Project Report On Comparative Study of Education Loan With Reference To SBI, PNB !

SBC

C!"PTER # INTRO$%CTION

C!"PTER&#
INTRO$%CTION
Education 'oan( can au)ment the *oundarie( of +hat you can achieve
Education never ends it is not said without reason. We are educated all our lives and getting an education not only is a great achievement but something that gives you the tools to find your own way in the world. Education is indispensable; little do we realize how much more it can bring to us in terms of worldly amplifications. Anyone can have propensity and the natural endowment for education. But one might not have the resources to finance their education. ou certainly can!t let lac" of resources impede you from advancing your prospects through education. #hen you accidentally stumble upon the word $education loans!. %oans for education you have never thought about it as a feasible arrangement. Education loans can open newer panoramas in regard to your education aspirations. Education loans are open to all people in all its myriad forms. Education loans can realize your education plans or the education plans of your children. ou can strengthen you own future and the future of your son or daughter with education loans. An e&tensive range of student and parent loans are presented under the category of education loans. #here are many types of education loans. 'iscerning about the types of education loans will help you in ma"ing the accurate decision. #he single largest resource of education loans is federal loan. #he two main federal education loan programs are the (ederal (amily Education %oan )rogram and the (ederal 'irect %oan )rogram. *n the (ederal (amily Education %oan )rogram the ban"+ credit union or the school is the lender. While the federal direct loans program+ the department of education is the lender.

)rivate education loans are offered to people so that they can provide financial bac"up to their education plans. )rivate education loans are not endorsed by other government agencies but are provided by other financial institutions. )rivate education loans program are optimum for both undergraduate and graduate studies. (ormal education is re-uisite for future success. #hough this is not a hard and fast rule+ but education certainly helps you in gaining an upper hand. With universities getting e&pensive by each day an education loan will certainly give you an incentive to go ahead with your education plans. Each year while contemplating on your education plans the thought of finances almost invariably comes in. While wor"ing towards you degree+ you are constantly plagued about paying for the education fees+ boo"s+ and other living e&penses. Education loans can provide funding for tuition fees+ board and room+ boo"s computer+ and even student travel. An education loan can help you with all these e&penses. Education loans are sufficient enough to ta"e care of all these e&penses. *f you have been forced to drop your education for any reason+ you can still ta"e up your education at any point of time. *rrespective of your age and also where you have left your education. #here are no specific eligibility criteria for education loans. Any person who is in need of sponsorship for education can find an education loan that befits his or her financial necessity. %oan amount on education loans vary with the "ind of education you want to pursue. #he repayment options with education loans will similarly accommodate your personal financial preferences. ou can either repay interest amount while still in school or si& months after graduation. Education loans offer up to ten years for repayments. #he refund alternatives on education loans also include deferment+ forbearance and consolidation. #he various sites on education loans can give you innumerable repayment options and monetary remuneration.

Education loans will help you in planning your life after graduation. /owever+ an education loan li"e every loan is a huge financial obligation. An education loans is generally the first substantial loan for most people and therefore the first ma0or e&pense. 'o not be completely dependent on your education loans for the funding of your complete education. #ry to apply for any other financial sustenance li"e university grants+ scholarships+ fellowships+ wor" study programs and assistance ship and any other form of aid. #his will certainly encourage a fluid dispensation of your education loans. ou can start by going to the financial aid office in your school or university. *t will provide you further insight to the "ind of education loans+ you must apply for. Education is an e&perience of life. *t is so rewarding in itself that it helps you to manage almost everything in your life. Education loans discipline your impulse towards education and training into a fruitful contrivance. #he payoff is delicious in terms of improved -uality of life. Education is e&pensive1 *s it2 With education loans it can!t be. 3ow+ you don!t have to ta"e the road in front of you. 4a"e your own road with education loans.

C!"PTER , RE-IEW O. LITER"T%RE "N$ RESE"RC! /ET!O$OLO01

C!"PTER&,
,2# Revie+ Of Literature
#here appears some difficulty for those candidates who have secured admission

to these courses in the management -uota to professional colleges here to get educational loans from the ban"s. When it comes to sanctioning educational loans+ there should be no discrimination to those who secure admission in the management or merit -uota+7 3Kerala Chief Minister Oommen Chandy NDTV News weekly, 2011) Borrowers who withdraw from school for whatever reason have higher default rates+ with default rates rising as the number of times withdrawn rises. *n addition+ students who withdraw for administrative or academic reasons have higher default rates than students who withdraw for wor"8related reasons ( teiner and Tes!ler, 200") 3ot surprisingly+ borrowers with high earnings after they leave school are less li"ely to default than those with low earnings. #his fact underlines the ris" students assume in ta"ing out large loans and then entering low8paying careers. But+ in predicting default+ this income variable was only half as strong as the variables for unemployment or dropping out (#oo 2002) /aving an ade-uate disposable income is a necessary+ but not sufficient+ condition for honoring the terms of a student loan. %ow incomes increase default ris"+ but many of those having the apparent ability to repay nevertheless choose not to$(%lint, 1&&')

 #he education %oan scheme of :B* aims at fulfilling the financial needs of deserving; meritorious students for higher education in *ndia and abroad. #he ban" claims to lay emphasis on providing opportunity to every meritorious student on affordable terms and conditions ( tate (ank of )ndia ( ()) Chairman *rati+ Cha,dh,ri)

,2, O*jective Of The Study

#o compare education loan schemes < policies of the )un0ab 3ational Ban" =)3B>+ :tate Ban" of *ndia =:B*> and /ong8?ong :hanghai Ban"ing @orporation =/:B@>

,24 !ypothe(i(
Education loan is gaining much importance in *ndia Education %oans provided by public sector ban"s are much beneficial than private sector ban"s.

,25 /ethodo'o)y6
*n this research * have adopted the E7p'oratory Re(earch method only for )3B+ :B* and /:B@ Education loan schemes for 0ust compare the offer document of these three ban"s.

