/ Post Graduate degree
Courses- and Post Graduate diplomas conducted by recognized
Studies in Colleges / Universities recognized by UGC / Government / All
India Indian Council of Technical Education (AICTE) / All India Board
of Management Schools (AIBMS) / Indian Council of Medical
Research (ICMR) or Regulatory bodies.
2. Courses like I.C.W.A., C.A., C.F.A., etc.
3. Courses conducted by IIMs, IITs, IISc, XLRI, NIFT, NID etc.
4. Approved courses offered in India by reputed foreign
universities.
5. Regular Degree/Diploma courses like Aeronautical, pilot
training, shipping, degree/diploma in nursing or any other
discipline approved by Director General of Civil
Aviation/Shipping/Indian Nursing Council or any other
regulatory body as the case may be, if the course is pursued
in India.
6. All Regular courses conducted by Institutions categorized as A,
B and others. The categorization shall be reviewed from time
to time.
Note:
a) The above list is indicative in nature. The other job oriented
courses to technical/ professional degrees, post graduate
degrees/ diplomas offered by recognized institution may be
considered under this scheme.
b) Courses other than the above, offered by reputed institutions
may also be considered as per list of approved educational
institutions.
c) For reference the following web sites of Government may be
perused: www.ugc.ac.in, www.education.nic.in,
www.aicte.org.in.
5. Eligibility of 1. Diploma, Degree courses conducted by Colleges/ Universities/
Educational Educational Institutions approved by UGC (approved under
Institutions Sec-2 as an University or under Sec-3 as Deemed University)
/ Central Govt. (Parliamentary Act) or State Governments
(State Legislature)/ AICTE/AIBMS/ICMR or any other statutory
councils of India as DGCA/Nursing Council etc.

2. Educational Institution not having approval from above said

Regulators, but either categorized in list A & B institutions or
Head Office approved educational institutions list.(Annexure II)
3. On the basis of expected future business / value of account /
merits, the Cluster Monitoring Head may recommend new
private institutions not having approval from above said
regulators, for inclusion of their names in our approved list of
educational institutions by submitting the note format as per
Annexure-VII.

Education loan Scheme: Master Circular 2|Page

 Clarification
Some universities like Punjab Technical University and Manipal
University etc. are having study centers / Distance Learning
Mode all over India and the diploma/ degree is awarded by the
concerned University, which is approved by UGC/Government. It
is clarified that the Education Loan to the students pursuing
courses, conducted by such Study Centers / Distance Learning
Mode is not permissible unless specific approval for grant of
Education Loan to students of such study centers is obtained from
Head Office.
6. Eligible 1. Graduation
Courses- For job-oriented professional/technical courses/Degree offered
Studies in by reputed universities/ institutions. (Diploma/ Certification
Abroad courses are not permissible)
2. Post Graduation
Courses like MCA, MBA, MS etc. (Post Graduate Degree &
Diploma courses offered by reputed institutions/ universities
only are permissible).
3. The Courses conducted by CIMA-London, CPA in USA etc
4. Degree/ Diploma for Courses like Aeronautical, Pilot training,
and Shipping etc. provided these are recognized by
competent regulatory bodies in India/ abroad for the purpose
of employment in India and abroad.
Field functionaries can peruse website- www.webmetrics.info
(indicative only) and finance education loan to students pursuing
various courses of foreign universities/ Institutions after exercising
due diligence.

An illustrative list of top 100 foreign institutions is attached

as Annexure-III.

Note:
1. In some cases for study abroad, the Foreign Universities
stipulate a condition that the student is required to clear
General English exam / English for Vocational Education
exam, before regular course. In such cases where visa has
been obtained by the student for pursuing courses from
abroad and admission is subject to clearance of General
English / English for Vocational Education exam, Education
Loan can be considered subject to fulfillment of following
conditions :
a) The student has to clear such exam and shall meet all
expenses related to such English course from his own
sources.
b) In case of urgency, the applicant may deposit the fee for

Education loan Scheme: Master Circular 3|Page

 the first semester from his/her own sources for pursuing
the main education course.
c) After obtaining the clearance certificate of English
Language or satisfying other pre-conditions, the fee for
the first semester paid by the student from own sources
can be reimbursed or treated as a part of margin, if such
request is received within 3 months of payment of fee,
and further disbursements may be made directly to the
Institution.
2. Medical courses outside India including China and
Russia
Medical courses offered by Institutions in Nepal, approved by
Medical Council of India only are eligible for granting education
loan.
Any Indian Citizens who intend to obtain primary medical
qualification from any foreign country on or after 15 th
May’2013 are not required to obtain Eligibility Certificate from
Medical Council of India. However, the students are required
to fulfill the Eligibility Criteria for admission to MBBS course as
laid down in the Graduate Medical Education Regulation,
1997.

Students pursuing medical courses outside India including

China & Russia etc. are required to clear the screening test
after completion of the course, which is mandatory for getting
themselves registered as a medical practitioner in India or to
get employment or do Private Practice. As such, sufficient
collateral security (irrespective of loan limit) and margin shall
be obtained besides due diligence on further placement be
exercised, while granting such loans.
7. Identification As regards, the modalities to identify / recognition in India of the
of the Foreign Institution and University, the granting of student visa by
recognition in the consulates of the particular country has to be the guiding
India of principle regarding the reputation / recognition in India of any
Foreign foreign institution.
Institution /
University However the sanctioning authority may exercise due diligence on
the reputation of the University/ Institution and its subsequent
placement record of passed out students.
Further, the Central Vigilance Commission observed that there
seems to be some nexus between the agents (who arrange to
send students abroad) and the Bank involving such unethical
practices. As such, field functionaries are advised to exercise due
diligence strictly according to education loan scheme to ensure
compliance of laid down guidelines.
Field functionaries can peruse website- www.webmetrics.info
(indicative only) and finance education loan to students pursuing
various courses of foreign universities/ Institutions after exercising

Education loan Scheme: Master Circular 4|Page

 due diligence.
8. Two / Dual Education loan for Diploma and degree courses simultaneously
Courses may also be considered for two / dual courses provided by the
educational institutions.
9. Components of a) For General Students:
Finance 1. Fee payable to college/ school/ hostel (board & lodging).
Reasonable Lodging & Boarding charges will be considered in
case the student chooses/ is required to opt for outside
accommodation.
2. Examination/ Library/ Laboratory fee.
3. Insurance premium for student borrower, if applicable.
4. Caution deposit, Building fund/ refundable deposit supported
by Institution bills/ receipts, subject to the condition that the
amount does not exceed 10% of the total tuition fees for the
entire course. (An undertaking to be obtained from the
student that refund will be deposited in the deposit / loan
account with the bank).
5. Travel expenses/ passage money for studies abroad / College
Bus fare in case of study in India
6. Purchase of computers-essential for completion of the course*.
7. Purchase of books/ equipments/ instruments/ uniforms*.
8. Any other expenses required to complete the course-like study
tours, project work, thesis, etc*.
* A realistic assessment may be made for the requirement under
these heads, however the maximum amount under these heads
(6, 7 & 8) be capped at 20% of the total tuition fee payable for
completion of course.
In case of fee sponsored / reimbursed to the student by any
organization, the same may be taken into cost component.
Wherever fee/charges are revised upwardly the sanctioning
authority is permitted to consider financing to the same on
bonafide ground/ merits, within the initially agreed repayment
period.
b) For Management Quota: - Fees as approved by the
Government / regulatory bodies for payment seats will be
taken into consideration, subject to viability of repayment of
loan in future.
10. Classification The loan shall be classified as per the directives of RBI. Presently
of Advances the following loans shall be classified into priority sector.
Loan to individuals for educational purposes including vocational
courses upto Rs. 10.00 lacs irrespective of the sanctioned amount
will be considered as eligible for priority Sector.
11. Categorization  Category A Institutions – 43 Premier Institutions have been
of Institutes classified as category A institutions (attached as Annexure-I).
 Category B Institutions –73 reputed Institutions have been
classified as category B institutions (attached as Annexure-I).
 Other Institutions – Apart from Premier Institutions classified
in A & B category, Education loan of all other Colleges/
Universities/ Educational Institutions mentioned at S.No.5 shall
Education loan Scheme: Master Circular 5|Page
 be financed on normal terms of the IBA model education
loan scheme.

12. Amount of loan Category A Category B Other Institutions

No upper Ceiling. As per ` 10.00 Lacs Actual as per fee
the fee structure of the Without structure of Institution
institution. Collateral on normal terms and
For SRM Chennai: Security conditions of oriental
 MBBS and MD Course- education loan
Rs. 35.00 lacs
scheme
 BDS and MDS Course-
Rs. 25.00 lacs
 Paramedical Course-Rs.
7.50 lacs
Without Collateral
Security
Note:

1) In case higher loan limit is requested (from the above

mentioned limit) for category A & B institutions, 100%
tangible security with value equivalent to loan amount is
required.
2) Higher amounts can be sanctioned by Head Office/Field
Functionaries as per Discretionary Power Chart.
13. Top-up/Second Top-up / Second Education Loan can be permitted for pursuing
Loan higher education in view of better placement prospects. The same
shall be permitted both during the moratorium period of first
education loan and even after the expiry of moratorium period for
first loan and its repayment has been started.

The same shall be permitted within the overall eligibility limit of the
applicant subject to compliance of security stipulations and other
terms & conditions defined as per extant guidelines of education
loan policy.

While considering second education loan, the following action be

taken:
1. Balance confirmation certificate of first loan be obtained
from the party.

2. The top-up / second loan be treated as Education Loan-2

and separate loan account and documents etc. be
obtained, treating it as a fresh loan.

3. Further, both accounts be opened under the same

customer ID and two separate installments be served by
the borrower. Proper noting of such two installments be
kept at branch/Cluster record.

4. The rate of interest for second education loan shall be

determined after clubbing the outstanding of first loan
Education loan Scheme: Master Circular 6|Page
 account with proposed loan limit of second education loan
and accordingly the interest rate for loan slab (aggregate)
shall be applicable in second loan account.

Within the moratorium period of first loan:

1. The existing education loan shall be reviewed and
continued on existing terms & conditions except the
commencement of repayment period which will be
synchronized with top-up/ second loan.

2. The repayment of the first education loan shall be

rescheduled to align it to the repayment of second loan and
repayment of both the loans shall start simultaneously, i.e.
after 12 months of completion of second course.

After expiry of moratorium period of first education loan:

1. The first loan will again go into moratorium period. Simple

interest to be charged during the subsequent moratorium
period.
2. The repayment of First Loan shall be rescheduled and the
repayment of it will start after 12 months of completion of
second course.
14. Margin Category Category Other Institutions
A B
NIL NIL Up to ` 4.00 Lacs NIL
Above ` 4.00 Lacs 5% For studies in
India
15% For studies
Abroad
Note:
1) Scholarship/assistantship can be treated as margin.

2) Margin may be brought in on year to year basis as and

when disbursements are made on a pro-rata basis.

3) In any eventuality, including management quota, if the total

component of education cost is more than the requested
loan amount, then it shall be ensured that the student has
adequate resources to meet the funding gap, preferably in
such circumstances, the margin shall be brought upfront.
15. Rate of
Interest Institution Rate of Interest Scheme Code Free Code Interest
(Floating) 10 Table Code
Category A and B
Category A One Year MCLR TL647 EL15 MCLNY

One Year MCLR

Category B +0.50% TL647 EL15

Education loan Scheme: Master Circular 7|Page

 ML050
Others Institutions
One Year MCLR
+2.00% (if covered
under Credit
Guarantee Scheme)
TL641- Study in EL17 ML200
Upto Rs. One Year India EL01-
7.50 lacs MCLR+1.75% (if TL642- Study in Study in
borrower offers Abroad India EL02-
Tangible security as Study
collateral to avail Abroad
the benefit of lower
Rate of Interest) ML175
EL01-
TL641- Study in
Study in
Above Rs. India
India EL02-
7.50 lacs TL642- Study in
One Year Study
Abroad
MCLR+1.75% Abroad ML175

Note:
1) Tenor of MCLR will be -1 Year MCLR
2) The selection of the benchmark will be based upon the residual
maturity of the credit facility at the time of sanction of the credit
facility. However, the prevailing rate on the date of first
disbursement (either partial or full) of the selected benchmark
MCLR shall be applicable on the credit facility.
3) The benchmark MCLR so applied on the date of first
disbursement/review /renewal shall remain fixed up to the next
reset date of MCLR and shall not undergo any change during
the interim period despite changes in the benchmark of the
MCLR by the Bank Simple interest during study/moratorium
period and thereafter the interest shall be compounded.
4) The interest shall be levied on monthly simple basis, during the
moratorium period.
5) Interest shall be charged on monthly compounding basis after
the moratorium period (study plus grace period).
6) 1% concession in interest rate shall be provided for moratorium
period (study plus grace period), for monthly servicing of
interest regularly during moratorium period.
7) 0.50% concession on rate of interest will be applicable to
women beneficiaries, SC/ST & disabled students. However,
the 0.50% concession will be available for only one
characteristic.
8) Rate of interest will not fall below One year MCLR under any
circumstances.
9) In case, the borrower/co-borrowers insist on collateral security
in form of immovable property or any other tangible assets like
pledge of NSCs / UTI / LIC (Surrender Value) / PSU Bonds etc.
in Education Loan above Rs. 4.00 lacs and upto Rs. 7.50 lacs
to avail the benefit of lower Rate of Interest, the loan can be

Education loan Scheme: Master Circular 8|Page

 sanctioned with Rate of Interest as MCLR+1.75% but such
accounts shall not be eligible for coverage under CGFSEL and
loan account will not be opened with Free code 10 as EL17.
16. Intimation of The borrower shall be deemed to have notice of changes in the
change in rate of interest whenever there are changes in MCLR either
Interest Rate increase or decrease in the interest by display of MCLR on the
Website of the bank or published in news paper or made through
entries of the interest rate charged in the passbook, statement of
account furnished to the borrower and borrower is liable to pay
such revised rate of interest.
17. Interest The interest switch over option can be exercised by borrowers
Switch-over only once during the currency of loan on any occasion, when they
option feel that the current prevailing rate of interest of Education loan is
in their favour as compared to interest actually applied in their
account. They may exercise the interest switch over option subject
to paying onetime fee as under:
Particulars Switch over option fee(payable one time)
Education Loan 0.50% of outstanding as on the date of switch
over
Note: The staff members availing loans for self and
dependent children shall be exempted for paying above-
said switch-over fee.

