Documente Academic
Documente Profesional
Documente Cultură
2015
1. BACKGROUND__________________________________________________________
On the instructions of IBA, Master Circular on Education Loan Scheme was communicated
vide Circular no. HO: Retail:31:2012-13:580 dated: 08.11.2012. The undernoted Circulars
have been issued on the subject scheme.
S. No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Title
Master Circular: Oriental Education Loan
Scheme
Education Loan- Approval of M/s. Jain
International Trade Organization (JITO)
Education Loan Customized Scheme for
NIIT Imperia
Education Loan- Asset Classification of
Restructured Education Loan Accounts
Recovery of Education Loan-Adopting
Reprehensible Practices
Education Loan- Irregularities in Issuing
Financial Capacity Certificate for Submission
to Foreign Universities
Education Loan- Revised Indian Medical
Council (Amendment) Second Ordinance 2013
Education Loan Tie up with NIIT Limited
Education Loan- Reversal of Interest in the
case of Delinquent Education Loans
Oriental
Education
Loan
SchemeModification in Terms w.e.f. 27.08.2014
Education Loan - Introduction of Interest
Switchover Option
Education Loan- Order Passed by Debts
Recovery Tribunal
Modification In Retail Credit Schemes
Modification In Retail Credit Schemesinspection charges
Oriental
Education
Loan
SchemeModification in Terms
Education Loan- Issuance of In-Principle
Sanction Letter
5
6
7
8
9
Title
Oriental Education Loan Scheme for
Vocational courses
Oriental Education Loan Scheme For
Vocational Education & Training
Modification in Oriental Education Loan
Scheme for Vocational Education & Training
Oriental Education Loan Scheme for
Vocational Education & Training Courses
(VEC) - Exclusion from Service Tax
Education Loan- Qualifying Institutions for
Providing Skill Development Vocational
Courses
___________________________________________________________________________
2. CONSOLIDATION OF SCHEME ______________________________________________
To obviate frequent references, the instructions advised through aforesaid Circulars
containing guidelines on Oriental Education Loan Scheme have been consolidated. The
scheme will supersede all the previous circulars. The following schemes are annexed to the
circular.
INDEX:
A) IBA MODEL SCHEME FOR STUDY IN INDIA & ABROAD
B) SALIENT FEATURES OF CATEGORY A & B INSTITUTIONS
C) EDUCATION LOAN SCHEME FOR WORKING PROFESSIONALS FOR PART TIME
COURSES
D) EDUCATION LOAN SCHEME FOR NIIT IMPERIA
E) ORIENTAL EDUCATION LOAN SCHEME FOR VOCATIONAL EDUCATION &
TRAINING
__________________________________________________________________________
2|Page
3|Page
4.
Eligible
1. Approved courses leading to Graduate/ Post Graduate degree
Coursesand 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.
(Amended vide circular no. HO:Retail:49:2014-15:981 dated 17.03.2015)
Note:
5.
circular
no.
HO:Retail:49:2014-15:981
dated
4|Page
Clarification
6.
Eligible
CoursesStudies
Abroad
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)
b)
Education Loan scheme
The student has to clear such exam and shall meet all
expenses related to such English course from his own
sources.
In case of urgency, the applicant may deposit the fee for
the first semester from his/her own sources for pursuing
5|Page
c)
7.
8.
9.
6|Page
2.
3.
4.
5.
10.
11.
Classification
of Advances
Categorization
of Institutes
7|Page
12.
Amount
loan
of
Category A
` 25.00 Lacs
Without
Collateral
Security
Note:
Category B
` 10.00 Lacs
Without
Collateral
Security
Other Institutions
Actual as per fee structure of
Institution on normal terms
and conditions of oriental
education loan scheme
13.
Topup/Second
Loan
circular
no.
HO:Retail:49:2014-15:981
dated
8|Page
14.
Margin
Category
A
NIL
circular
Category
B
NIL
no.
HO:Retail:49:2014-15:981
dated
Other Institutions
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.
9|Page
15.