,28 $ata Source6

)rimary data is ta"en from various internal documents and circulars issued by the ban"s from time to time and :econdary data is ta"en from different boo"s and financial

information published in newspapers and from the ban"s websites and other related websites.

,29 Scope6
Besearch scope is only three ban"s and these three ban"s are :tate Ban" of *ndia =:B*>+ )un0ab 3ational Ban" =)3B>+ and /ong8?ong :hanghai Ban"ing @orporation =/:B@>.

,2: Limitation(6
#here are some limitations in this research; these limitations are as follows #ime limitation 4any ban"s provide education loan but in this research only three ban"s are ta"en for consideration. :ome ban"s have not provided their internal information;circular.

C!"PTER 4 P%N;"B N"TION"L B"N< 3PNB= E$%C"TION LO"N SC!E/ES

C!"PTER & 4

The ed,-ation loan s-heme +ro.ided /y *,n0a/ National /ank is 1Vidya 2akshya+,rti 3 4d,-ation 2oan -heme5 42# O*jective

#o provide financial support to deserving ; meritorious students for pursuing education in *ndia and abroad. #he :cheme aims at providing financial assistance to meritorious students with an opportunity including underta"ing basic education and to the meritorious students to pursue higher+ professional and technical education. 42, E'i)i*i'ity

,3i= Cour(e( e'i)i*'e a. :tudies in *ndia

:chool Education including )lus , stage Eraduation courses B.A.+ B.@om. B.:c.+ etc. )ost8Eraduation coursesF 4asters < )h.'. )rofessional coursesF Engineering+ 4edical+ Agriculture+ Geterinary+ %aw+ 'ental+ 4anagement+ @omputer etc. @omputer @ertificate courses of reputed institutes accredited to 'epartment of Electronics or institutes affiliated to Hniversity @ourses li"e *@WA+ @A+ @(A etc. @ourses conducted by **4+ **#+ **:c+ I%B*+ 3*(#+ etc. @ourses offered in *ndia by reputed foreign Hniversity.

1J

 Evening @ourses of approved *nstitutes. Kther @ourses leading to 'iploma ; 'egree etc. conducted by @olleges ; Hniversities approved by HE@ ; Eovt. ; A*@#E ; A*B4: ; *@4B etc. @ourses offered by 3ational *nstitutes and other reputed )rivate *nstitutes.

b. :tudies abroad
Eraduation (or 0ob oriented professional ; technical courses offered by reputed universities. @redentials of the Educational *nstitution may be got certified from authenticated sources ; Embassy in *ndia. )ost Eraduation 4@A+ 4BA+ 4: etc. @ourses conducted by @*4A %ondon+ @)A in H:A etc.

,3ii= Student e'i)i*i'ity

:hould be an *ndian 3ational :ecured admission to )rofessional ; #echnical courses through Entrance #est ; :election process. :ecured admission to foreign Hniversity ; *nstitutions. :tudent should have secured pass mar"s in the -ualifying E&amination for admission to Eraduation @ourses.

,3iii= E7pen(e( con(idered for Loan

(ee payable to @ollage ; :chool ; /ostel. E&amination ; %ibrary ; %aboratory fee. )urchase of boo"s ; e-uipment!s ; instruments ; uniforms. @aution 'eposit ; Building (und ; Befundable 'eposit supported by *nstitution Bills ; Beceipts.

11

 #ravel E&penses ; )assage money for studies abroad. )urchase of computers essential for completion of the @ourse. Any other e&pense re-uired to complete the course li"e study tours+ pro0ect wor"+ thesis+ etc.

424

>uantum Of .inance

3eed based finance+ sub0ect to repaying capacity of the parents ; students with margin and the following ceilingsF8 :tudies in *ndia :tudies abroad 8 4a&imum Bs. A.6J lacs.

4a&imum Bs. 16.JJ lacs.

425

/ar)in
Hpto Bs. 5.JJ lacs Above Bs. 5.JJ lacs F F 3il :tudies in *ndia 6L

:tudies in Abroad 16L :cholarship ; assistantship to be included in 4argin. 4argin may be brought in on year8to8year basis as and when disbursements are made on a pro8rata basis.

1,

428

Security

3o :ecurity may be insisted upon for loans upto Bs. 5.JJ lacs. /owever+ for loans above Bs. 5.JJ lacs+ @ollateral :ecurity of :uitable value =at least e-ual to loan amount> or co8obligation of parents ; guardian ; third party along with assignment of future income of the student for payment of installment may be obtained viz.+ F8 Hpto Bs. 5.JJ lacs Above Bs. 5.JJ lacs F F 3o :ecurity.

@ollateral :ecurity of :uitable value =e-uivalent to 1JJL of the amount of loan> or co8obligation of parents ; guardian ; third party.

*n addition to above assignment of future income of the student for payment of installments =stands included in the Agreement>. 3K#EF The document (hou'd *e e7ecuted *y the (tudent and the parent ? )uardian2 #he security can be in the form of land ; building ; Eovt. :ecurities ; )ublic :ector Bonds ; Hnits of H#*+ 3:@+ ?G)+ %*@ )olicy+ Eold+ :hares ; 'ebentures+ Ban" 'eposit in the name of the student parent ; guardian or any other third party with suitable 4argin.

1.

 Wherever the land ; building is already mortgaged+ the unencumbered portion can be ta"en as security an ** charge basis provided it covers the re-uired %oan amount. *n case the loan is given for purchase of @omputer+ the same to be /ypothecated to the Ban".

429 Rate of Intere(t

Hpto Bs.5.JJ lacs Above Bs.5.JJ lacs )#%B )#%B M 1L

#he interest to be debited monthly on simple basis during the Bepayment holiday ; 4oratorium period. )enal interest N ,L be charged for above Bs. ,.JJ lacs for the overdue amount and overdue period.