The above switch-over option shall be granted subject to

compliance of following:
1. The education loan account must be regular and standard on
the date of exercise of switch-over option.
2. There should not be any inspection irregularity in the account.
3. There should not be any deficiency in documentation.
4. The balance confirmation certificate shall be obtained from the
borrower.
5. The respective sanctioning authority of the loan may permit the
switchover option.
6. The fee recovered shall be credited to “Commission Received
Miscellaneous”.
7. While considering switchover option other terms of original
sanction shall not be changed.
18. Interest During Servicing of interest during moratorium period is optional for
Moratorium students.
and study
Period Simple Interest shall be charged per month during moratorium
period (moratorium period consists of study period plus grace
period of one year). Simple interest to be charged during any
subsequent moratorium considered. When moratorium period
is over, the entire outstanding of the interest amount shall be
capitalized i.e. added back to the principal amount. Further
interest shall be charged on monthly compounding basis;
accordingly, EMI shall be fixed and intimated to the borrower in
writing.
Education loan Scheme: Master Circular 9|Page
19. Concession in If the monthly interest is serviced regularly (monthly basis)
Rate of interest during the moratorium period (study + grace period), a
concession of 1% in rate of interest is allowed for moratorium
period (study + grace period) and this concession shall be
allowed only after expiry of the moratorium period (study +
grace period). In case of default in servicing the interest, the
normal rate of interest as applicable shall be levied and no
subsequent concession will be allowed. However, normal
rate of interest on compound rate will be charged after
moratorium period and shall be applicable during the
repayment period.
There may be a situation wherein after allowing 1% refund of
interest for servicing of regular interest during moratorium period,
the actual recovered interest rate may fall below the One Year
MCLR. In such cases, it must be ensured that actual recovered
interest after allowing concession shall not fall below the One Year
MCLR of the bank.
20. Penal Interest 2% over the normal rate of interest shall be charged on loan
above ` 4.00 Lacs on overdue amount and for the overdue period.
21. Process Fee 1. For study in India: NIL irrespective of loan limit.

2. For Study Abroad:

 Upto 4.00 Lacs:

Nil
 Above 4.00 Lacs:
1% of loan amount to be recovered upfront, subject to minimum of
` 10000/- plus service tax, if any.
The process fee (excluding service tax if paid to Government)
shall be refunded by way of credit to the loan account on
availment of loan in borrower’s loan account.
Note: The borrower will be required to pay fee /charges, if any
levied by NSDL for Vidya Lakshmi Portal.
22. Primary Parents / Guardian to be joint borrower (s) / co-obligants
Security/ (irrespective of their means and age of student).
Co-obligation
OR
In case of married person, co-obligator can be either spouse or
the Parent(s) / Parent(s)-in-law. Parental co-obligation can also be
substituted by a suitable third party guarantee. The discretionary
powers shall vest with Cluster Head for acceptance of above-said
third party guarantee.

Note:
 For following institutes:

1. IIM-Ahmedabad
2. IIM-Bangalore
Education loan Scheme: Master Circular 10 | P a g e
 3. IIM-Calcutta
4. IIM-Indore
5. IIM-Kozhikode
6. IIM-Lucknow
7. Indian School of Business (ISB)-Hyderabad Campus
8. XLRI
No Parental/spouse Co-obligation

 For rest of the A category of the institutes:

Either parent/guardian may be co-obligant (irrespective of their
means and age of student). In case of married person, co-
obligator can be either spouse or the either Parent/ either Parent-
in-law. Parental co-obligation can also be substituted by a suitable
third party guarantee. The discretionary powers shall vest with
Cluster Head for acceptance of above-said third party guarantee.
23. Collateral Institutions Loan Limit Collateral
Security Security
A)For Category For Category A institutions No upper Ceiling NIL
A&B No upper Ceiling. As per the
institutions fee structure of the institution.
For SRM Chennai:
 MBBS and MD Course Rs. 35.00 lacs
 BDS and MDS Course Rs. 25.00 lacs
 Paramedical Course Rs. 7.50 lacs

For Category B institutions Upto ` 10.00 Lacs NIL

In case higher loan limit is requested (apart from the above
mentioned limit) for category A & B institutions, 100% tangible
security with value equivalent to full loan amount is required
B) For Other Institutions

a) Loan upto ` No collateral security. To be covered under Credit Guarantee

4.00 Lacs Scheme for Education Loan
b) Loan above
No collateral security or third party guarantee. To be covered
` 4.00 Lacs &
under Credit Guarantee Scheme for Education Loan and to be
upto ` 7.50
opened under free code EL17
Lacs
Note:
In case the borrower/co-borrowers insist on collateral security in
Education Loan above ` 4.00 lacs and upto ` 7.50 lacs to avail the
benefit of lower Rate of Interest, the loan can be sanctioned with
Rate of Interest as MCLR+1.75% but such accounts shall not be
eligible for coverage under CGFSEL and loan account will be
opened with Free code 10 as EL01 or EL02.
c) Loan above Mortgage of immovable property or any other tangible security like
` 7.50 Lacs pledge of NSCs/UTI/LIC (Surrender Value)/ PSU Bonds etc.
having value equivalent to 100% of loan amount.
OR
Extension of charge on unencumbered portion of land and building
already mortgaged with Bank be accepted provided the residual
Education loan Scheme: Master Circular 11 | P a g e
 value of unencumbered portion, as permissible in respective
scheme, wherein the property is originally mortgaged, should be at
least equivalent to amount of proposed education loan if the
conduct of the existing account is satisfactory and falls under
standard/regular category.
Other In all cases, assignment of future income of the student on getting
Conditions employment after completion of the course for payment of
installment. An appropriate affidavit to this effect be obtained from
all joint borrowers.
24. Education a. The loan proposals shall be entertained promptly at the
Loan- Issuance designated Nodal / Sanctioning branches/Clusters and in-
of In-Principle principle sanction be communicated to respective students on
Sanction Letter the spot.

b. Field functionaries are advised to visit:

 Nearby Colleges/ Universities/ Educational Institutions
approved by UGC / Central or State Governments/ AICTE /
AIBMS / ICMR, other regulatory bodies including all premier
institutions classified in A and B categories OR
 Educational institutions approved by our bank
OR
 Institutions mentioned in list of ‘A’ rated universities,
colleges and technical institutions is based on their rating
given by National Assessment and Accreditation Council
[NAAC] uploaded at website www.naac.gov.in

c. Liasioning be made with these institutions so as they may

provide the list of students getting admission in their institution.

d. Subsequently, branches/cluster shall issue In-Principle

sanction letter to students getting admission under various
courses conducted by these institutions (copy of format
enclosed as Annexure-IV).

25. Prepayment NIL- The student and co-obligants are free to prepay the loan
Penalty amount.
26. Clarification on a) In case the student is an orphan, the Cluster Head can
Co-obligations: waive the condition of Co-obligants after obtaining two
references about the conduct/integrity of the student.
b) Sanctioning Authority on merits can consider co-
obligation of one parent where it is not feasible, as in the
case of widow / widower / divorcee / separated / estranged
parents / single parents / one parent as NRI etc.
c) Sanctioning Authority, on merit basis, can accept two
alternate joint borrowers of sound means, in case of
student whose parents are having adverse remarks in
their credit history (CIBIL etc.) and adverse features of
loan accounts standing in their name.
27. Insurance a) It is mandatory to arrange for life insurance policy on the
students availing Education Loan.

Education loan Scheme: Master Circular 12 | P a g e

 b) The insurance premium can either be borne by the student /
co-borrower or it can be financed by Bank also as part of the
loan.
c) The insurance of mortgage property obtained as collateral
security shall be insured under agreed bank clause. The
premium shall be borne by the student / co-obligants.

Note:
Sanctioning authority may consider the premium amount of Life
Insurance policy of the students as one of the component of
finance, if requested by student / co-borrower.
28. Repayment Loan Limit Repayment Period
Irrespective of the Loan Limit Upto 15 years

Moratorium Period / repayment holiday Period:

Repayment Holiday / Moratorium- Course period + 1 year.
a) Moratorium period shall be exclusive of Repayment period.
b) Grace Period- 12 months after completion of the course.
c) Cluster Head is empowered to allow for moratorium taking
into account spells of under-employment/unemployment
two or three times (maximum of 6 months at a time) during
the life cycle of the loan. Simple interest is to be charged
during this moratorium period.
d) Banks may also encourage student borrower who wants to
set up start-up units by giving moratorium on repayment of
principal and interest during incubation period which may
be considered upto 2 years(apart from the original
moratorium). Cluster Head is the designated authority for
this.
e) Cluster Head are empowered to permit extension in study
period upto a maximum of two years, in cases where the
student is not able to complete the course/study for reasons
beyond his/her control after examining the facts and
genuineness of the case. In case the student discontinues
the course midway appropriate repayment schedule will be
worked out in consultation with the student/parents.
f) In case of education loan considered for undertaking
course like I.C.W.A., C.A., C.F.A., etc, the repayment
shall commence in accordance to scheme subject to
maximum moratorium period (Study period + Grace
period) of 60 months, from the date of first
disbursement.
g) Moratorium period for working persons may be
considered upto study period only.
h) Moratorium period under customized scheme may be
varied as per the approved terms of the scheme.
i) Repayment of loan is generally accepted via Equated
Monthly Installment method. However, after moratorium
Education loan Scheme: Master Circular 13 | P a g e
 period (study + grace period), many times the salary level
at start of the career of the student may not facilitate
comfortable payment of EMI, in such a situation,
Telescoping / Stepped-up installment method can be
adopted. However, the Cluster Head is authorized to
permit such telescoping / Stepped-up installment
option after examining the repaying capacity of
borrower on merit of the case.
Further while permitting Telescoping / Stepped-up installment
option, during initial repayment period, the installment amount will
be of lesser amount (but shall be more than accrued monthly
interest) say 1 year and thereafter the installment be reset on the
basis of then outstanding plus accrued interest (if any) in EMI for
the residual repayment period, ensuring that the account positively
liquidate in overall repayment period. Due-diligence shall be
exercised by the Cluster Head while permitting such option.

Extension in Repayment Period:

i) Existing Education Loan borrowers, who had availed Education
Loan with a repayment period upto 7/10 years shall have the
opportunity of getting the repayment period extended upto 15
years, as the case may be, and the same shall not be treated as
restructuring.
ii) The powers for allowing such extension in repayment period
under Education Loan Scheme to the existing Education Loan
borrowers have been vested with respective Sanctioning
Authority.
All Cluster Heads/ Incumbents to ensure that:
i) Extension, if any, in ‘repayment period’ is (a) need based; and
(b) is allowed only after taking into account the repaying capacity
of the borrowers;
ii) Extension is allowed only in Education Loan accounts, which
are ‘standard’ in the books of Bank as on the date of allowing such
extension;
iii) Such Extension in Repayment Period is not allowed with
retrospective effect;
iv) Such accounts are not treated as restructured accounts.
v) Total Repayment Period (i.e. before and after allowing such
extension) not to exceed the maximum permissible ‘Repayment
Period’ allowed under the Scheme;
vi) Request for extension in Repayment period from the Education
Loan borrowers is obtained and held on record.

29. Disbursement 1. For studies in India:

Loan shall be disbursed in stages as per requirement /
demand, directly to the institutions/vendors of books/
equipments/ instruments etc. to the extent possible.
Education loan Scheme: Master Circular 14 | P a g e
 2. For studies abroad:
In stages as per requirement/demand, directly to the
institutions subject to obtention of certified copies of relevant
pages of passport and visa of the student.

The consulates / embassies / High commissions of some

countries require a confirmation of enrolment at the time of
applying for visa by the student.
For this purpose, the said issuing authorities insist for release of
tuition fee for first semester to the education provider / university
out of the sanctioned loan. As such, Tuition fee for first
semester may be released to the institution without insisting
for visa from the student, subject to the condition that in case
the visa is not granted, the parents of the students will deposit the
loan amount with upto date interest immediately. Further
disbursement shall be made after obtaining the copy of visa duly
verified with the original one.

Note:
1. During the study period, in case the students fails in one or two
subjects and the institution permits the students to keep terms
and permit for appearing in next semester / term exam, in such
case subsequent installments could be disbursed after
verification of the same and confirming the said permission
from the institution.
2. Reimbursement of tuition fee, paid before release of advance
may be considered by the respective sanctioning authority
provided it is not more than six months old after collecting
evidence of such payment. However, this discretion will not be
used as a matter of routine and reimbursement of tuition fee
older than 6 months shall not be allowed in any case.
30. Follow-up To contact college / University authority to obtain progress report
monitoring on the student at regular interval for keeping a track record of the
student. In case of studies abroad loan disbursing branch/cluster
shall obtain the SSN/unique identification number/identity card and
note the same in banks records. Aadhar Number is mandatorily
to be obtained for the borrower and co-borrowers. THE UID
number issued by UIDIA may also be captured in bank record
as a tool to track the student.
Although the obtention of PAN details of the student is not a pre-
condition for education loan, however, the student may be asked
to submit PAN during the course of studies, If not available at the
time of sanctioning of loan.
The PAN detail also has its value in future tracking of the student.
Further, Clusters/branches will not take coercive methods for
recovery of their dues and practices such as displaying

Education loan Scheme: Master Circular 15 | P a g e

 names and photographs of defaulting students have been
stopped forthwith. Any violation be viewed seriously.
31. Asset “If the repayments in education loans are extended due to revision
Classification in the repayment period under the new Model Education Loan
Scheme the same may not be treated as restructuring. However,
this treatment would be available only to education loans which
are standard in the books of banks on the date of such extension
of repayment period.
Further, such extensions should not be given with a retrospective
effect and any extension in repayment period should be need
based and take into account the repayment capability of the
borrowers.” Sanctioning authority is empowered for permitting
such extension in existing education loans as per new terms, as it
does not tantamount to restructuring as per IBA guidelines.
“Repayment of the loan is expected to come from future earnings
of the students after completion of education. As such, education
loan cannot be classified NPA during the moratorium period or
upon failure of the borrower to service interest during the
moratorium period which is otherwise optional. The classification
of education loan NPA during the moratorium period is not only
unlawful but also an act of playing with the future of students and
Nation.”
However, in case the education loan account becomes non-
performing assets (NPA), there shall not be any reversal of
interest accrued during the repayment holiday / moratorium
period.
32. Disposal of a) Normally the loan shall be disposed off within 15 days of
application, receipt of duly completed application with supporting
Loan Disposal documents.
period &
punitive b) The Education loan applications cannot be rejected by the
measures sanctioning authority under whose powers the same falls. In
such cases, the delegated authority to decline/ reject such
credit proposal shall be:
Sanctioning Authority Delegated Authority for
Decline / Rejection

Cluster CMH (RAG)

Classic Branches CMH(Classic Business)

Head Office Respective Sanctioning

Authority

c) The status of declined application be conveyed to the student

along-with the reason for rejection. Punitive action shall be
taken in case Cluster Head/Branch Managers repeatedly reject
education loan proposal without any valid reason/flimsy
ground.