Rate
Interest
(Floating)
of
Institutions
Rate of Interest
For
Base Rate
Category A
For
BR+0.50%
Category B
OthersUp to ` 4.00 Lacs
General &
Collateral
working
Security in
Professionals
form of one
Third Party
Above Guarantee
` 4.00 100% collateral
Lacs & security in form
of immovable
Upto `
property or any
7.50
other tangible
Lacs
assets like
pledge of
NSCs / UTI /
LIC (Surrender
Value) / PSU
Bonds etc.
Above ` 7.50 Lacs
TL647
BT659
BT657
BR+2.50%
BR+3.00%
BT657
EL01- TL641BR+1.75% Study Study in
in India India
EL02- TL642Study Study
Abroad Abroad BL175
BR+1.75%
BT657
Note:
1) Simple interest during study/moratorium period and thereafter
16.
circumstances.
Intimation of The rate of interest shall be floating with monthly rest subject to
change
in changes in BR/Spread announced by the Bank / RBI from time to
Interest Rate
time.
The borrower shall be deemed to have notice changes in the rate
of interest whenever there are changes in Base Rate (either
increase or decrease) by display of Base Rate on the website of
Bank/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.
In addition, Bank shall have a right to change the spread
(above Base Rate) on reset date.
A condition clause to this effect be also incorporated in sanction
letter.
10 | P a g e
17.
Interest
Switch-over
option
18.
19.
Interest
During
Moratorium
and
study
Period
11 | P a g e
20.
Penal Interest
21.
Process Fee
22.
Primary
Security/
Coobligation
23.
Collateral
Security
Institutions
Loan Limit
Collateral
Security
NIL
NIL
B) For Other
Institutions
a) Loan upto ` No collateral security.
4.00 Lacs
b) Loan above 1. Collateral security in the form of one suitable third party
guarantee, preferably of other family member / close relative.
` 4.00 Lacs &
However, the Regional Head in exceptional cases waive third
upto ` 7.50
party guarantee if satisfied with the net worth/ means of
Lacs
parents who would be executing the documents as joint
borrowers(s).
Note:
Inspite of third party guarantee, if security in shape of immovable
property or any other tangible securities like pledge of
NSCs/UTI/LIC (Surrender Value)/ PSU Bonds etc. is provided
having value equivalent to 100% of loan amount, concession in
rate of interest shall be permitted as detailed at S.No. 17.
(Amended vide circular no. HO:Retail:20:2014-15:426 dated 27.08.2014)
Education Loan scheme
12 | P a g e
C) Other
conditions
24.
Education
LoanIssuance
In-Principle
Sanction
Letter
OR
25.
Prepayment
Penalty
26.
Clarification
on Coobligations:
b) Sanctioning Authority on merits can consider coobligation 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.
27.
Insurance
28.
Repayment
14 | P a g e
29.
Disbursement
15 | P a g e
Note:
30.
Follow-up
monitoring
31.
Asset
Classification
dt:
13.09.2013
&
16 | P a g e
32.
33.
However, in case the education loan account becomes nonperforming assets (NPA), there shall not be any reversal of
interest accrued during the repayment holiday / moratorium
period. (Refer circular no. HO:Retail:47:2013-14:1182 dt: 28.03.2014)
Disposal
of a) Normally the loan shall be disposed off within 15 days of
application,
receipt of duly completed application with supporting
Loan
documents.
Disposal
period
& b) Rejection of loan application, if any, shall be done by referring
punitive
the matter to the next higher authority with valid reasons for
measures
declining the proposal and obtaining their permission. The
status of declined application be conveyed to the student
along-with the reason for rejection. Punitive action shall be
taken in case Branch Managers repeatedly reject education
loan proposal without any valid reason/flimsy ground.
Capability
The branches may issue capability certificate (Financial) for
certificate
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.
(Ref: Circular No. HO:Retail:36:2013-14:908 dated 06.01.2014 )
34.
35.
No
dues The applicant may not be insisted upon to obtain no dues
certificate
certificate. In lieu of this, branches may obtain a
declaration/affidavit that no loan has been taken for this purpose
from other financial institutions.