42: Loanin) Po+er(

As per loaning )ower @hart in force from time to time F 3o application for educational loan received should be re0ected without the concurrence of the ne&t higher authority.

42@ Repayment
Bepayment /oliday ; 4oratorium @ourse period M 1 year KB 9 months after getting 0ob+ whichever is earlier.

15

#he loan is to be repaid in 68A years after commencement of repayment. *f the student is not able to complete the course within the scheduled time+ e&tension of time for completion of course may be permitted for a ma&imum period of , years. *f the student is not able to complete the course for reasons beyond his control+ sanctioning authority may at his discretion consider such e&tensions as may be deemed necessary to complete the course. #he accrued interest during the repayment holiday period to be added to the principal and repayment in E-uated 4onthly *nstallments =E4*> be fi&ed. 1L *nterest concession may be provided by *ncumbents to lonees if the interest is serviced by them during the study period when repayment holiday is specified for interest ; repayment under the :cheme. *nterest concession is to be provided to borrowers only at the time of final repayment of the loan.

42A Po(t Sanction .o''o+ %p

Branches to contact college ; university authorities to send the progress report at regular intervals in respect of students who have availed loans

42#B %pfront .ee

3*%

42## Time Norm(

%oan applications have to be disposed of within a period of 16 days to one 4onth but not e&ceeding the time norm stipulated for disposing of loan Applications under )riority :ector %ending.

42#, Capa*i'ity Certificate

16

:ince+ some of the foreign universities re-uire the students to submit a certificate from their ban"ers about the sponsors solvency ; financial capability+ with a view to ensure that the sponsors of the students going abroad for higher studies are capable of meeting the e&penses till completion of studies+ capability certificate may be issued in such cases. (or this financial and other supporting documents may be obtained from the applicant.

42#4 /ode Of "pp'ication Of Intere(t

*nterest on Education %oan accounts shall be wor"ed out at the end of each month and recorded on a separate sheet in the ledger but not debited to the borrower!s account. *nstead+ it should be debited to a separate account opened in the :ubsidiary Eeneral ledger titled $*nterest Accrued on Advances under Education %oan :cheme! forming one of the components of the main head of Eeneral %edger. $*nterest Accrued on Advances! and credited to Bevenue /ead *ncome $*nterest on term loan! till the commencement of repayment of first installment. Kn the date fi&ed for commencement of repayment+ the whole amount of interest so far wor"ed out and recorded as above should be debited to the borrower!s account by corresponding credit to the $*nterest Accrued on Advances under Education %oan :cheme!. Bepayment of loan and interest may be determined "eeping in view the above procedure for charging of interest.

42#5 Confidentia' Report(

Kn Borrower=s> confidential report. Kn Euarantor=s> ; @o8obligants F (orm 3o. )3B DJ6 ;,C,=@>. F 3o confidential report on the borrower will be re-uired as the application for loan will indicate the information re-uired to be furnished in the

42#8 $ocumentation
19

i>

Agreement =Anne&ure 81> duly stamped+ to be ta"en in case where the student is minor. (urther+ in case of 4inor student+ on attaining his;her ma0ority confirmation from student be obtained as per Anne&ure ***.

ii> iii>

Agreement =Anne&ure **> duly stamped+ to be ta"en in case where the student is 4a0or. %etter of Euarantee =)3B AC6> duly stamped as an Agreement to be ta"en in case of loan amount is above Bs. 5 lacs.

iv>

*n case of collateral security is to be ta"en is mortgage+ procedure given in Boo" of *nstruction on %oans to be followed.

The document( (hou'd *e e7ecuted *y the (tudent and parent ? )uardian2

42#9 $i(*ur(ement
Education loan is to be disbursed in the form of term loan. A limit upto which advance is to be allowed during each year will be set up. Each time the borrowing scholar is in need of funds to pursue his studies; he will approach the lending office and will e&plain his needs to the *ncumbents *n charge will permit drawing on the borrower!s account within the limit fi&ed. #his will also enable the *ncumbent *n charge to remain in close touch with the borrowing students! activities. #he loan to be disbursed in stages as per the re-uirement ; demand directly to the *nstitutions ; Gendors of Boo"s ; e-uipment!s ; instruments to the e&tent possible. %oan to be sanctioned by the branch nearest to the place of domicile of the student.

1A

*n case of+ purchase of stationary and boo"s+ loan may be disbursed in cash on declaration by the applicant and production of bills.

42#: C'a((ification
Advances allowed under the :cheme will be classified under )riority :ector.

42#@ ChecC Li(t

#o facilitate e&peditious disposal of applications+ a chec"8list regarding documents+ security etc. Along with application forms for Education %oans be provided to intending borrowers. An illustrative chec"8list enabling a ready reference+ so that intending borrowers can furnish all related documents ; papers in one lot+ is given below F8 %oan application on Ban"!s format. )assport size photograph. )roof of Address. )roof of having secured pass mar"s in last -ualifying e&amination. %etter of admission in professional+ technical or vocational courses. )rospectus of the course wherein charges li"e Admission (ee+ E&amination (ee+ /ostel @harges etc. are mentioned. 'etails of Assets < %iabilities of parents. *n case loan amount is above Bs. 5.JJ lacs F
1C

)articulars of Euarantors and details of their Assets < %iabilities. *f immovable property offered as @ollateral :ecurity copy of #itle 'eed+ Galuation @ertificate and 3on8encumberance @ertificate from approved %awyer of the Ban". )hotocopy of )assport < Gisa+ in case of study abroad. Any other document ; information+ depending upon the case and purpose of the loan.