Education loan Scheme: Master Circular 16 | P a g e

33. Capability The Cluster/branches may issue capability certificate (Financial)
certificate for student for going abroad for higher studies based on the
(Financial) financial and other supporting documents as the same are
required by some of the foreign universities. The requisite charges
as defined in service booklet shall be recovered from the borrower
(s).
Due diligence is required for issuing financial capacity certificate to
avoid irregularities in issuance of such certificates for submission
to foreign universities.

34. No dues The applicant may not be insisted upon to obtain no dues
certificate certificate. In lieu of this, Cluster/branches may obtain a
declaration/affidavit that no loan has been taken for this purpose
from other financial institutions.

35. Discretionary (` In Lacs)

Powers B.I. (Branch not mapped Cluster Head/CMLCC/HLCC-
with Cluster) GM/HLCC—ED/CAC/MCB
a)For General
Public Scale-I 7.5 Scale-III 35
Scale-II 10 Scale-IV 50
Scale-III 25 AGM 100
Scale-IV 40 DGM 100
Scale-V 50 GM 100
Scale-VI 65 HLCC-GM 150
Scale-VII 75 HLCC-ED 250
CAC FP(within the
prescribed
regulatory limit)
MCB FP(within the
prescribed
regulatory limit)
b) For Staff Place of posting of the employee availing Sanctioning
the Loan Authority
Classic Branches/ CMO-CB (excl. CMH-CB)
CMLCC-HCB

All Staff posted at Head Office / Retail Cluster HLCC-GM

Heads/ CMH-CB (RAG) at HO
Respective
Retail Cluster
Head (Where
All Staff members posted other than defined Retail Cluster
above is not there,
designated or
nearby or
mapped
Cluster Head)

Education loan Scheme: Master Circular 17 | P a g e

36. Clarification on 1. The sanctioning authority is permitted to sanction loan to
sanctioning different members of the same family, treating such loans as
powers an independent loan.
2. Discretionary power to consider loan for Commercial Pilot
Licenses and Air Hostess is presently vested with Head Office.
37. Delegation of a. The powers have been delegated to GM (Retail) for entering
Powers for into agreement / MOU with Educational Institutions (having
entering into approval from any regulatory bodies) on normal terms of
agreement with education loan scheme.
educational
institutions b. The name of our bank be included as a preferred financer in
(approved by the brochure of such approved institutions.
regulatory
authorities) Further, while entering into agreement / MOU, following conditions
shall be stipulated that:
\

 The institution shall note the particulars of the loans availed

by the students from Oriental Bank of Commerce on their
records.

 On completion of the course by the students, the institution

shall provide information related to placement (On campus
or Off Campus), details of employer, designation, place of
posting etc. of the students to the bank.

The institutions not having approval from any regulatory authority

and where the bank intends to finance education loan to their
students, the proposal will be placed to CRMC as per normal
practice on case to case basis.
38. Deviation a) HLCC-ED is empowered to permit deviation in the scheme
Manager within the overall framework of IBA/ RBI guidelines.
b) Deviations in Rate of Interest (subject to minimum of One Year
MCLR), Process fee shall be allowed by the authority as under:
Deviation Authority ROI Process Fee
HLCC-ED Upto 2.00% FULL
CAC Upto 3.00%
c) HLCC-ED is empowered for permitting 100% waiver in interest
switch-over fee.
39. Approval of In case of courses offered by Institutions not approved by the
courses/ concerned statutory regulatory bodies, Cluster/ branches may
institutions consider loan only if the institution is approved from Head Office
by routing their request for approval through CMO on the
prescribed Performa as per Annexure-VII.

The Cluster Monitoring Office will make independent appraisal

about the institution, its Infrastructure, academic facilities and
placement record. Thereafter they may submit specific
recommendations to Retail Credit Department, HO for inclusion of
the institution in Bank’s approved list of Educational Institutions.

40. Private In case of Private Institutions which conduct courses leading to

Education loan Scheme: Master Circular 18 | P a g e
 institutions Diplomas / Certificates on Computers, E-Commerce and other Hi-
which conduct Tech curriculum, the General Manager –RAG at HO are
courses authorized to approve the names of such institutions like
leading to APTECH etc. subject to the condition that the ceiling of the
diplomas/certif education loan amount shall be ` 50000/-.
icates on
computers, 1. NIIT: The NIIT is an approved institution & the education loan
e-commerce ceiling for courses conducted by it shall be ` 1.75 Lacs.
and other hi- Approved courses are Diploma in IT (DIT), Honors Diploma in
tech IT (HND), ANIIT, GNIIT & Post Graduate certification
curriculum programme in Business Analytics (PGCBA).

2. NIIT Imperia: Limit is Rs. 4.00 lacs Details are attached as

annexure .
3. M/s. Jain International Trade Organization (JITO):
41. CIBIL The CIBIL report be extracted in each case (Cost be borne by the
party) and analyze for taking prudent decision while considering
education loan proposal.
The PAN detail / Aadhar detail has its value in future tracking of
the student.
42. Credit Rating  For Category A Institutions:
Education loan upto any loan amount may be sanctioned on
merits irrespective of their Rating grade.
However for SRM Chennai Loan be sanctioned on merits
irrespective of their Rating grade upto following loan amount:
• MBBS and MD Course-Rs. 35.00 lacs
• BDS and MDS Course-Rs. 25.00 lacs
• Paramedical Course-Rs. 7.50 lacs
 For Category B Institutions:
Education loan upto ` 10.00 Lacs may be sanctioned on merit
irrespective of their Rating grade.
 In other cases, education loan upto ` 7.50 Lacs may be
sanctioned on merit irrespective of their Rating grade.

For Education Loans with tangible security, guidelines issued by

RMD Deptt. in this regard from time to time shall be complied with.
43. Appraisal/ Education Loan can be appraised/sanctioned/disbursed at any of
Sanction/ the following places :
Disbursement
1. Place of Domicile
2. Present place of posting of the borrower/co-borrower
3. Branch/Cluster nearby the Institution of the borrower

In case the loan is sourced/sanctioned by the Branch/Cluster

nearby the institution of the borrower and native
place/residence of the borrower is at a different place,
Branch/cluster located nearby the residence/native place of the
student shall verify the KYC norms & extend their prompt co-

Education loan Scheme: Master Circular 19 | P a g e

 operation for fulfilling the procedural guidelines at the request of
loan sanctioning branch/cluster.
Note: The above guidelines are applicable to ‘A’ and ‘B’ Category
also.
44. Grievance The contact details of the chief grievance officer be displayed at
Redressal branch premises as per guidelines and shall be informed to the
Mechanism applicants/ students.
45. Provision for Proposal for change of course / education Institution by the
change of students can be considered on case to case basis by sanctioning
course / authority provided: -
education a) Job prospects are not affected adversely
Institution b) Repayment period is not affected
c) Loan amount is not increased
However, the above-said change be permitted on valid genuine
ground and merit of the proposal.
46. Documentation Documentation in case of Minor Student - In case the student is
& opening of minor, the education loan documents shall be executed by the
Savings father of the student / guardian as co-borrower as well as on
Accounts behalf of the minor student. On attaining majority, the student will
consent, confirm and acknowledge the documents, the loan
amount with interest and other costs within 3 months from the
date of attaining majority as per terms of the agreement of
term loan for education
Saving Bank account of the student / co-obligants shall be
opened.
47. Validity of The terms of sanction shall remain valid for 6 months. The
Sanction borrower should avail sanction limit within the prescribed period
after executing documents etc.
48 Bank Some private Medical Institutions are now demanding Bank
Guarantee Guarantee equivalent to the total course fees amount.
Hence, following conditions needs to be fulfilled for Bank
Guarantee:
a) Bank Guarantee to be issued for a maximum period of 6 years
or the course period whichever is lower.
b) Since liability under the bank Guarantee will be reduced every
year when the fee is paid to the institution, so the collateral
security equal to the Bank Guarantee or Education loan
sanctioned whichever is higher should be obtained.
c) Bank Guarantee will not be provided in isolation.
d) Cash Margin, collateral security, BG commission to be
obtained for issuing Bank Guarantee as per the loan Policy
issued by the RMD from time to time.
(Format enclosed-Annexure X)
49 Vidya Laxmi NSDL has developed a portal namely “Vidya Lakshmi Electronic
Portal Platform”, which provides a single window for students about
information of government scholarships and education loans of
banks and single loan application for students for all banks
connected to the portal. As per Ministry Directions it is
Education loan Scheme: Master Circular 20 | P a g e
 mandatory to apply loan through Vidya Laxmi Portal. As
such, borrowers be guided to apply the Loan through Portal
only.
50 Takeover 1. If a student has secured admission in any institute which is
Norms categorized as ‘A’ or ‘B’ category institute in our Bank
where Rate of Interest is very attractive, and availed
Education Loan from some other Bank/Financial Institution
at higher Rate of Interest due to non-awareness of our
Customized Scheme for ‘A’ and ‘B' Category Institutes, in
such cases, Branches/Clusters can market our scheme and
takeover the Education loan. Further, the collateral
security provided to other Bank/Financial Institution
shall not be diluted and all guidelines as per IBA
Education Loan Scheme and the Bank’s Loan Policy
have to be complied with.

2. The student has taken education loan from some other

bank for any graduate course and now has secured
admission in post-graduate course in premier institutes
categorized as ‘A’ or ‘B’ in our scheme and now
approaches our Bank for Education Loan for post graduate
course. In such cases, existing education loan from the
other Bank shall be taken over subject to following terms
and conditions.
Conditions:

2.a Takeover of Education Loan availed from other

bank without collateral security (Total loan within
the overall limit of ‘A’ and ‘B’ category)

If the total of loan for graduation course already

availed from some other Bank/FI and 2nd loan for
higher education from our Bank for ‘A’ and ‘B’
Category Institute is within the overall limit of ‘A’ and
‘B’ category, then the loan can be granted without
collateral security. Further, all takeover guidelines as
per IBA Education Loan Scheme and the Bank’s Loan
Policy have to be complied with.

Example1: Education loan of Rs.4.00 Lacs for

graduation course from some other Bank/FI is availed
i.e. without collateral security(Present O/s Rs.
4.50Lacs) and the student has secured admission for
higher education in ‘A’ category institute and
approaches our Bank for Education Loan of Rs.15
Lacs:

The total exposure in such a case will be Rs.19.50

Lacs, which is within the overall limit of ‘A’ category
institute i.e. Rs. 25.00 Lacs. Hence, Education Loan

Education loan Scheme: Master Circular 21 | P a g e

 alongwith Takeover Loan will be granted without
collateral security.

2.b Takeover of Education Loan availed from other

bank with collateral security(Total loan within the
overall limit of ‘A’ and ‘B’ category)

In case education loan for graduation course is

already availed from some other Bank/FI and
collateral security has been provided to that
Bank/Financial Institution for availing Education Loan
and now, the student approaches our Bank for 2 nd
loan for higher education under ‘A’ and ‘B’ Category
Institute and the total exposure for both the loans is
within the overall limit of ‘A’ and ‘B’ category:
In such case, Education loan along with Takeover
Loan can be granted without diluting collateral
security. Further, all takeover guidelines as per IBA
Education Loan Scheme and the Bank’s Loan Policy
have to be complied with.

Example2: Education Loan for graduation course

from some other Bank/FI is Rs. 8.00lacs with 100%
collateral security (Present O/s Rs.8.50Lacs) and now
the student has secured admission for higher
education in ‘A’ category institute, and approaches our
Bank for Education Loan of Rs.10 Lacs:

In such case, total exposure will be Rs. 18.50 Lacs,

which is within the overall limit of ‘A’ category institute
i.e. Rs. 25.00 Lacs. Hence, Education Loan from our
Bank alongwith Takeover Loan will be granted with
existing collateral security only i.e. the collateral
security provided to other Bank/Financial
Institution shall not be diluted. It should be
obtained/charge be created/mortgaged/ with our
Bank also.

2.c Takeover of Education loan availed from other bank

with or without
collateral security (Total loan exceeds the overall
limit of ‘A’ and ‘B’ category)

If the total of Education Loan for graduation course from

some other Bank/FI and 2nd Education Loan from our
Bank for ‘A’ and ;B; Category Institute exceeds the
overall limit of category ‘A’ and ‘B’, in such cases the
loan shall be granted/taken over with 100% collateral
security (combined for both loans).
Example 3: If Education Loan of Rs.4.00lacs for

Education loan Scheme: Master Circular 22 | P a g e

 graduation course is availed from some other Bank/FI
without collateral security (Present O/s Rs.4.50 Lacs),
and the student has secured admission in ‘B’ category
institute for higher education. Further, he/she
approaches our Bank for Education Loan of Rs.8.00
Lacs:
In such case, total exposure will be Rs. 12.50 Lacs,
which exceeds the overall limit of ‘B’ category institute
i.e. Rs. 10.00 Lacs. Hence, the Education Loan
alongwith Takeover Loan be granted at 100% collateral
security i.e. security of equal to more than Rs. 12.50
Lacs.

Note:

While Takeover of Education Loan, the collateral

security provided to other Bank/Financial Institute
shall not be diluted. It should be obtained and charge
be created/ mortgaged in our Bank also.

Education loan Scheme: Master Circular 23 | P a g e

 B. SALIENT FEATURES OF CATEGORY A & B INSTITUTIONS
Categorization of institutions in A & B categories will supersede all existing
customized schemes for the students of IIMs, IITs, XLRI, ISB, IMT and MDI-
Gurgaon.
S.No. Particulars Terms
1. Category A & All Regular/Part time courses conducted by category A & B
B institutions institutions are eligible for financing. The benefits granted to these
institutions shall be as under:

Particular Category A Category B

Loan Limit No upper Ceiling. As per the ` 10.00 Lacs
fee structure of the
institution.
For SRM Chennai:

 MBBS and MD Course-

Rs. 35.00 lacs
 BDS and MDS Course:
Rs. 25.00 lacs
 Paramedical Course:
Rs. 7.50 lacs
Rate of One Year MCLR One Year MCLR +0.50%
Interest
Margin NIL NIL
Process Fee NIL NIL
Collateral NIL NIL
Security
Special In case higher loan limit is requested (apart from the
Rider above mentioned limit), 100% tangible security with
value equivalent to full loan amount is required.

