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Table of Content 1. Introduction of Education Loan 2. Research Methodology 3. PNB Education Loan Scheme 4.

SBI Education Loan Scheme 6. Findings 7. Conclusion 8. Recommendations 9. Appendix 10.Bibliography

INTRODUCTION

credit union . The single largest resource of education loans is federal loan.INTRODUCTION Education loans can augment the boundaries of what you can achieve Education never ends ± it is not said without reason. Anyone can have propensity and the natural endowment for education. Then you accidentally stumble upon the word µeducation loans¶. The two main federal education loan programs are the Federal Family Education Loan Program and the Federal Direct Loan Program. Education loans can realize your education plans or the education plans of your children. Loans for education ± you have never thought about it as a feasible arrangement. You certainly can¶t let lack of resources impede you from advancing your prospects through education. little do we realize how much more it can bring to us in terms of worldly amplifications. But one might not have the resources to finance their education. You can strengthen you own future and the future of your son or daughter with education loans. Discerning about the types of education loans will help you in making the accurate decision. In the Federal Family Education Loan Program the bank. Education is indispensable. There are many types of education loans. Education loans can open newer panoramas in regard to your education aspirations. An extensive range of student and parent loans are presented under the category of education loans. Education loans are open to all people in all its myriad forms. 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.

books. Each year while contemplating on your education plans the thought of finances almost invariably comes in. and even student travel. While working towards you degree. . While the federal direct loans program. Any person who is in need of sponsorship for education can find an education loan that befits his or her financial necessity.or the school is the lender. Education loans can provide funding for tuition fees. An education loan can help you with all these expenses. the department of education is the lender. If you have been forced to drop your education for any reason. board and room. books computer. Formal education is requisite for future success. Private education loans are not endorsed by other government agencies but are provided by other financial institutions. With universities getting expensive by each day an education loan will certainly give you an incentive to go ahead with your education plans. Irrespective of your age and also where you have left your education There are no specific eligibility criteria for education loans. Though this is not a hard and fast rule. and other living expenses. Loan amount on education loans vary with the kind of education you wan. Private education loans program are optimum for both undergraduate and graduate studies. you are constantly plagued about paying for the education fees. but education certainly helps you in gaining an upper hand. you can still take up your education at any point of time. Education loans are sufficient enough to take care of all these expenses. Private education loans are offered to people so that they can provide financial backup to their education plans.

This will certainly encourage a fluid dispensation of your education loans. The payoff is delicious in terms of improved quality of life. However. Try to apply for any other financial sustenance like university grants. It will provide you further insight to the kind of education loans. Make your own road with education loans. PNB has remained fully committed to its guiding principles of sound and prudent banking. forbearance and consolidation. It is so rewarding in itself that it helps you to manage almost everything in your life. the bank has also entered the credit card & debit card business. With over 56 million satisfied customers and 5002 offices. The various sites on education loans can give you innumerable repayment options and monetary remuneration. Education loans offer up to ten years for repayments. life and non- .to pursue. Education loans will help you in planning your life after graduation. Besides being ranked as one of India's top service brands. bullion business. The refund alternatives on education loans also include deferment. you must apply for. The repayment options with education loans will similarly accommodate your personal financial preferences. work study programs and assistance ship and any other form of aid. An education loans is generally the first substantial loan for most people and therefore the first major expense. scholarships. Education loans discipline your impulse towards education and training into a fruitful contrivance. You can start by going to the financial aid office in your school or university. large franchise value and good brand image. you don¶t have to take the road in front of you. PNB has continued to retain its leadership position amongst the nationalized banks. The bank enjoys strong fundamentals. Education is an experience of life. You can either repay interest amount while still in school or six months after graduation. Now. Education is expensive! Is it? With education loans it can¶t be. Apart from offering banking products. fellowships. Do not be completely dependent on your education loans for the funding of your complete education. an education loan like every loan is a huge financial obligation.