42#A Po(t Sanction Supervi(ion

#he Ban" will reserve the right of giving loan under this :cheme to any scholar or continue ; discontinue the yearly disbursement to a borrower under the :cheme+ depending upon whether or not he ; she shows good results at the institution he ;she has 0oined for studies and whether of not reports about his ; her conduct are satisfactory. :uch reports will be re-uired to be produced to the *ncumbents *n charge of the lending office before the start of each academic year subse-uent to the first year. %oan pass boo" =)3B6CD> be issued to the borrower containing details such as date of sanction of loan+ amount of loan+ amount of loan sanctioned+ subsidy received =if any> rate of interest+ amount due under each installment+ due date of installment etc.

42,B Other Condition(

Oonal 4anagers and above may consider rela&ation with regard to Eligibility+ 4argin and :ecurity norms on merits of each case. 3o 'ue @ertificate need not be insisted upon as a pre8condition for considering educational loan. /owever+ Branches may obtain a declaration ; an affidavit
1D

@onfirming that no loans are availed from ban"s.

C!"PTER 5 ST"TE B"N< O. IN$I" 3SBI= E$%C"TION LO"N SC!E/ES

,J

C!"PTER & 5
SBI E$%C"TION LO"N i( a term 'oan )ranted to Indian Nationa'( for pur(uin) hi)her education in India or a*road +here admi((ion ha( *een (ecured2

52#E'i)i*'eCour(e(
All courses having employment prospects are eligible.

Eraduation courses; )ost graduation courses; )rofessional courses Kther courses approved by HE@;Eovernment;A*@#E etc.

52, E7pen(e( Con(idered .or Loan

(ees payable to college;school;hostel E&amination;%ibrary;%aboratory fees )urchase of Boo"s;E-uipment;*nstruments;Hniforms @aution 'eposit;Building (und;Befundable 'eposit #ravel E&penses;)assage money for studies abroad )urchase of computers considered necessary for completion of course @ost of a #wo8wheeler upto Bs. 6J+JJJ;8

,1

Any other e&penses re-uired to complete the course li"e study tours+ pro0ect wor" etc.

524 "mount of Loan

(or studies in *ndia+ ma&imum Bs. 1J lacs :tudies abroad+ ma&imum Bs. ,J lacs

525Intere(tRate
(or loans upto Bs. 5 la"h 1J.6JL p.a (or loans above Bs. 5 la"h 11.6JL p.a

528 Proce((in) .ee(

3o processing fee; upfront charges 'eposit of Bs. 6JJJ;8 for education loan for studies abroad which will be ad0usted in the margin money

529 Repayment Tenure

Bepayment will commence one year after completion of course or 9 months after securing a 0ob+ whichever is earlier.

P'ace of Study

Loan "mount

Repayment in 1ear( 68A 681J 68A

Period

*n *ndia Abroad

Hp to Bs. A.6 lacs Above Bs. A.6 lacs Hp to Bs. 16 lacs

,,

Above Bs. 16 lacs

681J

Security
"mount Studie( In India Studie( "*road Hpto Bs. 5 lacs 3o :ecurity 3o :ecurity Above Bs. 5 lacs to Bs. A.6J #hird )arty Euarantee #hird )arty Euarantee lacs Above Bs. A.6J lacs to Bs. 1J #angible @ollateral #angible @ollateral security of lacs=*ndia>; lacs=Abroad> Bs 16 lacs to Bs. ,J lacs Bs. 16 security for full value suitable value of loan or third of loan PPP party guarantee #angible @ollateral security for full value of loan

52: /ar)in
(or loans up to Bs.5.J lacsF 3o 4argin

(or loans above Bs.5.J lacsF

o o

:tudies in *ndiaF 6L :tudies AbroadF 16L

52@ $ocumentation ReDuired

@ompleted Education %oan Application (orm. 4ar" sheets of last -ualifying e&amination )roof of admission scholarship+ studentship etc :chedule of e&penses for the specified course
,.

, passport size photographs BorrowerQs Ban" account statement for the last si& months *ncome ta& assessment order+ of last , years Brief statement of assets and liabilities+ of the @o8borrower )roof of *ncome =i.e. :alary slips; (orm 19 etc>

,5

52A Education Loan Scheme .or Student( Of I(*

Loan amount

Hpto D6L of all costs up to a ma&imum of Bs.15.6J lac. =#a"ing into account e&penditure of married students and cost of a laptop+ which is essential for students.>

/ar)in Rate of Intere(t

8E

DL lac.

=(loating>. E4*RF Bs.1,CA;8per

C.6L =(loating>+ if tangible security e-uivalent to 6JL of loan amount is furnished. E4*RF Bs.1,9J;8 per lac. :hould a tangible collateral security e-uivalent to 6JL of outstanding loan amount be furni(hed mid+ay throu)h the tenure of the loan+ the concession of 6J basis points in the rate of interest shall become applicable from the month following the month in which such security is furnished. Knly Simp'e Intere(t will be

charged during the course and moratorium period.

#he rate of interest will not change during the complete tenure of the

,6

loan.

*nterest months

is

calculated

on

daily

reducing balance. 4* of D years < D Repayment

Hp to 1J years. A customized repayment schedule ta"ing into account individual repayment capacity of the student is permissible.

/oratorium Period Co&*orro+er Security

Hp to . months after completion of course. es. #he loan will be granted 0ointly with the parent; guardian.

%ien on the original @ertificate and 4ar"s :heet of the student. #he @ertificate will remain in custody of :B* during the currency of the loan.