List of A & B category institutions is attached as Annexure-I

Note:
Some ‘A’ and ‘B’ category institutes conduct Dual Country
Programme under which a student is sent abroad to
study/complete a part of the course. In such cases, the
categorization shall be done as per the degree providing institute
i.e. all norms regarding Rate of Interest, Margin, Collateral Security
etc. will be as per norms applicable for Education Loan for ‘A’ and
‘B’ Category Institutes.

Example: S P Jain Institute of Management and Research

(SPJIMR), Mumbai which is an ‘A’ Category Institute, is conducting
1 year course in India and 2nd Year in Dubai and the degree is
provided by SPJIMR Mumbai. In such a case, Education Loan
shall be considered in ‘A’ Category for all purposes.

Education loan Scheme: Master Circular 24 | P a g e

 Parental Co-  For following institutes:
obligation
1. IIM-Ahmedabad
2. IIM-Bangalore
3. IIM-Calcutta
4. IIM-Indore
5. IIM-Kozhikode
6. IIM-Lucknow
7. Indian School of Business (ISB)-Hyderabad Campus
8. XLRI
No Parental/spouse Co-obligation

 For rest of the A category of the institutes:

Either parent/guardian may be co-obligant (irrespective of means
and age of student). In case of married person, co-obligator can
be either spouse or the either Parent/ either Parent-in-law.
Parental co-obligation can also be substituted by a suitable third
party guarantee. The discretionary powers shall vest with Cluster
Head for acceptance of above-said third party guarantee.

2. Appraisal / Education Loan can be appraised/sanctioned/disbursed at any of

Sanctioning / the following places :
Disbursement
1. Place of Domicile
2. Present place of posting of the borrower/co-borrower
3. Branch/Clusters nearby the Institution of the borrower

In case the loan is sourced/sanctioned by the Branch/Cluster

nearby the institution of the borrower and native
place/residence of the borrower is at a different place,
Branch/cluster located nearby the residence/native place of the
student shall verify the KYC norms & extend their prompt co-
operation for fulfilling the procedural guidelines at the request of
loan sanctioning branch/cluster.

Education loan Scheme: Master Circular 25 | P a g e

C-EDUCATION LOAN SCHEME FOR WORKING PROFESSIONALS FOR PART TIME
COURSES
S.No. Purpose To provide finance for pursuing Part time professional courses to
enhance their career prospects.
1. Eligibility 1. Indian national
2. Up to 55 years of age
3. Passed at least graduation exam
4. Must be working in public/private/ defense enterprises etc.
5. Have secured admission in an approved institution(including A & B
Category Institutions) on part-time basis.
2. Component As per normal terms of education loan scheme.
of finance
3. Loan As per fee structure of institution.
Amount
4. Margin 25%

Note:

For A category institutes The borrower be given two option for

Margin as per his/her convenience :
1. Margin- NIL repayment starts next month. No moratorium.
2. Margin- 15% and moratorium allowed upto study period only

5. Rate of As per normal terms of Oriental Education Loan Scheme.

interest
6. Penal 2% penal interest over the normal interest rates on the overdue
Interest amount for irregular period.
7. Process/ As per normal terms of Oriental Education Loan Scheme.
upfront fee
8. Sanctioning As per discretionary power chart under Oriental Education Loan
Authority Scheme.
9. Security 1. As per Normal terms of Oriental Education Loan Scheme
2. Electronic Clearance System (ECS) / NACH Debit / Standing
Instructions/Auto Collection Procedure from the operative
accounts of the borrower with us, given the mandate to collect
the EMI of the borrower.
10. Moratorium Upto study period only.
period
11. Repayment As per normal terms of Oriental Education Loan Scheme, subject to
condition that last repayment date will be upto retirement date.

Education loan Scheme: Master Circular 26 | P a g e

12. General a) In case of education loan to working professionals, Salary
Conditions Certificate along with deductions duly certified by employer shall
be obtained and kept on record after verification.
b) Branch Manager/Cluster Head shall ensure that agreed
installment is serviced regularly from salary. Letter of authority
duly confirmed by the employer for deduction of monthly
installment from salary be obtained OR ECS/NACH Debit
/Standing instruction mandate shall be obtained.
c) The CIBIL report & Credit Rating be extracted in each case (Cost
be borne by the party) and analyzed for taking prudent decision
while considering education loan proposal for working
professional.
d) All the other usual terms and conditions of Oriental Education
Loan Scheme shall be complied with.
13 For Concessional Rate of Interest and relaxation in security clause to
Category A students of Category A & B Institutions (detailed in Oriental
& B Education Loan Scheme) will be applicable.
Institutions

Education loan Scheme: Master Circular 27 | P a g e

 D- EDUCATION LOAN – CUSTOMIZED SCHEME FOR NIIT IMPERIA
M/s NIIT Ltd. is a premier educational institution in the field of extending computer education
in India. The company under the brand name of NIIT Imperia is conducting special courses
for working executives for further improving their knowledge / skill in collaboration with
reputed institutions.
The course durations are ranging from 6-12 months and on its completion the respective
institution issue certificate to all participants.

S.No. Particulars Terms

1. Purpose To provide finance for pursuing Part time professional courses
for enhancing skill/ career prospects.
2. Eligibility  Indian national
 Up to 55 years of age
 Passed at least graduation exam
 Working as an executive in public/private/ defense
enterprises
 Have secured admission in an approved institution on part-
time basis.
3. Component 1. Admission fee/tuition fee/Examination fee
of finance 2. Books & Stationery
3. Equipments
4. Loan ` 4.00 Lacs (maximum)
Amount
5. Margin 25%
6. Rate of One Year MCLR+ 2.00% p.a. with monthly rest
interest
7. Penal 2% penal interest over the normal interest rates on the overdue
Interest amount for irregular period.
8. Sanctioning As per the Normal Education Loan Scheme Discretionary power
Authority Chart
9. Security NIL
10. Repayment 5 years OR up to retirement, whichever is earlier.
11. Moratorium NIL or upto study period.
period
12. Process/ NIL
upfront fee
13. Place of The loan can be considered at place of domicile or place of
availment posting / service.
14. General e) Salary Certificate along with deductions duly certified by
Conditions employer shall be obtained and kept on record after verification.

f) Branch Manager/Cluster Head shall ensure that agreed

installment is serviced regularly from salary. Letter of authority
duly confirmed by the employer for deduction of monthly
installment from salary be obtained OR ECS/SI/post dated
cheques for minimum 24 month’s installment be obtained

g) All the other usual terms and conditions of IBA model education
loan scheme for study in India & Abroad shall be complied with.

Education loan Scheme: Master Circular 28 | P a g e

 E. CREDIT GUARANTEE FUND SCHEME FOR EDUCATION LOANS (CGFSEL)

S. Particulars Terms
No.
1. Nomenclature Credit Guarantee Fund Scheme for Education Loans (CGFSEL)
of the
Scheme
2. Loan Limit Maximum upto ` 7.50 Lacs
3. Rate of Institution Rate of Interest Scheme Free Interest Credit
Code Code Table Guarantee
Interest 10 Code Code
For One Year MCLR TL647 EL17 MCLNY CGSEL
Category
“A”(For
Loans
upto
` 7.50
lacs)
For One Year MCLR +0.50% TL647 EL17 ML050
Category
“B”(For
Loans
upto
` 7.50
lacs)
Others Up to ` No One Year TL641- EL17 ML200
4.00 collateral MCLR Study in
Lacs security +2.00% India
and third
Above ` party One Year TL642-
4.00 Lacs guarantee MCLR Study
& Upto ` (Credit +2.00% Abroad
7.50 Lacs Guarantee
cover to be
obtained)
Simple interest during moratorium period (Study+ Grace Period) and thereafter
the interest shall be compounded.
Special Rates:
0.50% concession over the normal rate of interest will be applicable to women
beneficiaries, SC/ST & disabled students. However, the 0.50% concession will
be available for only one characteristic. The benefit will not be merged with
other benefit.
Floor Rate:
Rate of interest will not fall below One Year MCLR under any circumstances.
4. Margin Category Category Other Institutions
“A” “B”
NIL NIL Up to ` 4.00 Lacs NIL
Above ` 4.00 Lacs 5% For studies in
India
15% For studies
Abroad
5. Security 1. No collateral security or third party guarantee
2. Parents / guardian to be joint borrower(s) (irrespective of their means and
age of student)
3. In case of married person, co-obligator can be either spouse or the
Education loan Scheme: Master Circular 29 | P a g e
 parent(s) / parent(s)-in-law
Note:
For “A” Category Institutions:
 Either parent/guardian may be co-obligant (irrespective of his/her
means and age of student)
 In case of married person, co-obligator can be either spouse or the
either parent/ either parent-in-law. Parental co-obligation can also be
substituted by a suitable third party co-obligation.
The discretionary powers shall vest with Cluster Head for acceptance of
above-said third party guarantee.
6. In Case the In case the borrower/co-borrowers insist on collateral security in Education
Borrower Loan above ` 4.00 lacs and upto ` 7.50 lacs to avail the benefit of lower Rate
Offers of Interest, the loan can be sanctioned under existing Education Loan Scheme
Collateral of the Bank but such accounts shall not be eligible for coverage under
Security CGFSEL and loan account will be opened with Free code 10 as EL01 or EL02.
7. Guarantee 1. Guarantee cover will be available for 75% of the amount in default which
cover would be settled as under:
 75 percent of the guaranteed amount will be paid on preferring of
eligible claim by the Bank within 30 days subject to the claim being
otherwise found in order and complete in all respects.
 The balance 25% of the guaranteed amount will be paid after
obtaining a certificate from the Bank that all avenues for recovering
the amount have been exhausted.
8. Guarantee  Annual Guarantee Fee (AGF) of 0.50% p.a. of the outstanding loan amount
Fee as on date of application of guarantee cover shall be paid upfront to the
Fund within 30 days from the date of Credit Guarantee Demand Advice
Note (CGDAN) of guarantee fee. The fee shall be borne by the Bank.
 All subsequent AGFs would be calculated on the basis of the outstanding
loan amount as at the beginning of the financial year. However, the Fund
reserves the right to charge different guarantee fees in future for different
educational loans depending on their risk rating/risk profile.
9. Lock-in 12 months from the date of commencement of guarantee cover or end of
Period period of moratorium of interest, whichever is later.
10. Extent of the The Fund shall provide guarantee cover to the extent of 75% of the amount in
Guarantee default.
11. Invocation of Guarantee can be invoked:
Guarantee  Within a maximum period of one year from date of NPA, if NPA is after
lock-in period
 Within one year of lock-in period, if NPA is within lock-in period
12. Penal The Bank shall be liable to refund the claim released by NCGTC together with
Interest to penal interest at the rate of 4% above the prevailing Bank Rate, if such a recall
the Fund is made by NCGTC in the event of deficiencies having existed in the matter of
appraisal / renewal / follow-up / conduct of the Education Loan or where
lodgement of the claim was more than once or where there existed
suppression of any material information on part of the Bank for the settlement
of claims. The Bank shall pay such penal interest, when demanded by the
Fund, from the date of the initial release of the claim by NCGTC to the date of
refund of the claim.
13. Subrogation  The details of efforts for recovery, realizations and such other information

Education loan Scheme: Master Circular 30 | P a g e

 of Rights shall be furnished by the Bank to NCGTC as and when required. NCGTC
shall not exercise any subrogation rights and the responsibility of the dues
shall rest with the Bank.
 In the event of a borrower owing several distinct and separate debts to the
Bank and making payments towards any one or more of the same,
whether the account towards which the payment is made is covered by the
guarantee of the Fund or not, such payments shall, for the purpose of this
clause, be deemed to have been appropriated by the Bank to the debt
covered by the guarantee and in respect of which, a claim has been
preferred and paid, irrespective of the manner of appropriation indicated by
such borrower or the manner in which such payments are actually
appropriated.
 Every amount recovered and due to be paid to NCGTC shall be paid
without delay, and if any amount due to NCGTC remains unpaid beyond a
period of 30 days from the date on which it was first recovered, interest
shall be payable to NCGTC by the lending institution at the rate which is
4% over and above the Bank Rate for the period for which payment
remains outstanding after the expiry of the said period of 30 days.
14. Appropriation Appropriation of amount realized by the Bank in respect of a credit
of Recovery facility after the guarantee has been invoked:

Where subsequent to the Fund having released a sum to the Bank towards
the amount in default in accordance with the provisions of this scheme, the
Bank recovers money subsequent to the recovery proceedings initiated by it,
the same shall be deposited by the Bank with NCGTC, after adjusting towards
the legal costs incurred by it for recovery of the amount. The Fund shall
appropriate the same first towards the pending service fee, penal interest, and
other charges due to the Fund, if any, in respect of the credit facility towards
which the amount has been recovered by the Bank, and the balance, if any,
shall be appropriated in such a manner so that losses on account of deficit in
recovery of the credit facility between NCGTC and the Bank are in the
proportion of 75% / 25%, respectively.
14. Scheme 1. The loan shall be sanctioned in accordance with the IBA Model
Specific Educational Loan Scheme for pursuing higher studies in India and
Conditions Abroad and conduct the account of the borrower with normal banking
prudence and due diligence
2. NCGTC reserves the right to accept or reject any proposal referred to it
by the Bank which otherwise satisfies the norms of the scheme.
3. Education Loan eligible under the scheme as on the material date i.e.
the date on which the guarantee fee on the amount covered in respect
of eligible borrower becomes payable by the Bank to the Trust
a. There are no overdue in respect of the account and / or the loan
has not been classified as a Non-Performing Asset (NPA) in the
books of the Bank, and/or
b. The activity of the borrower for which the credit facility was
granted has not ceased; and / or
c. The credit facility has not wholly or partly been utilized for
adjustment of any debts deemed bad or doubtful of recovery,
without obtaining a prior consent in this regard from NCGTC.
4. Education Loan not eligible under the scheme:

Education loan Scheme: Master Circular 31 | P a g e

 a. Any Education Loan in respect of which risks are additionally
covered by Government or by any general insurer or any other
person or association of persons carrying on the business of
insurance, guarantee or indemnity, to the extent they are so
covered.
b. Any Education Loan, which does not conform to, or is in any way
inconsistent with, the provisions of any law, or with any directives
or instructions issued by the Central Government or the Reserve
Bank of India, which may, for the time being, be in force.
5. The Fund may, at its discretion, approve/frame a list of educational
institutes and/or their courses, loans for which the guarantee cover
will be available, or the Fund may also notify the categories of
educational institutions/courses for which the guarantee cover shall
not be available.
6. Aadhar Number of the Borrower/Co-Borrowers shall be linked with the
Education Loan. Borrower’s/Co-Borrower’s name shall also be
registered with an appropriate credit information bureau.
7. If a borrower becomes ineligible for being granted education loan
under the Scheme, the liability of NCGTC in respect of Education
Loan granted to him/ her by a Bank under the Scheme shall be
limited to the liability of the borrower to the Bank as on the date on
which the borrower becomes so ineligible, subject, however, to the
limits on the liability of NCGTC fixed under this Scheme.
15. General Wherever any condition is not mentioned in the scheme, the same shall be
Conditions governed by the existing IBA Model Education Loan Scheme for pursuing
Higher Education in India and abroad.