etc.74 Mar 09) Punjab National Bank continues to maintain its frontline position in the Indian banking industry. better asset liability management. the bank achieved a net profit of Rs 3905 crore. The impressive operational and financial performance has been brought about by Bank s focus on customer based business with thrust on CASA deposits. the bank has retained its NUMBER ONE position among the nationalized banks in terms of number of branches. During the FY 2009-10.71% and 0. total Business. with 40. Since its humble beginning in 1895 with the distinction of being the first Indian bank to have been started with Indian capital. Gold coins & asset management business.16% as on Mar 10 as per Basel II with Tier I and Tier II capital ratio at 9. Bank has a strong capital base with capital adequacy ratio of 14. .03 Mar 09) while the Book value per share improved to Rs 514. Deposit. with assets of more than Rs 2.life insurance business.98 (Rs 98.44% (1. thrust on recovery and increased efficiency in core operations of the Bank. As on March 10. SME & Agri Advances and with more inclusive approach to banking.77 (Rs 416. the Bank has the Gross and Net NPA ratio of 1. Retail. The Bank has maintained its stake holder s interest by posting an improved NIM of 3. In particular.01% respectively.52% Mar 09) and a Return on Assets of 1. Today.5% & Agriculture Credit to Adjusted Net Bank Credit at 19.15% and 5.96.53% respectively.57% in Mar 10 (3. improved margin management.633 crore. The Earning per Share improved to Rs 123.85% share of CASA deposits.7% was also higher than the stipulated requirement of 40% & 18%. PNB has achieved significant growth in business which at the end of March 2010 amounted to Rs 435931 crore. PNB is ranked as the 3rd largest bank in the country (after SBI and ICICI Bank) and has the 2nd largest network of branches (5002 offices including 5 overseas branches ). Operating and Net profit in the year 2009-10. Assets.During the FY 2009-10.39% Mar 09). its ratio of Priority Sector Credit to Adjusted Net Bank Credit at 40. Advances.

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COMPANY PROFILE .

Among the clients of the Bank are Indian conglomerates. A professionally managed bank with a successful track record of over 110 years. From its modest beginning. agricultural finance. . London.Punjab national bank Established in 1895 at Lahore. Well equipped dealing rooms. Punjab National Bank (PNB) has the distinction of being the first Indian bank to have been started solely with Indian capital. 20 different foreign currency accounts are maintained at major centres all over the globe. Largest branch network in India . The large presence and vast resource base have helped the Bank to build strong links with trade and industry. Strategic business area covers the large Indo-Gangetic belt and the metropolitan centres. the bank has grown in size and stature to become a front-line banking institution in India at present. exporters. Strong correspondent banking relationships with more than 217 international banks of the world. Ranked as 248th biggest bank in the world by Bankers Almanac. The bank was nationalized in July 1969 along with 13 other banks. More than 50 renowned international banks maintain their Rupee Accounts with PNB. medium and small industrial units. undivided India.4525 Offices including 432 Extension Counters spread throughout the country. Punjab National Bank offers a wide variety of banking services which include corporate and personal banking. With its presence virtually in all the important centres of the country. industrial finance. financing of trade and international banking. nonresident Indians and multinational companies.

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Objective .

A. Veterinary. OBJECTIVE To provide financial support to deserving / meritorious students for pursuing education in India and abroad.. Dental. The Scheme aims at providing financial assistance to meritorious students with an opportunity including undertaking basic education and to the meritorious students to pursue higher. Agriculture.PUNJAB NATIONAL BANK (PNB) EDUCATION LOANSCHEAMES ³VIDYA LAKSHYAPURTI ± EDUCATION LOAN SCHEME´ 1. B. .etc. B. 2. ELIGIBILITY 2(i) Courses eligible a) Studies in India ‡ School Education including Plus 2 stage ‡ Graduation courses B. Management.. ‡ Post Graduation courses : Masters & Ph. Medical .. ‡ Professional courses : Engineering. Computer etc.Sc. professional and technical education. Law.D.Com.

etc. ‡ Courses conducted by IIM. ‡ Post ± Graduation ± MCA. MS etc. conducted by Colleges / Universities approved by UGC / Govt. ‡ Courses offered by National Institutes and other reputed Private Institutes. NIFT. IISc. ‡ Courses conducted by CIMA ± London. b) Studies abroad ‡ Graduation ± For job oriented professional / technical courses offered by reputed universities. Credentials of the Educational Institution may be got certified from authenticated sources / Embassy in India.‡ Computer Certificate courses of reputed institutes accredited to Department of Electronics or institutes affiliated to University ‡ Courses like ICWA. CA. IIT. CPA in USA etc . ‡ Evening Courses of approved Institutes. / AICTE / AIBMS / ICMR etc. XLRI. ‡ Courses offered in India by reputed foreign University. CFA etc. ‡ Other Courses leading to Diploma / Degree etc. MBA.