#hird

party

guarantee

=#)E>+

preferably of earning sibling of the student or a person "nown to the Ban" i.e.+ a person who is our customer or he;she is a reputed person or a guarantor of one of our borrowers. "pp'ication Proce((in) Time %oans will be sanctioned and disbursed within three days+ after submission of application form+ complete in all respects

,9

e&cept where mortgage of immovable property is to be created. Proce((in) .ee(? Prepayment Ni'2 Char)e( .orec'o(ure Char)e( TaCeover of Education Loan from Permi((i*'e other BanC(? .inancia' In(titution( for e7i(tin) (tudent( and a'umni Contact Branch /yderabad Hniversity @ampus Branch+ Eachibowli+ #elephoneF (a&F J5J8,.J1191A /yderabad8 6JJJ1D J5J8,.J11.J1;,CD

$ocument( to *e enc'o(ed
i. ii. iii. 4ar" sheet of last -ualifying e&amination for school and graduate studies in *ndia. @opies of letter conferring scholarship+ free ship+ studentship etc. 'ocuments evidencing the duration of course and commencement thereof

viz. prospectus or certificate from the competent authority of the institution. iv. )roof of admission to the course. v. :chedule of e&penses for the course. vi. #wo copies of passport size photograph of the borrower=s> ; guarantor=s>. vii. :tatement of Ban" account for the last si& months of the borrower=s> viii. :ignature identification from ban"ers of borrower=s> guarantor=s>. i&. A copy of )assport;Goters *' @ard;)roof of residence.

.or (a'aried per(on(

i. %atest salary slips showing all deductions. ii. Employment details for the last 6 years. iii. %atest #': @ertificate (orm 19.

,A

iv. :tatement of assets and outstanding liabilities.

.or Se'f&Emp'oyed?Profe((iona'( and Bu(ine((men

)roof of income. *ncome #a&;Wealth #a& =if applicable> assessment orders not more than , years old.

Assets and %iabilities. Kriginal :ale 'eed Kriginal receipt of payment made for registrar :ociety share certificate 3on encumbrance or certificate from advocate Galuation Beport

If Co''atera' Security i( /ort)a)e of Landed Property

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C!"PTER 8 !SBC E$%C"TION LO"N SC!E/ES

C!"PTER & 8
The !SBC *anC ( education 'oan criteria are a( under6 82# .eature( "nd Benefit(
Eet financial fle&ibility with /:B@ educational loans

82, Loan "vai'a*i'ity

,D

Educational loans are available for studies in *ndia or abroad. Avail of loan amounts ranging from a minimum of Bs. 6J+JJJ to a ma&imum of Bs. ,6+JJ+JJJR.

824 Smooth Repayment

Kur E-uated 4onthly *nstallments =E4*s> scheme allows for easy repayment and saves you from hassles. (le&ibility Kur loans are tailor8made to your needs. Kpt for tenures up to 5 years for unsecured loans and A years for secured loans =against security of a residential property ; shares>.

825 Comprehen(ive Covera)e

Educational loan also covers e&penses for boarding and lodging. /:B@ ban"ing benefits #a"e advantage of /:B@Qs ban"ing benefits; let us help you open a :avings account or avail of a debit card.

828 LOW INTEREST R"TES

Ban" offer you competitive interest rates on your educational loans. Ban" also gives you the option of choosing between a fi&ed or floating rate of interest =the floating rate option is available only in case of secured loans>. :pecial Belationship 'iscounts

.J

ou are also eligible for special discounts e&clusively designed for /:B@ customers =of 9 months or more>.

%oans above Bs.6JJ+JJJ are available against security of residential property;shares. %oans to value ratio to be less than or e-ual to 6JL of the property valuation. %oans available for study at select institutes+ based on their accreditation. #he interest rate on your floating rate /ome loan is lin"ed to /:B@Qs 4ortgage %ending Bate =4%B> and any revision in the 4%B would impact your interest rate. #he 4%B is currently D.6L. #erms and conditions apply. All loans at the sole discretion of #he /ong"ong and :hanghai Ban"ing @orporation %imited+ *ndia. %oans available for applicants and properties in and around the limits of cities where /:B@ has branches and is sub0ect to change from time to time. )lease be advised that vide (inance =3o.,> Act ,JJ5+ w.e.f. 1J :ep ,JJ5+ a service ta& of 1JL M ,L education cess thereon will be applicable on our fees and charges.

829 E'i)i*i'ity
#o -ualify for an Educational %oan+ the following criteria apply. 1. Applicant should be a resident *ndian ,. 4inimum net annual income of Bs 16J+JJJ for secured loan and Bs A6+JJJ for unsecured loan .. :tudent must have secured admission to a recognized college;university in *ndia or abroadR R %oans available for study at select institutes+ based on their accreditation

.1

#he interest rate on your floating rate /ome loan is lin"ed to /:B@Qs 4ortgage %ending Bate =4%B> and any revision in the 4%B would impact your interest rate. #he 4%B is currently D.6L. #erms and conditions apply. All loans at the sole discretion of #he /ong ?ong and :hanghai Ban"ing @orporation %imited+ *ndia. %oans available for applicants and properties in and around the limits of cities where /:B@ has branches. Gide (inance =3o.,> Act ,JJ5+ w.e.f. 1J :ep ,JJ5+ a service ta& of 1JL M ,L education cess thereon will be applicable on our fees and charges.

.,

C!"PTER 9 .IN$IN0S, S%00ESTIONS "N$ CONCL%SIONS

C!"PTER & 9
92# .indin)(

..

The fo''o+in) are the findin)( of the a*ove (tudy6 SR2 No2
1. ,. .. 5. 6. 9. A. Beneficiaries Kb0ective Aimed at 4argin money :ecurity *nterest rate Attitude Economically affluent :ections of society. @ommercial )rofit earning 4ust 3ecessary /igh Bigid and strict economically wea"er :ections also. 3ational and social 3ot profit alone (le&ible %ess important Beasonable (le&ible and liberal