Education loan Scheme: Master Circular 32 | P a g e

 F. Credit Guarantee Scheme for Skill Development Loans (CGFSSD)

S. No. Particulars Terms

1. Nomenclature of Credit Guarantee Scheme for Skill Development Loans (CGFSSD)
the Scheme
2. Eligible Persons 2.1 Nationality: The applicant should be an Indian National.
2.2 Minimum Age: There is no specific restriction with regard to
the age of the student to be eligible for loan under Oriental Skill
Loan Scheme. However, if the student is a minor, while the parent
executes documents for the loan, the Bank will obtain a letter of
acceptance/ratification from him / her upon attaining majority.
2.3 Minimum Qualification: As required by the enrolling
institutions/organizations as per NSQF (National Skill Qualification
Framework)
2.4 Know Your Customer (KYC) Norms: Aadhar number will also
be considered as a valid proof for KYC norms in addition to other
identity and address proof as determined by the Bank.

3. Eligible 3.1 Training Institutes: Any individual who has secured admission
Institutes/Eligible in a course run by Industrial Training Institutes (ITIs), Polytechnics
Courses 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 loan under Oriental Skill Loan Scheme. The
Government of India / State Governments may, from time to time,
notify institutes/organizations for the purpose.

3.2 Training Courses: Courses run by above mentioned Training

Institutes (in 3.1) aligned to National Skill Qualification Framework
(NSQF) shall be covered by the Oriental Skill Loan Scheme. There
is no minimum course duration.
4. Loan Limit The minimum and maximum loan limit under this scheme is
Rs. 5000/- and Rs.1,50,000/- respectively, without any collateral
security and/or third party guarantee. However, the Fund reserves
the right to revise the loan limit as and when required.
5. Components of 1. Tuition / Course Fee
Finance 2. Assessment Fee/ Examination Fee / Library Charges /
Laboratory Fee
3. Caution Deposit
4. Purchase of books, equipments and instruments
5. Any other reasonable expenditure found necessary for
completion of the course (As such courses are localized
Education loan Scheme: Master Circular 33 | P a g e
 boarding, lodging may not be necessary based on the cost of
living in the particular area. However, wherever it is found
necessary, the same shall be considered on merits).
6. Life Insurance premium of the student

6. Rate of Interest One Year MCLR + 1.50% floating with Monthly rest

Simple interest during moratorium period (Study+Grace Period)

and thereafter the interest shall be compounded.
Loan Rate of Interest Free Scheme Credit
Limit Interest Table Code Code Guarantee
Code 10 Code
Upto One Year ML150 EL07 TL646 CGSSD
` 1.50 MCLR+1.50%
Lacs

Special Rates

0.50% concession over the normal rate of interest will be

applicable to women beneficiaries, SC/ST & disabled students.
However, the 0.50% concession will be available for only one
characteristic. The benefit will not be merged with other benefit.

Floor Rate:
Rate of interest will not fall below one year MCLR under any
circumstances.
7. Margin NIL
8. Processing NIL
Charges
9. Credit Rating In all cases, the rating is to be done in accordance to existing
guidelines.

It is relevant that Education Loan upto ` 1.50 Lacs may be

sanctioned on merit irrespective of their Rating grade.

The time-to-time guidelines issued by RMD Deptt. in this regard

shall be complied with.
10. Security 1. No collateral security or third party guarantee
2. Parents / guardian to be joint borrower (s) (irrespective of their
means and age of student)
3. In case of married person, co-obligator can be either Spouse or
the Parent(s) / Parent(s)-in-law.
11. Moratorium Upon completion of course, repayment will start after the
Period moratorium period as under:
For courses of duration 6 months from the
upto 1 year completion of course
For courses of duration 12 months from the
above 1 year completion of course.
Education loan Scheme: Master Circular 34 | P a g e
12. Repayment  Loans upto ₹ 50,000 -Upto 3 years
 Loans between ₹ 50,000 to ₹ 1 lakh -Upto 5 years
 Loans above ₹ 1 lakh -Upto 7 years
 The above repayment period is exclusive of moratorium period.
In case the student discontinues the course midway, appropriate
repayment schedule will be worked out in consultation with the
student/parents/co-obligants.
13. Disbursement Loan shall be disbursed in stages as per requirement / demand,
directly to the institutions/vendors of books/ equipments/
instruments etc. to the extent possible.
14. Discretionary All Cluster Heads/Classic Branches irrespective of their scale upto
Powers ` 1.50 Lacs

HLCC-ED may permit higher amount on merit basis.

15. Deviation HLCC-ED
Manager
16. Prepayment NIL-The borrower may repay the Loan in advance either in full or in
Penalty part.
17. Guarantee 2. Guarantee will be available for 75% of default which would be
Cover settled, on claim, in one go after the Bank submits a certificate
stating to the effect that all avenues of recovering the amount in
default have been exhausted and there is no further scope for
recovering the amount and that the claim is found in order and
complete in all respects.
18. Guarantee Fee For availing the guarantee coverage, the Bank shall pay Guarantee
Fee of 0.125% per calendar quarter (i.e. 0.50% p.a.) on the quarter
end outstanding portfolio balance (skill loans).
Guarantee fee shall be paid within 16 days from the end of the
calendar quarter. (The Bank would need to furnish a Management
Certificate within 10 days from the end of the calendar quarter, after
which, a Credit Guarantee Demand Advice Note [CGDAN] would
be issued by NCGTC within 3 days of receipt of Management
Certificate and subsequently, the guarantee fee shall be payable
within 3 days from the issue of CGDAN).

19. Lock-in Period 12 months from the date of commencement of guarantee cover or
end of period of moratorium of interest, whichever is later.

20. Extent of the The Fund shall provide guarantee cover to the extent of 75% of the
Guarantee amount in default. The Fund reserves the right to modify the
same. The guarantee cover will commence from the date of
payment of guarantee fee and shall run through the agreed tenure
of the Skill Loans.

21. Invocation of Guarantee can be invoked:

Guarantee
 Within a maximum period of one year from date of NPA, if NPA
is after lock-in period
Education loan Scheme: Master Circular 35 | P a g e
 OR
 Within one year of lock-in period, if NPA is within lock-in period
22. Refund of Claim In case of deficiencies observed in the matter of appraisal /
renewal / follow-up / conduct of the Skill Development Loan or
where lodgement of the claim was more than once or where there
existed suppression of any material information on, the Bank shall
have to refund the claim released by NCGTC together with penal
interest at the rate of 4% above the prevailing Base Rate, if such a
recall is made by NCGTC.

23. Subrogation  The details of efforts for recovery, realizations and such other
Rights information shall be furnished by the Bank to NCGTC as and
when required. NCGTC shall not exercise any subrogation
rights and the responsibility of the dues shall rest with the Bank.
 In the event of a borrower owing several distinct and separate
debts to the Bank and making payments towards any one or
more of the same, whether the account towards which the
payment is made is covered by the guarantee of the Fund or
not, such payments shall, for the purpose of this clause, be
deemed to have been appropriated by the Bank to the debt
covered by the guarantee and in respect of which, a claim has
been preferred and paid, irrespective of the manner of
appropriation indicated by such borrower or the manner in
which such payments are actually appropriated.
 Every amount recovered and due to be paid to NCGTC shall be
paid without delay, and if any amount due to NCGTC remains
unpaid beyond a period of 30 days from the date on which it
was first recovered, interest shall be payable to NCGTC by the
lending institution at the rate which is 4% over and above the
Bank Rate for the period for which payment remains
outstanding after the expiry of the said period of 30 days.
24. Appropriation Appropriation of amount realized by the Bank in respect of a
Rights credit facility after the guarantee has been invoked:

Where subsequent to the Fund having released a sum to the Bank

towards the amount in default in accordance with the provisions of
this scheme, the Bank recovers money subsequent to the recovery
proceedings initiated by it, the same shall be deposited by the
Bank with NCGTC, after adjusting towards the legal costs incurred
by it for recovery of the amount. The Fund shall appropriate the
same first towards the pending service fee, penal interest, and
other charges due to the Fund, if any, in respect of the credit
facility towards which the amount has been recovered by the Bank,
and the balance, if any, shall be appropriated in such a manner so
that losses on account of deficit in recovery of the credit facility
between NCGTC and the Bank are in the proportion of 75% and
25%, respectively.

25. Scheme Specific 1. The Skill Loans shall be sanctioned in accordance with the
Guidelines Skill Loan Scheme and conduct the account(s) of the
Education loan Scheme: Master Circular 36 | P a g e
 borrower with normal banking prudence and due diligence
2. NCGTC reserves the right to accept or reject any proposal
referred to it by the Bank which otherwise satisfies the
norms of the scheme.
3. Skill Loan eligible shall be eligible under the scheme as on
the material date i.e. the date on which the guarantee fee on
the amount covered in respect of eligible borrower becomes
payable by the Bank to the Trust subject to:
a. There are no overdue in respect of the account and /
or the loan has not been classified as a Non-
Performing Asset (NPA) in the books of the Bank,
and/or
b. The activity of the borrower for which the credit
facility was granted has not ceased; and / or
c. The credit facility has not wholly or partly been
utilized for adjustment of any debts deemed bad or
doubtful of recovery, without obtaining a prior consent
in this regard from NCGTC.
4. Skill Loan not eligible under the scheme:
a. Any Skill Loan in respect of which risks are additionally
covered by Government or by any general insurer or
any other person or association of persons carrying on
the business of insurance, guarantee or indemnity, to
the extent they are so covered.
b. Any Skill Loan, which does not conform to, or is in any
way inconsistent with, the provisions of any law, or
with any directives or instructions issued by the
Central Government or the Reserve Bank of India,
which may, for the time being, be in force.
5. The Bank shall ensure, to the extent applicable, linkage
of every skill loan with Aadhar number and register the
borrower’s/co-borrower’s name with an appropriate
credit information bureau.
6. If a borrower becomes ineligible for being granted Skill Loan
under the scheme, the liability of NCGTC in respect of Skill
Loan granted to him/her by the Bank under the scheme
shall be limited to the liability of the borrower to the Bank as
on the date on which the borrower becomes so ineligible,
subject, however, to the limits on the liability of NCGTC
fixed under this scheme.
26. General Wherever any condition is not mentioned in the scheme, the same
Conditions shall be governed by the existing IBA approved Model Education
Loan Scheme and IBA approved Skill Loan Scheme

Education loan Scheme: Master Circular 37 | P a g e

 FREQUENTLY ASKED QUESTIONS ON EDUCATION LOAN SCHEME (FAQ)

Ques.1. Where the project cost is more than Rs.4.00 Lacs and the applicant requests for
loan up to Rs.4.00 Lacs, for study abroad, and balance amount is to be arranged by
the sponsor.
i. Whether the applicant should be advised to arrange the total margin before
disbursement of the loan or he/she can arrange the margin in stages as per
requirement linked with the disbursement of the loan?

ii. How much margin should be stipulated in loans up to Rs. 4.00 Lacs?

iii. Whether personal guarantee of sponsor should be obtained or not?

Ans.
i. Loans upto Rs.4.00 lacs are to be sanctioned at NIL margin irrespective of the
total cost of the project (i.e. fees boarding / lodging etc.) The branch/Cluster
should satisfy itself regarding the sources of the borrower / co-applicants to
meet the balance amount. A simple letter from the sponsor agreeing to sponsor
the balance cost is not sufficient. The sponsor should be a close relative and
his capacity to meet the balance cost should be supported with requisite
documentary evidence.

ii. For loans up to Rs.4.00 lacs, NIL margin be stipulated as per education loan
scheme.
iii. No third party guarantee should be obtained, for loans up to Rs.4.00 Lacs.

The loan should be released as per the fee structure / schedule of the School /
Institution where the admission is sought. If the first such installment is Rs.4.00
Lacs or less and the loan sanctioned is also up to Rs. 4.00 Lacs, the entire first
installment may be released without insisting for any margin. For loans
sanctioned above Rs.4.00 Lacs, margin be obtained as per the Education Loan
Scheme of the Bank.

However, it is relevant to comply that in case the applicant is requesting lesser

amount of loan as compared to the total cost of education, then the margin
preferably be obtained on upfront basis.

If the sanctioning authority is satisfied with the future source of margin, then
they may consider the acceptance of prorate margin at the time of each
disbursement.

Ques.2 Whether Education Loan for Commercial Pilot Course having duration of less
than one year can be provided or not.

Ans. Duration of Commercial Pilot Course is not specified in the Education Loan
Policy, as such for Education Loan for Commercial Pilot course can be
considered irrespective of the duration, however such a loan would require an
approval from the Head Office (at present) and each case would be considered
on independent merit basis.

Education loan Scheme: Master Circular 38 | P a g e

Ques3. What criteria should be adopted to recognize courses like Nursing, Teacher
Training B.Ed for the purpose of grant of education loan and the fees to be
considered for such courses?
Ans. Teacher Training/ Nursing/B.Ed. courses will be eligible for education loan
provided the training institutions are approved either by the Central Government
or by State Government and such courses should lead to Degree or Diploma
courses and not to Certification course. Fees as approved by the Government /
regulatory bodies will be taken, subject to viability of repayment.

Ques4. Whether Bank is considering education loan to students who have secured
admission under Management Quota for pursuing B.Sc Nursing Courses?
Ans. Yes, Bank is financing such loans subject to condition that the loan amount shall
be equivalent to fees as approved by the Government / regulatory bodies.

Ques5. Can we consider request for education loan in respect of Nursing Colleges
having provisional approval/recognition?
Ans. The Indian Nursing Council gives permission to Nursing Colleges to start new
course for a period of 1 year which is renewed on a yearly basis. The practice of
renewing the permission is done on a year-to-year basis for both the existing
nursing colleges as well as new nursing colleges. Banks could consider
applications from the student borrowers seeking education loan for pursuing
nursing courses in these institutions which are having provisional approval/
recognition.

Ques6. How to deal with requests for sanction of collateral free loans to more than one
student from the same family? Is the collateral free limit of Rs. 4.00 Lacs for a
student or for a family as whole for the purpose of the scheme?
Ans. Repayment of the education loan is based on the future earning potential of the
student. Going by the spirit of the scheme, limit of Rs. 4.00 Lacs collateral free
loan is student specific and not family specific. There is no restriction on giving a
second or third collateral free loan to other siblings when one of the siblings has
already taken a collateral free loan.