Discretionary
(` In Lacs)
Powers
Category
For study in India / Abroad
Scale I
7.50
a)
For Scale II
10.00
General
Scale III
15.00
Public
Scale IV
20.00
AGM& RLCC-AGM
25.00
DGM & RLCC-DGM
30.00
GM & RLCC-GM
40.00
HLCC-ED & above
100.00
(Amended vide circular no. HO:Retail:49:2014-15:981 dt: 17.03.2015)
17 | P a g e
b) For
Staff
36.
37.
Clarification
on
sanctioning
powers
38.
Deviation
Manager
39.
40.
Approval
of In case of courses offered by Institutions not approved by the
courses/
concerned statutory regulatory bodies, branches may consider
institutions
loan only if the institution is approved from Head Office by routing
their request for approval through RO on the prescribed Performa
as per Annexure-VII.
The Regional 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
Banks approved list of Educational Institutions.
Private
In case of Private Institutions which conduct courses leading to
institutions
Diplomas / Certificates on Computers, E-Commerce and other Hiwhich
Tech curriculum, the Regional Heads are authorized to
conduct
approve the names of such institutions like APTECH etc.
courses
subject to the condition that the ceiling of the education loan
leading
to amount shall be ` 50000/-.
diplomas/cert
ificates
on 1. NIIT: The NIIT is an approved institution & the education loan
ceiling for courses conducted by it shall be ` 1.75 Lacs.
computers,
Approved courses are Diploma in IT (DIT), Honors Diploma in
e-commerce
IT (HND), ANIIT, GNIIT & Post Graduate certification
and other hiprogramme in Business Analytics (PGCBA).
tech
curriculum
List of NIIT Centres and other guidelines (Refer Circular No.
HO:Retail:46:2013-14:1169 dated 24.03.2014).
2. NIIT Imperia: Limit is Rs. 4.00 lacs (For other details refer
Circular no. HO:Retail:37:2012-13:679 dated: 29.12.2012)
Details are also attached as annexure .
41.
CIBIL
42.
Credit Rating
The PAN detail / Aadhar detail has its value in future tracking of
the student.
For Category A Institutions:
Education loan upto ` 25.00 Lacs may be sanctioned on merit
irrespective of their Rating grade.
19 | P a g e
43.
Appraisal/
Sanction/
Disbursement
20 | P a g e
44.
Grievance
Redressal
Mechanism
45.
46.
47.
Validity
Sanction
21 | P a g e
Category A
` 25.00 Lacs
Category B
` 10.00 Lacs
Rate of Interest
BR= 10.25%
BR+0.50% =10.75%
Margin
Process Fee
Collateral Security
Special Rider
NIL
NIL
NIL
NIL
NIL
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.
22 | P a g e
23 | P a g e
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13
Component
of finance
Loan
Amount
Margin
Rate of
interest
Penal
Interest
Process/
upfront fee
Sanctioning
Authority
Security
Moratorium
period
Repayment
24 | P a g e
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
Particulars
Purpose
Terms
To provide finance for pursuing Part time professional courses
for enhancing skill/ career prospects.
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 parttime basis.
Component 1. Admission fee/tuition fee/Examination fee
of finance 2. Books & Stationery
3. Equipments
Loan
` 4.00 Lacs (maximum)
Amount
Margin
25%
Rate of
Base Rate+ 2.50% p.a. with monthly rest
interest
Penal
2% penal interest over the normal interest rates on the overdue
Interest
amount for irregular period.
Sanctioning
Branch Manager irrespective of the Scale / Category of branch
Authority
Security
NIL
Repayment
5 years OR up to retirement, whichever is earlier.
Moratorium
NIL or upto study period.
period
Process/
NIL
upfront fee
Place
of The loan can be considered at place of domicile or place of
availment
posting / service.
General
e) Salary Certificate along with deductions duly certified by
Conditions
employer shall be obtained and kept on record after verification.
f) Branch Manager 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
months 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.
25 | P a g e
3.
4.
5.
6.
Note:- The bank may consider the higher limit for courses of
duration above 1 year on merit basis. However, HLCC-ED is
Education Loan scheme
26 | P a g e
7.