Parameter

Private BanC(

Pu*'ic BanC(

S'2 No2
1

Ba(i( $ifference

of PNB

SBI
Bs. 1J.JJ %acs

!SBC
4in. 6J+JJJ to Bs. a

4a&. loan for Bs. A.6J %acs studies in *ndia

4a&. of Bs. , 4a&. loan for Bs. 16.JJ %acs studies 4 Abroad *nterest Bates in Hpto Bs.5.JJ lacs )#%B Above Bs.5.JJ lacs )#%B M 1L 5 Bepayment )eriod Kne year Hpto 1J.6JL Above Bs. 11.6JL p.a. after Kne year after Bs. 5 la"h D.6L p.a. 1JL 5 la"h ta& M p.a M ,L Bs. ,J.JJ %acs ,6+JJ+JJJ 3ot Available

service

education cess

starts completion of course completion of course 3ot Available

.5

from

or 9

months a

after or 9

months a

after 0ob+

securing

0ob+ securing

whichever is earlier2

whichever is earlier2

Bepayment )eriod

#o be repaid in 68A In India F Hp to Bs. Hp to 5 years years commencement repayment after A.6 lacs 8 68A years 1J years 16 lacs 68A years 1J years for unsecured and A for years =against residential property shares>. ; of Above Bs. A.6 lacs 868 loans

In "*road F Hp to Bs. secured loans Above Bs. 16 lacs 68 security of a

4argin

Hpto Bs. 5.JJ lacs F 3il in

Hpto Bs. 5.JJ lacs F 3il 6L

3ot Available

Above Bs. 5.JJ lacsF Above Bs. 5.JJ lacsF :tudies 6L 16L *ndia :tudies in *ndia :tudies in Abroad

:tudies in Abroad 16L

.6

)rocessing (ees 3o

processing 3o

processing 3ot Available

fee;upfront charges

fee;upfront charges 'eposit of Bs. 6JJJ;8 for education loan for studies abroad which will be ad0usted in the margin money

:ecurity

Hpto Bs. 5.JJ lacs F 3o :ecurity Above lacs Bs. 5.JJ F@ollateral

Hpto Bs. 5.JJ lacs F 3o :ecurity Above Bs. 5.JJ lacs to Bs. A.6J lacs F#hird )arty Euarantee

3ot Available

:ecurity of :uitable Above Bs. A.6J lacs to Bs. value 1J lacs=*ndia> F #angible =e-uivalent to 1JJL @ollateral security for full of the amount of value of loan Above Bs. loan> or co8obligation of
A.6J lacs to Bs. 16 of lacs=Abroad> @ollateral #angible security

parents ; guardian ; suitable value of loan or third third party guarantee Bs )arty.
16 lacs to Bs. ,J lacs =Abroad>#angible @ollateral security for full value of loan

92, Conc'u(ion
.9

 Kn the basis of above findings and comparison among )3B+ :B* and /:B@ it is clearly observe that public ban"s have more reach+ variety and fle&ibility in their education loan schemes whereas private ban"s uses some new concepts in their offerings li"e tailor made repayment system. 4a&imum loan for studies in *ndia is ranging from Bs. A.6J lacs to 1J.JJ lacs and for studies in Abroad it is Bs. 168,J lacs by public ban"s and in the case of private ban"s+ they provide minimum Bs. 6J+JJJ to a ma&imum of Bs. ,6+JJ+JJJ lacs. *nterest rates are varying from D.6L to 11.6L p.a and )3B uses )#%B system. All ban"s have same repayment facility i.e. one year after completion of course or 9 months after securing a 0ob+ whichever is earlier. Bepayment period is also vary from 68A year after commencement of repayment in the case of education loan is ta"en from public ban"s and it is 58A years on the basis of unsecured and secured education loan ta"en from private ban"s. 4argin is same in )3B and :B* i.e. Hpto Bs. 5.JJ lacs Above Bs. 5.JJ lacs F 3il F :tudies in *ndia 6L :tudies in Abroad 16L )3B and :B* do not charge any processing fees but :B* ta"es 'eposit of Bs. 6JJJ;8for education loan for studies abroad which will be ad0usted in the margin money

.A

924 Su))e(tion(
Ban"s should try to cash its brand image. Ban"s should go for advertisement @ampaign from :cratch. :trong branch networ" should be made and staff personnel!s incentives should be increased. Ban"s should increase its product line in education loans. :pecial scheme for non8professional students as well as for professional students should be increased. Ban"s should introduce some new model "eeping in mind the loan suitable for medium income group customer. )resence of some famous personality in Advertisement or in )amphlet!s insuring better retention in the mind of customers. *n this age of information+ the customer before ta"ing loans collects all the information about various brands. #he ban"s should provide a combined boo"let of the product range in order to upgrade the "nowledge of future ta"ings of loans.

.C

"PPEN$IF

.D

.OR PNB F
=#o be ta"en in case where the student is 4inor> A33EIHBE * "0REE/ENT .OR E$%C"TION LO"N #his Agreement is made atPPPPPPPPPPPPPon thisPPPPPPPday of PPPPP,J PP between :hri ; :mt PPPPPPPPPPPPPPPPPPPPPPPPPPPP+ son ; wife of :hri PPPPPPPPP PPPPPP PPP r;o PPPPPPPP PPPPPPPP PPPPPP =hereinafter referred to as $parent ; guardian!> :h. ; ?umari PPPPPPPPPPPPPPPPPPPPP minor aged PPPPPPPP years =date of birth PPPPPPPPP>+ :;o ; ';o :h.; :mt. PPPPPPPPPPPPPPPPPPPP r;o PPPPPPPPPPPPPPPPPPPPPPPPPPPPPP =hereinafter referred to as $student!>+ represented by his ; her natural ; court guardian :h.; :mt. PPPPPPPPPPPPPPPPPPPP =both parent ; guardian and student are collectively called the $borrowers! which e&pression shall unless repugnant to conte&t include his ; her heirs+ e&ecutors+ administrators and assigns> of the Kne )art and )un0ab 3ational Ban" a body corporate constituted under the Ban"ing @ompanies =Ac-uisition < #ransfer of Hnderta"ings> Act+ 1DAJ having its head office at A+ Bhi"ha0i @ama )lace+ 3ew 'elhi and amongst other a branch office at PPPPPPP PPPPPPP PPPPPP PPPPPP =hereinafter called the $ban"! which term shall unless repugnant to conte&t include its successors and assigns> of the Kther )art.