Ques7. How to consider request from students who have to stay outside the college
campus due to non-availability of hostel accommodation?
Ans. Banks could consider reasonable lodging & boarding expenses, for the purpose
of fixing loan limit under the scheme, in case the student is not in a position to get
allotment for hostel accommodation within the campus and is required to stay
outside the campus in private accommodation.

Ques8. Whether the repayment period could be extended at the request of the borrower?

Ans. Extension of moratorium period or repayment beyond the time specifies at the
sanction would amount to restructuring of the loan and will be governed by the
RBI guidelines on restructuring of advances. However, in case the student takes
up higher studies immediately upon completion of the course, the
commencement of repayment would get shifted to one year from completion of
the course, whichever is earlier without treating the change as restructuring. This
Education loan Scheme: Master Circular 39 | P a g e
 would be so irrespective of whether the student had taken fresh/top up loan for
higher studies or not.

“If the repayments in education loans are extended due to revision in the
repayment period under the new Model Education Loan Scheme the same may
not be treated as restructuring. However, this treatment would be available only
to education loans which are standard in the books of bank on the date of
such extension of repayment period. Further, such extensions should not
be given by bank with a retrospective effect and any extension in repayment
period should be need based and take into account the repayment capability of
the borrowers.”

Ques9. Whether any incentive is available for girl students?

Ans. Banks provide 0.5% concession in interest rate to girl students pursuing higher
education in India and abroad, subject to minimum of One Year MCLR.

Ques10. Whether request received for sanction of loan to meet partial cost of studying
abroad can be considered?
Ans. It is not uncommon for students to take up part-time jobs as permitted by the
institutions where they are studying to part fund their education. So they will not
be taking loan for meeting entire cost of studies (usually amount mentioned in I-
20). Banks may sanction loan for meeting part cost as requested by students in
such cases.

Ques11. Can the Bank consider request for loan received from NRI?
Ans. Requests received from NRIs can be considered if student is Indian passport
holder and they meet other eligibility requirements. However, it would be
necessary to accept as security any collateral which is enforceable in India.

Ques12. How to consider license courses like Aircraft Maintenance engineering/Pre Sea
training which are neither degree nor diploma, through such courses are
approved by authorities like DGCA without affiliating to any university for award
of degree?
Ans. The Aircraft Maintenance engineering/Pre Sea training courses must be either a
Degree Course recognized by a competent University or Diploma Course
recognized by appropriate State Body to be eligible for loan. The employability of
the students and employment potential of the courses selected has to be
considered while appraising the loan application.
Ques13. Whether Bank can issue Financial Capacity Certificate for submission to Foreign
Universities?
Ans. Yes. However, due diligence is required in issuing financial capacity certificate for
avoiding irregularities in issuing financial capacity certificate for submission to
foreign universities.

Central Vigilance Commission (CVC) vide communication dated 07.11.2013 has

informed about irregularities in issuing financial capacity certificate for
submission to foreign universities.

Education loan Scheme: Master Circular 40 | P a g e

 Loans are granted against third party FDs and further FDs are made in the name
of the intending beneficiary to be able to issue financial capacity certificate. Once
the financial capacity certificate is issued, the FDs are closed prematurely within
a day. All such transactions are carried out through Chartered Accountants and
Travel Agents who work as intermediaries for fees.
Branches should not allow creating FDRs out of overdraft allowed which defeats
the purpose when certificate of financial capacity to support the students study
abroad is being issued. Third party loans against FDRs or certificates being
issued for this purpose are barred as it is nothing but to hoodwink the foreign
universities by dubious Chartered Accountants and Travel Agents for admission
of courses. This not only brings disrepute to our Bank but also image of the
country as well. Indirectly or directly this also results in our youth going abroad
and trying to find work while studying to earn so that they can support their
studies financially. In many cases such students are working illegally which is not
allowed under student visa.

Ques14. What are the guidelines for reversal of interest in case of NPA accounts?
Ans. In case the education loan account becomes non-performing assets (NPA), there
shall not be any reversal of interest accrued during the repayment holiday /
moratorium period.

Education loan Scheme: Master Circular 41 | P a g e

 Annexure-I
LIST OF INSTITUTIONS (CATEGORY-A)
S.
No
. Name of Institution
1 Indian Institute of Management Ahmedabad
2 Indian Institute of Management Bangalore
3 Indian Institute of Management Calcutta
4 Indian Institute of Management Indore
5 Indian Institute of Management Kozhikode
6 Indian Institute of Management Lucknow
7 Symbiosis Centre For Management & HRD (SCMHRD), Pune
8 Symbiosis Institute of Business Management (SIBM), Pune
9 Indian Institute of Technology Delhi
10 Indian Institute of Technology Kanpur
11 Indian Institute of Technology Kharagpur
12 Indian Institute of Technology Madras
13 Indian Institute of Technology Mumbai
14 Indian Institute of Technology Roorkee
15 Indian Institute of Technology(IIT), Patna
16 Indian School of Business(ISB), Hyderabad
17 Xavier Labour Relations Institute (XLRI), Jamshedpur
18 Birla Institute of Technology & Sciences(BITS) - Pilani
19 Indian School of Mining – Dhanbad
20 Indian Institute of Science (IISC), Bangalore
21 Management Development Institute (MDI), Gurgaon
22 Institute of Management Technology- Ghaziabad
23 Indian Institute of Foreign Trade (IIFT), Delhi
24 Narsee Monjee Institute of Management Studies (NMIMS), Mumbai
25 Xavier Institute of Management (XIM), Bhubaneswar
26 Faculty of Management Studies (FMS), Delhi
27 Indian Institute of Forest Management (IIFM), Bhopal
28 National Institute of Fashion Technology (NIFT), New Delhi
29 Jamnalal Bajaj Institute of Management Studies (JBIMS), Mumbai
30 Mudra Institute of Communication (MICA), Ahmedabad

Education loan Scheme: Master Circular 42 | P a g e

 31 Tata Institute of Social Sciences (TISS), Mumbai
32 S P Jain Institute of Management and Research (SPJIMR), Mumbai
33 Institute of Rural Management, Anand
34 Indian Institute of Technology (IIT), Varanasi
35 Delhi College of Engineering(DCE), Delhi
36 Netaji Subash Institute Of Technology (NSIT), Delhi
37 National Law School of India University, Bangalore (NLSIU)
38 National Academy of Legal Study and Research University of Law, Hyderabad (NALSAR)
39 The National Law Institute University, Bhopal(NLIU)
40 The West Bengal National University of Juridical Sciences, Kolkata (WBNUJS)
41 Indian Institute of Information Technology(IIIT), Hyderabad
42 Indian Institute of Technology (IIT), Hyderabad
43 Sri Ramachandra Medical College and Research Institute (SRMC & RI), now named Sri
Ramachandra University (SRU) , Chennai for following courses:
 MBBS Bachelor of Medicine and Bachelor of Surgery – 4 yrs + 1yr internship,
 Higher Specialty Courses i.e., D.M. and M.Ch. in various medical fields – 3 yrs,
 Post Graduate degree courses in Basic Medical Sciences/ Clinical Courses i.e.,
M.D. and M.S. in various medical fields.
 Bachelor of Dental Surgeon (BDS)
 Master of Dental Surgeon (MDS)
 Paramedical Courses (Upto Rs. 7.50 lacs)

LIST OF INSTITUTIONS (CATEGORY-B)

S.No. Name of Institution
1 Indian Institute of Foreign Trade (IIFT), Kolkata Campus
2 Marine Engineering & Research Institute, Kolkata
3 Indian Institute of Management Lucknow- Noida Campus
4 Indian Institute of Management Shillong
5 ICFAI Business School -Hyderabad
6 LN Welingkar Institute of Management, Mumbai
7 LBSIM, Delhi
8 Birla Institute of Technology, Mesra
9 IMI, New Delhi
10 FORE School of Management, Delhi
11 Goa Institute of Management, Goa
T. A. Pai Management Institute (TAPMI), Manipal [Post Graduate Diploma in
12 Management]
13 IIT-SJSOM, Mumbai
AMITY Group of Institutes (Institutions promoted by Ritanand Balved Education
14 Foundations (RBEF) (Amity Universe), NOIDA,UP)
15 Department of Management Studies, IIT, Delhi
Education loan Scheme: Master Circular 43 | P a g e
 16 Department of Industrial & Management Engineering, IIT, Kanpur
17 Nirma Institute of Management, Ahmedabad
18 Institute of Management Technology- Nagpur
19 Institute of Management Technology- Hyderabad
20 Institute of Management Technology- Dubai
21 National Institute of Design (NID), Ahmedabad
22 National Institute of Industrial Engineering (NITIE), Mumbai
23 Dr. B R Ambedkar National Institute of Technology (NIT), Jalandhar
24 Malaviya National Institute of Technology (NIT), Jaipur
25 Maulana Azad National Institute of Technology (NIT), Bhopal
26 Motilal Nehru National Institute of Technology (NIT), Allahabad
27 National Institute of Technology (NIT), Agartala
28 National Institute of Technology (NIT), Calicut
29 National Institute of Technology (NIT), Durgapur
30 National Institute of Technology (NIT), Hamirpur, Himachal Pradesh
31 National Institute of Technology (NIT), Jamshedpur
32 National Institute of Technology (NIT), Kurukshetra
33 National Institute of Technology (NIT), Patna
34 National Institute of Technology (NIT), Raipur
35 National Institute of Technology (NIT), Rourkela
36 National Institute of Technology (NIT), Silchar
37 National Institute of Technology (NIT), Srinagar
38 National Institute of Technology (NIT), Surathkal
39 National Institute of Technology (NIT), Tiruchirapalli
40 National Institute of Technology (NIT), Warangal
41 Sardar Vallabh Bhai National Institute of Technology (NIT), Surat
42 Visvesvaraya National Institute of Technology (NIT), Nagpur
43 Indian Institute of Technology Guwahati
44 Indian School of Business(ISB)-Mohali Campus
45 BITS (Pilani) Goa Campus
46 BITS (Pilani) Hyderabad Campus
47 S.P. Jain Centre of Management, Dubai/ Singapore
48 S.P. Jain Institute of Management, Singapore & Sydney (GBBA)
National Institute of Fashion Technology (NIFT), Campuses: Bengaluru, Mumbai &
49 Chennai
50 Indian Institute of Management Indore- Mumbai Campus
51 Indian Institute of Technology (IIT), Gandhinagar
52 Indian Institute of Technology (IIT), Ropar
53 Indian Institute of Management (IIM), Shillong
54 National Law University, Jodhpur (NLUJ)
55 Hidayatullah National Law University, Raipur (HNLU)
56 Gujarat National Law University, Gandhinagar (GNLU)
Education loan Scheme: Master Circular 44 | P a g e
 57 Dr. Ram Manohar Lohiya National Law University, Lucknow (RMLNLU)
58 Rajiv Gandhi National University of Law, Punjab (RGNUL)
59 Chanakya National Law University, Patna (CNLU)
60 The National University of Advanced Legal Studies, Kochi (NUALS)
61 National Law University Odisha, Cuttack (NLUO)
62 National University of Study and Research in Law, Ranchi (NUSRL)
63 National Law University and Judicial Academy, Assam (NLUJAA)
64 Damodaram Sanjivayya National Law University, Visakhapatnam (DSNLU)
65 Tamil Nadu National Law School, Tiruchirappalli (TNNLS)
66 Maharashtra National Law University, Mumbai (MNLU)
67 Indian Institute of Management(IIM), Raipur
68 Indian Institute of Management(IIM), Rohtak
69 Indian Institute of Management(IIM), Trichy
70 Indian Institute of Information Technology(IIIT), Allahabad
Vellore Institute of Technology, Vellore Campus (for the courses Computer
Science & Engineering, Information Technology, Electrical & Electronics
71 Communication)
72 S P Jain School of Global Management
73 Indian Institute of Management(IIM), Kashipur

Annexure-II
List of Approved Education Institutions

S.No Name of the Institutions Courses Approved

1 Dhirubhai Ambani Insitute of Diploma in Information & Communication
Information & Communication, Technology
Gandhi Nagar, Ahmedabad
2 Symbiosis Centre for Management & All courses
Human Resource Development,
Pune
3 Ansal Institute of Technology, Sector All courses
55, Gurgaon
4 Indian Institute of Planning & All courses
Management, Qutab Institutional
area, New Delhi – 110 016. All
Centres
5 Modi Apollo International Institute, All courses
24A, Lajpat Nagar – IV, New Delhi –
110 024
6 WLC College, India Ltd. All courses
7 ICFAI Business School (IBS). All courses
All the Institutes of the Group.
8 Pandit Deendyal Petroleum All courses
University (PDPU) (GERMI) run by
IPM, Gandhinagar & IPT,
Gandhinagar.
Education loan Scheme: Master Circular 45 | P a g e
9 S.P. Jain Centre of Management, (i) Global MBA / BBA Programme
Dubai/ Singapore. (ii) Product Marketing & Management
(iii)Banking Management
10 S.P. Jain Institute of Management (i) Executive MBA course for general
(Mumbai) students
(ii) MBA course for Working Executives
(regular)
(iii) Post Graduate IT course called MIT
(Masters in Information Technology)
11 S.P. Jain Institute of Management All courses
(GBBA)
12 Narsee Monjee Institute Of All courses
Management and Higher Studies
(NMIMS)
13 University of Petroleum & Energy (i) MBA (ii) M.Tech.
Studies. Dehradun (iii) BBA (iv) B.Sc.
(v) B.Tech and all the other courses
approved by UGC
14 Modi Institute of Technology & (i) Computer Science and Engineering
Science, Laxmangarh (ii)Electronics and Communication
Engineering
(iii) Information Technology
(iv) Master of Computer Science
(v) M.Tech. in Computer Science (v) MBA
15 NIIT Diploma in IT, Honors Diploma in IT, ANIIT,
GNIIT & Post Graduate certification
programme in Business Analytics (PGCBA)
16 LBIIHM - Pitampura (i) Degree Courses recognized by
UGC/HRD Ministry
(ii) Bachelor in Hotel Management &
Tourism (IASE)
(iii) B.Sc./M.Sc. In Hotel Management,
Catering Technology & Tourism (PTU)
17 Dayand Sagar Institution All courses
18 Institute of Management Studies, All courses
Dehradun (Its Group Institutes)
19 Asian School of Media Studies (i) M.Sc. in Mass Communication, Adv. &
Journalism + PG Diploma
(ii) B.Sc. in Mass Communication, Adv. &
Journalism + Graduate Diploma
(iii) B.Sc./ M.Sc. In Multimedia Technologies
(iv) BBA
(v) MBA
Other Diploma Courses conducted by the
Institute are not allowed
20 Times Business School, New Delhi 1. MBA ( 2 years)
2. Integrated MBA (4½ Years)
3. BBA (3 years)
4. BJMC ( 3 years)
5. PG Diploma in Finance (11 months)
Education loan Scheme: Master Circular 46 | P a g e
 6. PG Diploma in Human Resources (11
months)
7. PG Diploma in Marketing & Sales (11
months)
8. PG Diploma in Media & Communication
(11 months)
9. PG Diploma in Advertising & PR (11
months)
21 NIIT Imperia All Courses
22 Asian Business School All Courses