‡ Caution Deposit / Building Fund / Refundable Deposit supported by Institution Bills / Receipts. ‡ Purchase of computers ± essential for completion of the Course. ‡ Student should have secured pass marks in the qualifying Examination for admission to Graduation Courses. ‡ Any other expense required to complete the course ± like study tours. thesis.2(ii)Student eligibility ‡ Should be an Indian National ‡ Secured admission to Professional / Technical courses through Entrance Test / Selection process. ‡ Examination / Library / Laboratory fee. etc . ‡ Secured admission to foreign University / Institutions. ‡ Purchase of books / equipments / instruments / uniforms. ‡ Travel Expenses / Passage money for studies abroad. project work. 2(iii)Expenses considered for Loan ‡ Fee payable to Collage / School / Hostel.

50 lacs.3. 4.00 lacs : Studies in India 5% Studies in Abroad 15% ‡ Scholarship / assistantship to be included in Margin. 4. ‡ Margin may be brought in on year-to-year basis as and when disbursements are made on a pro-rata basis .00 lacs : Nil Above Rs. 4. subject to repaying capacity of the parents / students with margin and the following ceilings :‡ Studies in India Maximum Rs. ‡ Studies abroad Maximum Rs. 15. QUANTUM OF FINANCE Need based finance. MARGIN Upto Rs.00 lacs. 7.

. In addition to above assignment of future income of the student for payment of instalments (stands included in the Agreement). :Upto Rs. 4. 4.00 lacs. Collateral Security of Suitable value (atleast equal to loan amount) or co-obligation of parents / guardian / third party alongwith assignment of future income of the student for payment of instalment may be obtained viz. NOTE : .00 lacs : No Security. However. 4.00 lacs. 4. Above Rs.5. SECURITY No Security may be insisted upon for loans upto Rs. for loans above Rs.00 lacs : Collateral Security of Suitable value (equivalent to 100% of the amount of loan) or co-obligation of parents / guardian / third party.

Bank Deposit in the name of the student parent / guardian or any other third party with suitable Margin. Securities / Public Sector Bonds / Units of UTI.00 lacs PTLR + 1% ‡ The interest to be debited monthly on simple basis during the Repayment holiday / Moratorium period. Gold. the same to be Hypothecated to the Bank. 6. ‡ In case the loan is given for purchase of Computer.00 lacs PTLR Above Rs.The document should be executed by both the student and the parent / guardian. . NSC. Shares / Debentures. RATE OF INTEREST Upto Rs.4. ‡ Wherever the land / building is already mortgaged. LIC Policy. the unencumbered portion can be taken as security an II charge basis provided it covers the required Loan amount.4. ‡ The security can be in the form of land / building / Govt. KVP.

whichever is earlier The loan is to be repaid in 5-7 years after commencement of repayment. 2. 7. extension of time fo . ‡ No application for educational loan received should be rejected without the concurrence of the next higher authority. 8. REPAYMENT Repayment Holiday / Moratorium Course period + 1 year OR 6 months after getting job.Penal interest @ 2% be charged for above Rs. LONING POWERS As per loaning Power Chart in force from time to time . If the student is not able to complete the course within the scheduled time.00 lacs for the overdue amount and overdue period.

capability certificate may be issued in such cases. Interest concession is to be provided to borrowers only at the time of final repayment of the loan. TIME NORMS Loan applications have to be disposed of within a period of 15 days to one month but not exceeding the time norm stipulated for disposing of loan applications under Priority Sector Lending. 9. LOAN APPLICATION . ‡ The accrued interest during the repayment holiday period to be added to the principal and repayment in Equated Monthly Instalments (EMI) be fixed. POST SANCTION FOLLOW UP Branches to contact college / university authorities to send the progress report at regular intervals in respect of students who have availed loans. UPFRONT FEE NIL 11. sanctioning authority may at his discretion consider such extensions as may be deemed necessary to complete the course. For this financial and other supporting documents may be obtained from the applicant. If the student is not able to complete the course for reasons beyond his control. CAPABILITY CERTIFICATE Since. some of the foreign universities require the students to submit a certificate from their bankers about the sponsors solvency / financial capability. 13. with a view to ensure that the sponsors of the students going abroad for higher studies are capable of meeting the expenses till completion of studies. 12. 10. ‡ 1% Interest concession may be provided by Incumbents to lonees if the interest is serviced by them during the study period when repayment holiday is specified for interest / repayment under the Scheme.completion of course may be permitted for a maximum period of 2 years.