Security
8.
Rate
Interest
of
Loan
Limit
Rate
of Interest
Free
Scheme
Interest
Table
Code 10
Code
Code
BT657
EL07
TL646
Upto
` BR+2.50%
1.50 Lacs
The rate of interest shall be floating with monthly rest subject to
changes in BR/Spread announced by the Bank / RBI from time
to time.
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:
9.
10.
11.
12.
Margin
Processing
Charges
Prepayment
Penalty
Moratorium
Period
Rate of interest will not fall below Base Rate under any
circumstances.
NIL
NIL
NIL-The borrower may repay the Loan in advance either in full
or in part.
Upon completion of course, repayment will start after the
moratorium period as under:
For courses of duration upto 1 year- 6 months from the
completion of course.
27 | P a g e
13.
14.
15.
16.
Service
Interest
During
Simple Interest shall be charged per month during moratorium
Moratorium
and
study period. When moratorium period is over, the entire outstanding
of the interest amount shall be capitalized i.e. added back to the
Period
principal amount. Further interest shall be charged on monthly
compounding basis; accordingly, EMI shall be fixed and
intimated to the borrower in writing.
Concession If the monthly interest is serviced regularly (monthly basis)
in Rate of during the moratorium period, a concession of 1% in rate of
interest,
if interest be allowed for moratorium period and this concession
monthly
shall be allowed only after expiry of the moratorium period.
accrued
However, while allowing such 1% concession it must be
interest
is ensured that actual recovered interest after allowing concession
served
shall not fall below the base rate of the bank.
during
the
In case of default in servicing the interest, the normal rate of
moratorium
interest as applicable shall be levied and no subsequent
period
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
Deemed
The borrower shall be deemed to have notice of changes in the
Service of
rate of interest whenever there are changes in Base Rate either
Notice in
increase or decrease in interest rates. By display of Base Rate
Case of
on the website of Bank/Notice Board of the Branch or published
change in
in news papers or display on banks website or made through
Base Rate
entries of the interest rate charged in the passbook/statement of
and
consequently account furnished to the borrower and the borrower is liable to
on applicable pay such revised rate of interest.
rate of
interest
Repayment
Loan Limit
Repayment Period
Upto 2 yrs.
Loan upto ` 50000
Loan above ` 50000 and upto ` 1.00 Lac In 2 to 5 yrs.
In 3 to 7 yrs.
Loan above ` 1.00 Lac
(Amended vide circular no. HO:Retail:18:2012-13:349 dated 24.08.12)
17.
18.
28 | P a g e
19.
20.
The insurance premium has to be borne by the student / coborrower. However, sanctioning authority may consider the
premium amount as one of the component of finance, if
requested by student / co-borrower.
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.
Follow-up
The Bank will keep a track record of the student in coordination
monitoring
with the educational institution.
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.
21.
The PAN detail also has its value in future tracking of the
student.
List
of The institutions listed on NSDA website can be viewed at
training
the link - http://www.skilldevelopment.gov.in/content/traininginstitutions
providers
All the Trainees undergoing training with any of these
institutions would be eligible for Vocational Education Loans.
(Refer Circular no. HO:Retail:41:2013-14:1034 dated:07.02.2014)
22.
23.
24.
25.
26.
29 | P a g e
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.
iii.
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 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.
Ques.2
Whether Education Loan for Commercial Pilot Course having duration of less
than one year can be provided or not.
Ans.
30 | P a g e
Ques.3.
Ans.
Ques4.
Ans.
Ques5.
Ans.
Ques6.
Ans.
Ques7.
Ans.
Ques8.
Ans.
31 | P a g e
Ques9.
Whether the repayment period could be extended at the request of the borrower?
Ans.
Ques10.
Ans.
Ques11.
Whether request received for sanction of loan to meet partial cost of studying
abroad can be considered?
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.
Ans.
Ques12.
Ans.
Can the Bank consider request for loan received from NRI?
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.
Ans.
32 | P a g e
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.
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.
Ans.
What are the guidelines for reversal of interest in case of NPA accounts?