Annexure-III
List of Top 100 Foreign Institutions

S.No. Foreign Institutions

1 California Institute of Technology Caltech
2 Harvard University
3 University of Oxford
4 Stanford University
5 University of Cambridge
6 Massachusetts Institute of Technology
7 Princeton University
8 University of California Berkeley
9 Imperial College London
10 Yale University
11 University of Chicago
12 University of California Los Angeles UCLA
13 Swiss Federal Institute of Technology Zurich
14 Columbia University New York
15 Johns Hopkins University
16 University of Pennsylvania
17 University of Michigan
18 Duke University
19 Cornell University
20 University of Toronto
21 University College London
22 Northwestern University
23 University of Tokyo
24 Carnegie Mellon University
25 National University of Singapore
26 University of Washington
27 Georgia Institute of Technology
28 University of Texas Austin
29 University of Illinois Urbana Champaign
30 Ludwig Maximilians Universität München
31 University of Wisconsin Madison
32 University of British Columbia
33 University of Melbourne
34 École Polytechnique Fédérale de Lausanne
35 London School of Economics and Political Science
36 University of Edinburgh
37 University of California Santa Barbara

Education loan Scheme: Master Circular 47 | P a g e

38 New York University
39 McGill University
40 King's College London
41 University of California San Diego
42 Washington University Saint Louis
43 University of Hong Kong
44 Karolinska Institute
45 Australian National University
46 University of Minnesota
47 University of North Carolina Chapel Hill
48 Peking University
49 Tsinghua University China
50 Seoul National University
51 Hong Kong University of Science & Technology
52 Korea Advanced Institute of Science & Technology KAIST
53 University of Manchester
54 Brown University
55 University of California Davis
56 Catholic University of Leuven
57 Boston University
58 Pennsylvania State University
59 Kyoto University
60 University of Sydney
61 École Polytechnique
62 Nanyang Technological University
63 Scuola Normale Superiore di Pisa
64 Leiden University
65 University of Queensland
66 Pohang University of Science & Technology
67 University of Göttingen
68 Ohio State University
69 Rice University
70 Universität Heidelberg
71 Delft University of Technology TU Delft
72 Erasmus University Rotterdam
73 Wageningen University and Research Centre
74 University of Bristol
75 University of Basel
76 University of Southern California
77 University of Amsterdam / Universiteit van Amsterdam
78 Utrecht University / Universiteit Utrecht
79 Humboldt Universität zu Berlin
80 Freie Universität Berlin
81 Michigan State University
82 Durham University
83 Monash University
84 University of Arizona
85 University of Notre Dame
86 University of California Irvine
87 Tufts University
88 Ghent University / Universiteit Gent
89 University of Massachusetts Amherst
90 University of Pittsburgh
Education loan Scheme: Master Circular 48 | P a g e
91 Emory University
92 University of Glasgow
93 McMaster University
94 Vanderbilt University
95 University of Colorado Boulder
96 Technische Universität München
97 Uppsala University
98 Stockholm University
99 Maastricht University
100 Purdue University

Education loan Scheme: Master Circular 49 | P a g e

 Annexure-IV

In-Principle Letter
(On Bank’s Letter Head)
Model In-Principle Education Loan Sanction Letter

Date:

(Name & Address

of the Prospective

Education Loan Borrower)

Reg: In-principle sanction letter for prospective Education Loan

Dear Sir/ Madam,

Heartiest Congratulations on your successful admission to _____________ course offered by

___________ (Name of Institute) and wish you all the success.

Based on the offer letter issued by the institute confirming your admission, we offer in-principle
sanction letter for education loan on normal terms & conditions of our Education Loan scheme.
However, it may be noted that the regular sanction shall be subject to submission of complete
loan application along-with duly authenticated required documents & our formal sanction. The
issuance of this letter may not be treated as binding upon the Bank and, “the Bank reserves the
right to sanction or reject any loan proposal on merits of the case.”

We await your formal loan application for our consideration.

With regards,

Sincerely yours

Branch Manager/Cluster Head

Education loan Scheme: Master Circular 50 | P a g e

 Annexure-V

_______________________ Branch office/Cluster Ofifce:

________________

Note: Model Draft of Education Loan Process Note to be amended as per the requirement

FOR APPROVAL
Date of receipt of proposal at the branch
Date of submission of proposal to Cluster Office
Date of submission of proposal to Corporate Office
Date of raising query, if any, by the Corporate Office
Date of receipt of the query

Name of Borrower (s)

Cluster / CMO
Memorandum for
Deviation, if any
Concession, if any

1. BORROWER’S PROFILE
Name of Borrower (s)
Address
Asset Classification

Line of activity

Credit Rating

CIBIL Report (Transunion &

Personal)

Date of last sanction/review

& Authority

Date of review/renewal

Dealing with the bank since

2. DETAILS OF FACILITIES:-
(Amt. in Lacs)
Nature of facility Existing O/S Proposed ROI Margin
Limit

Grand Total
Education loan Scheme: Master Circular 51 | P a g e
 3. PRESENT PROPOSAL IN BRIEF:-

4. Value of A/C:-

5. CREDIT FACILITIES SANCTIONED BY OUR BANK TO INDIVIDUAL/GROUP

CONCERN :-

6. MARGIN:-

7. RATE OF INTEREST:-

8. MORATORIUM PERIOD & REPAYMENT:-

9. FUTURE PLACEMENT AND EXPECTED INCOME:-

10. INCOME AND REPAYMENT ASPECT OF LOAN:-

11. DISBURSEMENT:-

12. BANKS POLICY:-

13. ANY CONCESSION/RELIEF BY WAY OF MARGIN / COMMISSION / INTEREST:-

14. DETAILS OF SECURITIES OFFERED AND THEIR VALUE:-

a. Title Clearance Report:
b. Valuation report
15. PRE SANCTION VISIT REPORT

16. RECOMMENDATIONS:-

Terms of Sanction:-

Nature of facility Education Loan - For Study in India / Abroad

Classification of Priority / Non priority sector
advance
Amount ` _________________ (Rupees ________________ only)
Purpose Pursuing __________ years ___________________(name
of the course).
Cost of study ` ____________ (Total Cost)
Margin
Rate of interest One Year MCLR+ _______% i.e. _________% p.a.
 The interest shall be levied on monthly simple basis, only
during the moratorium period (Study + Grace Period).

 Interest to be charged on monthly compounding basis

Education loan Scheme: Master Circular 52 | P a g e
 after the moratorium period (Study + Grace Period), the
interest shall be charged on compounding basis.
 1% concession in interest rate may be provided for
moratorium period, in case the accrued monthly interest
is served regularly on monthly basis.

Penal interest at the rate of 2.00% shall be charged on
irregular amount and for the period of irregularity.
Intimation of change in The borrower shall be deemed to have notice of changes in
Interest Rate:- the rate of interest whenever there are changes in MCLR
either increase or decrease in interest rates. By display of
MCLR on the Notice Board of the Branch or published in
news papers or made through entries of the interest rate
charged in the passbook/statement of account furnished to
the borrower and the borrower is liable to pay such revised
rate of interest.
Tenor of Course
Repayment
i. Total Repayment i. In ________ equal monthly installments (including
Period moratorium period).

ii. Moratorium ii. ______________________ (study +grace period)

Period.
iii. The accrued monthly interest of existing and
iii. Repayment of proposed loan shall be recovered on monthly
Interest basis.

Process /Upfront fee Rs _______/- plus service tax, if any.

Disbursement Loan shall be disbursed in stages as per requirement /
demand directly to the institutions / vendors of books /
equipments / instruments etc. to the extent possible.

However, the receipts from the institution for the amount

paid as per the disbursed amount be submitted.
Prepayment penalty NIL
General Terms & Conditions of Sanction including Security, Undertakings and
specific riders for education loan will be as mentioned in Sanction Letter (Model
Draft)
Submitted for approval Please

Education loan Scheme: Master Circular 53 | P a g e

 Annexure-VI

_______________________ Branch office/Cluster Office:

________________

Note: Model Draft of Education letter sanction letter to be amended as per the
requirement.

Ref No: Date:

________________ (Borrower)
________________
________________ (Address)

Dear Sir,

Education Loan A/c - __________________________________ (Borrower’s Name)

In reference to your loan application dated: ________, We are pleased to communicate

our sanction with attached detailed terms and conditions.

You are requested to go through the terms & conditions of sanction and one copy of the
same be signed and returned to us as an acceptance of the terms & conditions of
sanction.

The credit facilities shall be released on compliance of following:

1. Complying with all the terms & conditions of sanction.

2. Executing proper loaning documents as prescribed.
3. Creating effective charge on all the securities in favour of the bank as per the
terms of sanction.
4. Creation of a valid registered/equitable mortgage over the property proposed to
be mortgaged in the account.

In case any clarification is needed, the matter be bought to under signatory.

Yours faithfully,

Branch Incumbent/Cluster Head

Branch /Cluster Office ____________

Education loan Scheme: Master Circular 54 | P a g e

 ORIENTAL BANK OF COMMERCE

Branch/Cluster Office _______________

TERMS & CONDITIONS OF SANCTION Date: ________

Name of Borrower
Branch/Cluster/CMO
Date of sanction

Nature of facility Education Loan - For Study in India / Abroad

Classification of Priority / Non priority sector
advance
Amount ` _________________ (Rupees ________________ only)
Purpose Pursuing __________ years ___________________(name of the
course).
Cost of study ` ____________ (Total Cost)
Margin
Rate of interest MCLR + _______% i.e. _________% p.a.

The interest shall be levied on monthly simple basis, only during the
moratorium period (Study + Grace Period).

Interest to be charged on monthly compounding basis after the

moratorium period (Study + Grace Period), the interest shall be
charged on compounding basis.

1% concession in interest rate may be provided for moratorium

period, in case the accrued monthly interest is served regularly.

Penal interest at the rate of 2.00% shall be charged on irregular

amount and for the period of irregularity.
Intimation of change in Interest Rate:-

The borrower shall be deemed to have notice of changes in the rate

of interest whenever there are changes in MCLR Rate either
increase or decrease in the interest. By display of MCLR Rate on
the Website of the bank or published in news paper of made
through entries of the interest rate charged in the passbook,
statement of account furnished to the borrower and borrower is
liable to pay such revised rate of interest.

In addition, Bank shall have a right to change the spread

(above MCLR) on reset date.
Tenor Of Course
Repayment

Education loan Scheme: Master Circular 55 | P a g e

 i. Total Repayment i. In ________ equal monthly installments (including
Period moratorium period).

ii. Moratorium ii. ______________________ (study +grace period)

Period.
iii. The accrued monthly interest of existing and proposed loan
iii. Repayment of shall be recovered on monthly basis.
Interest

Process /Upfront fee ` _______/- plus service tax, if any.

Disbursement Loan shall be disbursed in stages as per requirement / demand
directly to the institutions / vendors of books / equipments /
instruments etc. to the extent possible.

However, the receipts from the institution for the amount paid as per
the disbursed amount be submitted.
Prepayment penalty NIL

GENERAL TERMS & CONDITIONS OF SANCTION:-

1. a) The above loan shall be collaterally secured by the following Security;

Registered / equitable mortgage of __________________________standing in

the name of __________________________ having a market value of Rs.
________ and realizable value of `__________ as per valuation dated
______________

The borrower/ co-obligant / guarantor will extend their co operation and provide
with full details of their moveable/immoveable assets and liabilities for preparing
their revised credit report.

The properties obtained as mortgage in the account shall be adequately insured

with the agreed Bank clause. The cost shall be borne by yourself.

b) Assignment of future income of the student on getting employment after

completion of the course for payment of installment. An appropriate affidavit to
this effect be obtained from all joint borrowers.

2. The Terms of sanction shall remain valid for 6 months. Please avail sanction limit
within the prescribed period after executing documents etc.

3. Branch/Cluster Official be permitted to visit the property to assess the real

value of property before release of loan.

4. Facility shall be released after vetting of documents including mortgage

documents,where applicable .

5. Advance/Facility sanctioned, shall be used for the specific purpose for which it is
sanctioned and not for any other purpose.

Education loan Scheme: Master Circular 56 | P a g e

 6. In case of cost overrun in the studies, the borrower shall arrange funds from its
own sources to meet the shortfall.

7. A joint either or survivor SAVINGS ACCOUNT in the name of the borrower/co-

borrower be opened.

8. The borrower shall deposit the fee paid receipts issued by the institution for the
amount disbursed at regular intervals.

9. All photocopies of papers submitted by the borrower for the purpose of the loan
should be authenticated by a duly authorized official of the borrower and should
be verified by branch/cluster.

10. Undertakings as per ANNEXURE ‘A’ shall be provided.

11. All other terms and conditions applicable to Education Loan as per ANNEXURE
‘B’ shall be strictly complied with.

Branch Manager/Cluster Head

Branch Office/Cluster Office____________

Education loan Scheme: Master Circular 57 | P a g e

 Annexure-“A”

UNDERTAKINGS

A. An undertaking shall be obtained from the mortgager that no dues of tax are
outstanding against them and all required Statutory and/or Regulatory permissions or
guidelines as are applicable in context to their immoveable properties, from local or
other competent authorities have been obtained.

Not to create any further charge, lien or encumbrance over the assets and properties of
the company to be charged to the bank in favour of any other bank, financial institution,
Company, firm or person.