16. it should be debited to a separate account opened in the Subsidiary General ledger titled µInterest Accrued on Advances under Education Loan Scheme¶ forming one of the components of the main head of General Ledger. CONFIDENTIAL REPORTS On Borrower(s): No confidential report on the borrower will be required as the application for loan will indicate the information required to be furnished in the confidential report. µInterest Accrued on Advances¶ and credited to Revenue Head Income µInterest on term loan¶ till the commencement of repayment of first instalment. in case of Minor student. . 15. Instead. Further.Form No. on attaining his/her majority confirmation from student be obtained as per Annexure III. Repayment of loan and interest may be determined keeping in view the above procedure for charging of interest. MODE OF APPLICATION OF INTEREST Interest on Education Loan accounts shall be worked out at the end of each month and recorded on a separate sheet in the ledger but not debited to the borrower¶s account. On Guarantor(s) / Co-obligants : Form No. DOCUMENTATION i) Agreement (Annexure -1) duly stamped. to be taken in case where the student is minor. PNB 905 /282(C). 14. the whole amount of interest so far worked out and recorded as above should be debited to the borrower¶s account by corresponding credit to the µInterest Accrued on Advances under Education Loan Scheme¶. PNB 813. On the date fixed for commencement of repayment.

iii) Letter of Guarantee (PNB 785) duly stamped as an Agreement to be taken in case of loan amount is above Rs.ii) Agreement (Annexure ±II) duly stamped . alongwith application forms for Education Loans be provided to intending borrowers. DISBURSEMENT Education loan is to be disbursed in the form of term loan. purchase of stationary and books. 4 lacs. In case of . security etc. is given below :‡ ‡ ‡ Loan application on Bank¶s format. Proof of Address. he will approach the lending office and will explain his needs to the Incumbents Incharge will permit drawing on the borrower¶s account within the limit fixed. Each time the borrowing scholar is in need of funds to pursue his studies. An illustrative check-list enabling a ready reference. iv) In case of collateral security is to be taken is mortgage. CLASSIFICATION Advances allowed under the Scheme will be classified under Priority Sector 19. 17. 18. Passport size photograph. loan may be disbursed in cash on declaration by the applicant and production of bills. The documents should be executed by the student and parent / guardian. procedure given in Book of Instruction on Loans to be followed. ‡ The loan to be disbursed in stages as per the requirement / demand directly to the Institutions / Vendors of Books / equipments / instruments to the extent possible. This will also enable the Incumbent In charge to remain in close touch with the borrowing students¶s activities. a check-list regarding documents. to be taken in case where the student is Major. ‡ LOAN TO BE SANCTIONED BY THE BRANCH NEAREST TO THE PLACE OF DOMICILE OF THE STUDENT. so that intending borrowers can furnish all related documents / papers in one lot. . A limit upto which advance is to be allowed during each year will be set up. CHECK LIST To facilitate expeditious disposal of applications.

4. subsidy received .‡ ‡ ‡ Proof of having secured pass marks in last qualifying examination. are mentioned. Such reports will be required to be produced to the Incumbents Incharge of the lending office before the start of each academic year subsequent to the first year. Examination Fee. Valuation Certificate and Non-encumberance Certificate from approved Lawyer of the Bank. Prospectus of the course wherein charges like Admission Fee. POST SANCTION SUPERVISION The Bank will reserve the right of giving loan under this Scheme to any scholar or continue / discontinue the yearly disbursement to a borrower under the Scheme. technical or vocational courses. amount of loan sanctioned. ‡ In case loan amount is above Rs. Letter of admission in professional. ‡ ‡ Photocopy of Passport & Visa. 20. in case of study abroad.00 lacs : Particulars of Guarantors and details of their Assets & Liabilities. Any other document / information. amount of loan. depending upon whether or not he / she shows good results at the institution he /she has joined for studies and whether of not reports about his / her conduct are satisfactory. Hostel Charges etc. Loan pass book (PNB589) be issued to the borrower containing details such as date of sanction of loan. If immovable property offered as Collateral Security ± copy of Title Deed. depending upon the case and purpose of the loan. ‡ Details of Assets & Liabilities of parents.