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.
33 | P a g e
Annexure-I
S.No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
S.No.
1
2
3
4
5
6
7
8
9
34 | P a g e
35 | P a g e
Annexure-II
List of Approved Education Institutions
S.No
1
2
3
4
5
6
7
8
10
11
12
13
14
15
NIIT
Courses Approved
Diploma in Information & Communication
Technology
All courses
All courses
All courses
All courses
All courses
All courses
All courses
(i) MBA
(ii) M.Tech.
(iii) BBA
(iv) B.Sc.
(v) B.Tech and all the other courses approved
by UGC
(i) Computer Science and Engineering
(ii)Electronics and Communication Engineering
(iii) Information Technology
(iv) Master of Computer Science
(v) M.Tech. in Computer Science (v) MBA
Diploma in IT, Honors Diploma in IT, ANIIT,
GNIIT & Post Graduate certification programme
in Business Analytics (PGCBA)
36 | P a g e
16
LBIIHM - Pitampura
17
18
19
20
21
NIIT Imperia
37 | P a g e
Annexure-III
List of Top 100 Foreign Institutions
S.No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
Foreign Institutions
California Institute of Technology Caltech
Harvard University
University of Oxford
Stanford University
University of Cambridge
Massachusetts Institute of Technology
Princeton University
University of California Berkeley
Imperial College London
Yale University
University of Chicago
University of California Los Angeles UCLA
Swiss Federal Institute of Technology Zurich
Columbia University New York
Johns Hopkins University
University of Pennsylvania
University of Michigan
Duke University
Cornell University
University of Toronto
University College London
Northwestern University
University of Tokyo
Carnegie Mellon University
National University of Singapore
University of Washington
Georgia Institute of Technology
University of Texas Austin
University of Illinois Urbana Champaign
Ludwig Maximilians Universitt Mnchen
University of Wisconsin Madison
University of British Columbia
University of Melbourne
cole Polytechnique Fdrale de Lausanne
London School of Economics and Political Science
University of Edinburgh
University of California Santa Barbara
New York University
McGill University
King's College London
University of California San Diego
Washington University Saint Louis
University of Hong Kong
Karolinska Institute
Australian National University
University of Minnesota
University of North Carolina Chapel Hill
Peking University
Tsinghua University China
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Annexure-IV
In-Principle Letter
(On Banks 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 inprinciple 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
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Annexure-V
_______________________
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 Regional 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
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Existing
Limit
O/S
Proposed
ROI
(Amt. in Lacs)
Margin
Grand Total
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
Classification of
advance
Amount
Purpose
Cost of study
Margin
Rate of interest
Moratorium
Period.
iii.
Repayment of
Interest
Prepayment penalty
i.
ii.
iii.
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Annexure-VI
_______________________
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 - __________________________________ (Borrowers 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
Branch Office ____________
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Date: ________
Name of Borrower
Branch/Region
Date of sanction
Nature of facility
Classification of
advance
Amount
Purpose
Cost of study
Margin
Rate of interest
Tenor Of Course
Education Loan scheme
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Repayment
ii.
Total Repayment
Period
ii.
In ________ equal
moratorium period).
iii.
Moratorium
Period.
iii.
iv.
iv.
Repayment of
Interest
Prepayment penalty
monthly
installments
(including
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 Official be permitted to visit the property to assess the real value of
property before release of loan.
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Branch Manager
Branch Office____________
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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.
2.
3.
4.
5.
6.
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.
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.
That to keep the Bank informed of the happening of any event likely to have a
substantial effect on their income.
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.
That no loan has been taken for this purpose from any bank/financial
institution.
That the borrower will submit performance report from his education institution
at regular intervals.
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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
of the student comes to Banks 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
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Annexure- VII
ORIENTAL BANK OF COMMERCE
REGION _____________________
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
institution
of
the
educational
Constitution
institution
of
the
educational
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- Remarks
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Recommendations
Placement track record of the institution
1.
Name of the companies
where placement has been
made
2.
From Rs.______________
To Rs.________________
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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
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
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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 Banks 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
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