B. The borrowers/co-borrowers shall undertake as under:

1. That the names of Borrower, or its Directors/ Guarantors do not figure in any
list of defaulters circulated by RBI or any Bank and Financial Institution nor the
names of partners/directors appear in caution list issued by RBI/ECGC/DGFT
etc.
2. That to issue appropriate undertaking /affidavits/ certificates as the Bank may
require from time to time certifying that the funds comprising of entire amount
of loan/ facility/sum due/ amount outstanding in the account have been used
exclusively for the purpose for which they were obtained and the same have
not been diverted / siphoned and no misrepresentation has been caused of
any kind or accounts falsified/any fraudulent transaction have been carried out
etc.
3. That to keep the Bank informed of the happening of any event likely to have a
substantial effect on their income.
4. That as per HO Circular HO/R&L/14/2001-2002/355 dated 09-02-2002 issued
by Recovery & Law department an AFFIDAVIT and UNDERTAKING about the
names, age and address of the legal heirs of the borrowers/
obligants/guarantors be recorded and upgraded from time to time so as to
ensure that in the event of the death of the obligant /defendant during litigation,
no time is lost in bringing on record the legal heirs of the deceased.
5. That no loan has been taken for this purpose from any bank/financial
institution.
6. That the borrower will submit performance report from his education institution
at regular intervals.

Annexure-“B”

SPECIFIC RIDERS FOR EDUCATION LOAN

1. The student is expected to take up his studies seriously and shall work hard and try
her best to maintain a good academic record and shall intimate to the Bank the result
of periodical tests/examinations conducted by the institution. The student shall not
participate in any unlawful activity which will debar him from pursuing his studies and
shall follow all the rules and regulations in force and maintain such dignity and
decorum as is expected of the student by the institution. If the performance of the
student is not satisfactory or if any adverse report in respect of the progress/conduct
Education loan Scheme: Master Circular 58 | P a g e
 of the student comes to Bank’s knowledge, the Bank will be at liberty to recall the
loan amount and the student and/or the guardian shall be liable to repay immediately
the outstanding dues together with interest and other costs.

2. The student shall not without the prior consent of the Bank change the course of his
studies, place of study or the institution as stated in his application.

3. The student shall during the currency of the loan deep the Bank informed from time
to time of any change of address on account of his being on vacation, study leave,
study tour or his being required to stay away from the station.

4. After completion of the course of her studies, it will be the responsibility of the student
to secure gainful employment and immediately upon securing such employment,
inform the Bank accordingly giving full particulars of such employment and the
income there from.

5. In case the student has undertaken higher studies in India and intends to go abroad
for further studies or for taking up a job, he shall intimate to the Bank immediately
and thereupon the Bank may decide whether the loan has to be repaid in full before
the student leaves the country or whether to allow the loan to be continued on
revised terms and conditions.

6. The student shall not enter into any pecuniary obligation or financial liability during
the currency of the loan without the prior permission of the Bank.

7. The student is ordinarily not expected to take up employment during the course of his
studies without the prior permission of the Bank. Where, however, he wishes to take
up a job during the course of his studies, he should produce a certificate from the
institution that such employment will not interfere with his studies. Full particulars
about the nature of the employment, the working hours salary and other relevant
matters should be advised to the Bank immediately. Upon receiving such intimation,
the Bank may consider whether to continue the loan arrangement and, if so, to what
extent thereof.

Education loan Scheme: Master Circular 59 | P a g e

 Annexure- VII
ORIENTAL BANK OF COMMERCE

CLUSTER MONITORING OFFICE_____________________

Recommendations for approval of the Educational Institution not formally approved by

AICTE / Govt. of India / Indian Universities / State Govt. and the Courses conducted
therein for granting of Education Loan to the students applying for such courses in such
institutions

Full name of the educational

institution

Constitution of the educational

institution

Founded in the year

Names of founders / promoters of

the educational institution

Past experience of the promoters in

the education line

Any particular group of which it

belongs

Year in which the studies for the

courses has first commenced
Whether applied for affiliation to
AICTE or any other University or
Government Body? If so, give
details.

Whether the institution is a

franchisee of any other institution?
If so, give details.

Whether affiliated to any foreign

university or body? If so, give
details.
Names of the Management Team /
Board of Trustees / Board of
Directors.

Education loan Scheme: Master Circular 60 | P a g e

 Details of the Courses offered by the Institution

Particulars Course - Course - Course - Remarks

I II III
Name of the course
Name of the qualification, which
the Course will lead to
Total duration of the course
Whether course is full time or
part time?
Annual fees payable for the
Course under all heads
Fees payable for the full
duration of the course
Admission process followed
Whether it is distance learning
or oral coaching?

Details of Infrastructural Facilities available with the Institution

Land & Building

Hostel Facilities
Laboratory Facilities
Computer Facilities
Whether the land is owned by
the Educational Institution?
Whether all infrastructural
facilities are available
Any infrastructural facilities are
yet to be completed or provided

Financial resources of the Institution

Whether any aid or grant is

available to the institution?

What are the sources of finance

for running the institution?
Whether the institution is
financially self sustaining?

Education loan Scheme: Master Circular 61 | P a g e

Recommendations

Placement track record of the institution

1. Name of the companies
where placement has been
made

2. Average package range From Rs.______________

To Rs.________________

3. Percentage & number of

students got campus
placement in last 2 years
Recognition from trade &
industry

Local reputation of the

institution based on feed-
back from intellectuals /
professionals

Whether adequate, qualified

and professional faculty
available?

We recommend for placing the above Educational Institution on the approved list of
Educations Institutions of our Bank for the following courses conducted therein for grant
of Education Loan to the Students applying for such courses in the institution.

Name of the Course(s):

1.

2.

3.

4.

Signature of Cluster Monitoring Head

Education loan Scheme: Master Circular 62 | P a g e

 Annexure-VIII

List of Documents/ Information to be provided by the applicant along with Loan

Application Form
(These documents are indicative, relevant documents be obtained on case to case
basis)
1 1. Proof of Identity and address (PAN Card, Driving License/Voter ID Card, Passport,
Ration Card etc.) Any two documents may be obtained.
2. Proof of age of the applicant should also be obtained
3. Aadhar Card is mandatory to be obtained
2 Passport size photographs of applicant/parents/co-obligants/ Guarantor.
3 ITR/Form-16, Proof of income of parents/co-obligants
4 Bank Statement of account for the last six months.
5 Matriculation or Higher Secondary or Senior School Board Certificate / Marks Sheet /
Degree (last exam passed).
6 Admission Letter / Slip issued by the Institution in India or Abroad giving complete
details of Fee/Charges.
7 Receipt of Fees, if any.
8 Details of Scholarship available, if any.
9 Brochure issued by the institution giving information about recognition of the course by
appropriate authority/university.
10 Declaration/Affidavit (duly notarized) that no loan has been taken for this purpose from
other financial institutions/Banks.
11 Passport /Visa in case of Students going abroad and Permission for release of Foreign
Exchange wherever required.
12 Documents/ proof of Movable collateral security like FDR/NSC/LIP, wherever required in
case of Loans exceeding Rs.7.50 Lac.
13 Details of collateral securities offered along with proof of ownership with complete chain
of Title deeds, latest House Tax Receipt, Non-encumbrance Certificate, Latest Search
Fee Receipt, from advocate on panel of the bank, Income Tax and Other Statutory dues
clearance certificates. , in case of Loans exceeding Rs.7.50 Lac.
14 Salary certificate along with deductions duly certified by employer in case of working
professionals/Defense Personnel seeking assistance for part-time courses
15 In case of Loan to working executive, Letter of authority duly confirmed by the employer
for deduction of monthly installment from salary OR ECS/NACH debit Mandate/Standing
Instruction be obtained.
16 CIBIL Report
Note: All the documents mentioned above shall be self attested.
Credit Risk Rating to be done as per Credit Risk Rating Model for Retail Loans and
Credit Risk Scoring Sheet to be attached with the Process Note

Education loan Scheme: Master Circular 63 | P a g e

 Annexure-IX

LIST OF LOANING DOCUMENTS TO BE OBTAINED BEFORE DISBURSEMENT OF LOAN

1. Education Loan Agreement – DOC. 30.
2. Agreement of Guarantee- DOC. 11 wherever required.
3. Common Agreement DOC – 38
4. Affidavit/undertaking as per Bank’s format
5. Receipt of Fees duly verified by the Student.
6. Appropriate documents like Memorandum of deposit of title deed / Mortgage
deed along with Original title deed(s) for creating charge over the property in
favour of our Bank depending upon the nature of charge in case of Loans
exceeding Rs.7.50 Lac, unless otherwise specifically exempted by the
Competent Authority. NEC / Valuation Certificate of the property from the
advocate/valuer on panel of the bank
7. Names of Legal heirs of borrower(s) and guarantor (s) on Affidavit duly
notarized.
8. CIBIL Report
9. Credit Rating Report

Education loan Scheme: Master Circular 64 | P a g e

 Annexure X

Bank Guarantee Bond

1. In consideration of the ____________________(hereinafter called “College”) having

agreed to provide admission in ______Course to Mr/Ms.
________D/O/S/O____________(hereinafter called “the said student”) a Bank
Guarantee for performance of payment of the annual fees for remaining years of course
payable by the said student is required.

2. We _______________ (indicate the name and Branch of the bank) (hereinafter

referred as the “Bank”) at the request of Mr./Ms.__________(the said student) do
hereby undertake to pay the college the amount not exceeding __________against
dues of annual fees payable to the college by the said student for remaining years for
above mentioned course under the following conditions:

(a) When student fails to deposit the regular annual fees in the time frame before last
date of payment prescribed by the _______(name of the college) as detailed below:

Fees for Due Date last date for payment Amount

Ist Year/ dd/mm/yyyy dd/mm/yy

Ist sem

(b) When student has discontinued and not pursuing his studies due to any reason
whatsoever the entire fee for remaining years will be payable to ____(Name of the
college)

(c) When the student has been rusticated due to misconduct or any disciplinary action
or criminal act on his part, the entire fess for remaining years will be payable to
__________(name of the college)

3. We, the____________( indicate the name and Branch of the bank) hereby
undertake to pay the amount due and payable under this guarantee without any demur,
merely on a demand from the college stating that _______ amount is due on account of
non- payment of annual fees payable to the college by the said student______. Any
such demand made by the college on the Bank in terms of this Bank Guarantee shall be
conclusive as regards to the amount due and payable by the Bank to the college under
this guarantee. However, our liability under this guarantee shall be restricted to an
amount not exceeding Rs. ________.
4. We undertake to pay to the ____________(college) any money so demanded
notwithstanding any dispute or disputes raised by the student in any suit or proceeding
pending before any Court or Tribunal thereto our liability under this present bank
Education loan Scheme: Master Circular 65 | P a g e
guarantee being absolute and unequivocal. The payment so made by us for payment
hereunder and the student shall have no claim against us for making such payment.

5. We _________________________(indicate the name and Branch of the bank)

further agree that the guarantee herein contained shall remain in full force and effect
during the period that would be taken for the performance of the said admission and
that it shall continue to be enforceable till all the dues of the college under or by virtue of
the said Admission have been fully paid and its claims satisfied or discharged or till
validity of Bank Guarantee and the college certifies that the terms and conditions of the
said Admission have been fully and properly carried out by the said student and
accordingly discharges this guarantee.

6. The Bank Guarantee shall remain in force up to -------------(Date of Expiry),unless a

claim is lodged with the bank on or before the said date i.e.----------, this guarantee shall
be forfeited and the Bank shall be relieved and discharged for all liabilities there under.

7. This guarantee will not be discharged due to the change in the constitution of the
Bank.

(i) Lastly, we the Oriental Bank of Commerce ---------------(Name & Branch of Bank)
undertake not to revoke this guarantee during its currency except with the previous
consent of the college in writing.

8. Notwithstanding anything contained herein;

a) Our liability under this Bank Guarantee shall not exceed

Rs.__________(Rupees___________________________________

b) This Bank Guarantee shall be valid upto ---------------------

c) We are liable to pay the guaranteed amount or any part thereof under this
Bank Guarantee only and only if you serve upon us a written claim or demand
on or before__________________ (date of expiry of Bank Guarantee.

For Oriental Bank of Commerce

1. Authorized Signatory

2. Authorized Signatory Dated the ___ day of ____

Education loan Scheme: Master Circular 66 | P a g e

 Annexure XI

ORIENTAL BANK OF COMMERCE

APPLICATION FORM FOR ORIENTAL SKILL LOAN SCHEME

(Note Please read through the application form carefully before filling in)

1. Student's Name in Full (beginning with

Surname)___________________________________________
2. Date of Birth__________________ Age
________________Nationality_________________________
3. Aadhar No. (If Available)
_____________________________________________________________
4. What is the Student doing at
present?____________________________________________________
5. Particulars of the Course
Applied________________________________________________________
6. Minimum Eligibility of Course
__________________________________________________________
7. Student Information

a) Academic Qualification
b) Is the applicant attending any other school/ college
or Institute at present? If so, furnish full particulars.
c) Whether the student has any working experience? If
yes, please give details.
d) Whether the student will take up any part-time
employment during study? If yes, please give details.

8. Particulars of Course

Sl. Particulars Details

a) Proposed
. Skill course

b) Duration of Course (in Months)

c) Whether Full Time or Part Time course

d) Name and address of the training institute in which

the student intends to join.

Education loan Scheme: Master Circular 67 | P a g e

 e) Affiliation of approved the course Please choose and specify the selected
a) School affiliation of the course.
b) University/College
c) ITI/Polytechnic
d) NSDC approved training partner
e) SSC training partner
f) Affiliated to Central Government Body
g) Affiliated to State Government Body
h) Other (Please Specify)
f) Has the student been admitted into the above training
institute or accepted for the Course? If so, certified
copy of admission/ acceptance Letter should be
attached

9. Details of fee requirement

a) Tuition Fee of the course: _______________________________________________________
b) Hostel , Mess expenses: ________________________________________________________
c) Essential Books, stationery and equipment _________________________________________
d) Any other expenses____________________________________________________________
e) Total Fee ____________________________________________________________________
f) Fee already paid by student______________________________________________________
g) Net required Loan Amount: ______________________________________________________

10. Father’s/ Guardian’s Financial Status/ Family Particulars (If Minor)

a) Father's Name in Full (beginning with Surname) _____________________________________

b) Guardian's Name (To be filled in if father is not alive)__________________________________
c) Present Age of Father/Guardian__________________________________________________
d) Relationship of Guardian ________________________________________________________
e) Address of Father I Guardian_____________________________________________________
f) Occupation (Give Full Particulars)_________________________________________________
g) Since when in present occupation_________________________________________________
h) Income Per Month (Primary source) _______________________________________________
i) Income from other sources (Please mention)________________________________________
j) Particulars of Assets Held and Value_______________________________________________

Declaration
I/We hereby declare that the information furnished against the foregoing items is true to the best of
my/our knowledge. I/Wemake this declaration knowing that on the faith and strength of the information
furnished herein, the application will be considered by the Bank. I/Wehave read the terms and conditions
and agree to abide by them.
_____________________ _________________________
Signature of Father/ Guardian Signature of Student
(In case of Minor)
Place -

Date -

Education loan Scheme: Master Circular 68 | P a g e