W/EBEA: A> :h. ; :mt PPPPPPPPPPPPPPPPPPP =parent ; guardian> represents that his; her ward :h. ; ?umari PPPPPPPPPPPPPPPPP=hereinafter called the student> is desirous of pursuing ; continuing his ; her studies at PPPPPPPPPPPPPPPPPPPPPP for a period of PPPPPPPPPP but is unable to do so due to paucity of funds. A3'

5J

B>

#he Borrowers have+ with a view to receiving the financial assistance for studies of his;her ward+ applied to the ban" for a loan of Bs. PPPPPPPPPPPP=rupeesPPPPPPPPPPPPPPPPPPPPP> which the ban" has agreed to grant on terms and conditions herein arter appearingF

NOW T!IS "0REE/ENT WITNESSET! "S %N$ER

1. #he total amount of the loan amounting to Bs. PPPPPPPPPP will be disbursed by the ban" to the borrowers as under F8 State the manner of di(*ur(ement ,. #he amount of loan will be utilized by the borrowers only for the purpose of persecuting studies of the $student! + such as payment of fees payable to college ; school; hostel+ e&amination ; library laboratory fee + purchase of boo"s ; e-uipment ; instruments ; uniform caution deposit ; building fund ;refundable deposit ; supported by the institution bills ; receipts+ travel e&penses ; passage money for studies abroad+ purchase of computers8essential for completion of the course any other e&penses re-uired to complete the course8 li"e study tour pro0ect wor"+ thesis etc. .. At the end of each academic year+ borrowers will produce a certificate from the head of the institution at which the student is studying testifying the results achieved by the student during and at the end of the year as well as about his conduct. *f the said certificate is not produced or the certificate furnished for any year is not considered satisfactory the Ban" will =in its absolute discretion> have the right of stop giving any further financial assistance to the borrower in terms of this agreement notwithstanding the fact that the total amount of the loan as agreed to in paragraph above has not been disbursed to him. #he Ban" will be entitled as its option to recall the loan already+ give together with the interested accrued thereon+ by a demand in writing.
51

"pp'ica*'e in ca(e 'oan i( a*ove R(2 52BB 'ac 5. 6. #he borrowers will secure the loan by providing a suitable surety an unless he has furnished the same he will not avail the loan or any part thereof. #he interest on the loan will be payable at the )#%B rate ;PPPPPL over the )#%B with PPPPPPPPrest. )rovided that the interest payable by the borrowers shall be sub0ect to change in interest rates made by BB* ; Ban" from time to time. =)#%B means )rime #erm %ending Bate of the ban" prescribe by the ban" from time to time. #he )#%B as on date is PPPPPPL p.a.> *n the event of there not being any )#%B+ the borrower agrees to pay interest at the rate as prescribed by the ban". 9. :ub0ect to what is provided in )ara . above+ the borrowers will repay the loan together with interest accrued thereon by e-ual monthly installments in PPPPPPP year after commencement of the repayment i.e. one year after the course period or 9 months after getting 0ob+ whichever is earlier. #he e&tension of the repayment period+ if the student is not able to complete the course for reasons beyond his;her control+ will be in the absolute discretion of the Ban". A. *n the event of death of any of the borrowers+ the ban" shall be entitled not only not to disburse further loan but also recall the outstanding under the loan already disbursed+ irrespective of the installments fi&ed. C. #he borrowers will+ during the period of their indebtedness to the ban"+ "eep the Ban" informed of the change in their address+ vocation and income from time to time. D. #he student8borrower under ta"es to remit and if need be+ give instructions ; authorization to his ; her employer to remit+ the salary to the e&tent necessary or even more + if the borrower so desires + to the account of the borrower. *n witness whereof the parties to these presents have set their hands on the

5,

day+ month and year first mentioned above. PPPPPPPPPPPPPPPPPPPPPPPPPP BKBBKWEB: (KB )H3SAB 3A#*K3A% BA3? =Authorized signatory>

5.

=#o be ta"en in case where the student is 4a0or> A33EIHBE ** "0REE/ENT .OR E$%C"TION LO"N #his Agreement is made atPPPPPPPPPPPPPon thisPPPPPPPday of PPPPP,J PP between :hri ; :mt ; ?m. PPPPPPPPPPPPPPPPPPPPPPPPPPPP+ son ; daughter of :hri PPPPPPPPP PPPPPP PPP r;o PPPPPPPP PPPPPPPP PPPPPP =hereinafter referred to as $student!> and :h. ; :mt. PPPPPPPPPPPPPPPPPPPPP son ; daughter ofPPPPPPPPPPPPPPPPPPPP r;o PPPPPPPPPPPPPPPPPPPPPPPPPPPPPP =hereinafter referred to as $parent!>+ =parent and student collectively hereinafter called the $borrowers! which e&pression shall unless repugnant to conte&t include their heirs+ e&ecutors+ administrators and assigns> of the Kne )art and )un0ab 3ational Ban" a body corporate constituted under the Ban"ing @ompanies =Ac-uisition < #ransfer of Hnderta"ings> Act+ 1DAJ having its head office at A+ Bhi"ha0i @ama )lace+ 3ew 'elhi and amongst other a branch office at PPPPPPP PPPPPPP PPPPPP PPPPPP =hereinafter called the $ban"! which term shall unless repugnant to conte&t include its successors and assigns> of the Kther )art. W/EBEA: A> #he :tudent and )arent =Borrowers> represents that :h. ; ?umari PPPPPPPPPPPPPPPPP=student> is desirous of pursuing ; continuing his ; her studies at PPPPPPPPPPPPPPPPPPPPPP for a period of PPPPPPPPPP but is unable to do so due to paucity of funds. A3' @> #he Borrowers have+ with a view to receiving the financial assistance for his;her studied+ applied to the ban" for a loan of Bs. PPPPPPPPPPPP=rupeesPPPPPPPPPPPPPPPPPPPPP> which the ban" has agreed to grant on terms and conditions herein arter appearingF

55

NOW T!IS "0REE/ENT WITNESSET! "S %N$ER

1. #he total amount of the loan amounting to Bs. PPPPPPPPPP will be disbursed by the ban" to the borrowers as underF8

State the manner of di(*ur(ement

,. #he amount of loan will be utilized by the borrowers only for the purpose of persecuting studies of the $student! + such as payment of fees payable to college ; school; hostel+ e&amination ; library laboratory fee + purchase of boo"s ; e-uipment ; instruments ; uniform caution deposit ; building fund ;refundable deposit ; supported by the institution bills ; receipts+ travel e&penses ; passage money for studies abroad+ purchase of computers8essential for completion of the course any other e&penses re-uired to complete the course8 li"e study tour pro0ect wor"+ thesis etc. .. At the end of each academic year+ borrowers will produce a certificate from the head of the institution at which the student is studying testifying the results achieved by the student during and at the end of the year as well as about his conduct. *f the said certificate is not produced or the certificate furnished for any year is not considered satisfactory the Ban" will =in its absolute discretion> have the right of stop giving any further financial assistance to the borrower in terms of this agreement notwithstanding the fact that the total amount of the loan as agreed to in paragraph above has not been disbursed to him. #he Ban" will be entitled as its option to recall the loan already+ give together with the interested accrued thereon+ by a demand in writing. Applicable in case loan is above Bs. 5.JJ lac 5. #he borrowers will secure the loan by providing a suitable surety an unless he has furnished the same he will not avail the loan or any part thereof.

56

6. #he interest on the loan will be payable at the )#%B rate ;PPPPPL over the )#%B with PPPPPPPPrest. )rovided that the interest payable by the borrowers shall be sub0ect to change in interest rates made by BB* ; Ban" from time to time. =)#%B means )rime #erm %ending Bate of the ban" prescribe by the ban" from time to time. #he )#%B as on date is PPPPPPL p.a.> *n the event of there not being any )#%B+ the borrower agrees to pay interest at the rate as prescribed by the ban". 9. :ub0ect to what is provided in )ara . above+ the borrowers will repay the loan together with interest accrued thereon by e-ual monthly installments in PPPPPPP year after commencement of the repayment i.e. one year after the course period or 9 months after getting 0ob+ whichever is earlier. #he e&tension of the repayment period+ if the student is not able to complete the course for reasons beyond his;her control+ will be in the absolute discretion of the Ban". A. *n the event of death of any of the borrowers+ the ban" shall be entitled not only not to disburse further loan but also recall the outstanding under the loan already disbursed+ irrespective of the installments fi&ed. C. #he borrowers will+ during the period of their indebtedness to the ban"+ "eep the Ban" informed of the change in their address+ vocation and income from time to time. *n witness whereof the parties to these presents have set their hands on the day+ month and year first mentioned above. (or self and as natural guardian; guardian of :h.; ?umariPPPPPPPPPPPPPPPPPPPPPPPPPP BKBBKWEB: (KB )H3SAB 3A#*K3A% BA3? =Authorized signatory>

59

A33EIHBE8*** 'ateFPPPPPPPPPPPPPPPPPPPPP #he 4anager+ )un0ab 3ational Ban"+ BKFPPPPPPPPPPPPPPPPPPP Beg F 4y Education %oan (or Bs.PPPPPPP * write to confirm that you were pleased to grant Education %oan of Bs.PPPPPPPPPPPP to me+ represented by my guardian+ :hri ; :mt. PPPPPPPPPPPPPPPPP for my education. 4y said guardian e&ecuted the re-uired loaning documents in your favor in consideration of the said loan. * inform you that * have attained ma0ority on PPPPPPPPPPPPPP and re-uest you to disburse the remaining amount loan of Bs. PPPPPPPPPPPPPPP to me out of the loan agreed to be granted by you. * am already and willing to e&ecute any further documents in your favor for the said loan+ if so re-uired by you. * also confirm that the amount of loan of Bs. PPPPPPPPPPP already disbursed to my benefit and the same is binding on me and * agree to repay the same with interest as agreed. * further underta"e that * will repay the loan amount granted by the ban" for my education+ in terms of the agreement dated PPPPPPPPPPPPPPP as e&ecuted by :hri ; :mt. PPPPPPPPPPPPPPPPPPPPPP+ my parents ; guardian representing me+ interalia from out of my future income and if need be+ * will give instructions ; authorization to my employer to remit the salary to the e&tent necessary or even more. * will "eep the ban" informed of my address and my profession ; employment from time to time. ours (aithfully PPPPPPPPPPPPPPPPPPPP =Borrower> AddressF8PPPPPPPPPPPPPPPPPPPPPPP

5A

E$%C"TION"L LO"N "PPLIC"TION .OR/ .OR !SBC

(irst 3ame 4iddle 3ame %ast 3ame Address @ity #elephone 4obile Email 'ate of Birth Between
--Day---Month---Year-Please Select

@onvenient time to contact you

--Please select--

and

--Please select--

Are you interested in a free session on overseas studies with an Educational @ounselor 'etails of the Educational *nstitute you are planning to study at F 3ame @ountry Are you an e&isting /:B@ customer2 Account 3o. @redit @ard 3o.
Yes --Please select--

*f yes+ please provide us the @ard 3o or Account 3o

5C

BIBILIO0R"P!1

5D

BIBILIO0R"P!1 BooC(6&

*ndian (inancial :ystem and @ommercial Ban"ing + by **B( 4umbai =page no. ,6D> 4anagement of *ndian (inancial 8 B.%.Eupta

We*(ite(6&
www.pnbindia.com www.stateban"ofindia.com httpF;;www.hsbc.com;1;,;

6J