CREDIT SECTION
TO ALL OFFICES
Attention of Incumbents Incharge is invited to loans circulars issued from time to time where in instructions regarding Education Loan Scheme have been advised.
To obviate
cross-references to various Circulars/Circular Letters issued on the above
Scheme, the Scheme has been codified/consolidated. The scheme is conformity with
RBI approved Scheme. The consolidated guidelines
in respect of above Scheme are enclosed as per Annexure.
All
concerned are advised to note the above for meticulous compliance.
(V.P CHOWDHERY)
GENERAL MANAGER
EDUCATION LOAN SCHEME
1. OBJECTIVE
To provide financial
support to deserving/meritorious students for pursuing higher education in India
and abroad. The Scheme aims
at providing financial assistance on reasonable terms to the poor and needy to
undertake basic education and to
the meritorious students to pursue higher, professional and technical education.
a) Studies in India
 | School Education including Plus 2 stage |
| Graduation courses B.A., B.Com., B.Sc., etc. |
| Post Graduation courses : Masters & PH.D. |
| Professional courses : Engineering, Medical, Agriculture, Veterinary, Law, Dental, Management, Computer etc. |
| Computer Certificate courses of reputed institutes accredited to Department of Electronics or institutes affiliated to Universities. |
| Courses like ICWA, CA, CFA etc. |
| Courses conducted by IIM, IIT, IISc, XLRI, NIFT, etc. |
| Courses offered in India by reputed foreign Universities |
| Evening Course of approved Institutes |
| Other Courses leading to Diploma/Degree etc. conducted by Colleges/Universities approved by UGC/Govt./AICTE/AIBMs/ICMR etc. |
| Courses offered by National Institutes and other reputed Private Institutes. |
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.
| Post Graduation – MCA, MBA, MS etc. |
| Courses conducted by CIMA – London, CPA in USA etc. |
2(ii) Student eligibility
| Should be an Indian National |
| Secured admission to Professional/Technical Courses through Entrance Test / Selection process |
| Secured admission to foreign University/Institutions. |
| Student should have secured pass marks in the qualifying Examination for admission to Graduation Courses. |
2(iii) Expenses considered for Loan
| Fee payable to College/School/Hostel |
| Examination/Library/Laboratory fee |
| Purchase of books/equipments/instruments/uniforms |
| Caution Deposit/Building Fund/Refundable Deposit supported by Institution Bills/Receipts |
| Travel Expenses/Passage money for studies abroad |
| Purchase of computers – essential for completion of the course |
| Any other expense required to complete the course – like study tours, project work, thesis etc. |
3. QUANTUM OF FINANCE
Need
based finance, subject to repaying capacity of the parents/students with margin
and the following ceilings
Studies in India Maximum Rs.7.50 lacs
Studies abroad Maximum Rs.15 lacs
4
MARGIN
Upto Rs.4 lacs Nil
Above Rs.4 lacs Studies in India 5%
Studies Abroad
15%
| Scholarship/assistantship to be included in Margin. |
| Margin may be brought in on year to year basis as and when disbursements are made on a pro rata basis. |
5. SECURITY
No
security may be insisted upon for loans upto Rs.4 lac.
However, for loans above Rs.4 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.
NOTE :
·
The document should be executed by
both the student and the parent/guardian.
·
The security can be in the form of
land/building/Govt. Securities/Public Sector Bonds/Units of UTI, NSC, KVP, LIC
Policy, Gold, Shares/Debentures, Bank Deposit in the name of the
student/parent/guardian or any other third party with suitable Margin.
·
Wherever the land/building is
already mortgaged, the unencumbered portion can be taken as security on II
charge basis provided it covers the required Loan amount.
·
In case the loan is given for
purchase of Computer, the same to be Hypothecated to the bank.
The Chairman can
relax the security norms in case of meritorious/deserving students .
6. RATE OF INTEREST
Upto
Rs.4 lacs
11.25%
Above
Rs.4 lacs
12.25%
·
The interest to be debited monthly
on simple basis during the Repayment holiday/Moratorium period.
·
Penal interest @ 2% be charged for
above Rs.2 lacs for the overdue amount and overdue period.
7 LOANING
POWERS
As
per loaning power chart in force from time to time.
8. REPAYMENT
|
Repayment Holiday/Moratorium |
Course period + 1 year OR 6 Months after getting job, whichever is earlier. |
The loan is to be repaid in 5-7 years after commencement of repayment. If the student is not able to complete the course within the scheduled time, extension of time for completion of course may be permitted for a maximum period of 2 years. If the student is not able to complete the course for reasons beyond his control, sanctioning authority may at his discretion consider such extensions as may be deemed necessary to complete the course.
| The accrued interest during the repayment holiday period to be added to the principal and repayment in Equated Monthly Instalments (EMI) be fixed. |
| 1% Interest concession may be provided by Incumbents to loanees if the interest is serviced by them during the study period when repayment holiday is specified for interest/repayment under the Scheme. |
Interest concession is to be provided to borrowers only at the time of final repayment of the loan.
9. 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.
10 UPFRONT FEE
NIL
11 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.
12 CAPABILITY CERTIFICATE
Since, some of the foreign universities require the students to submit a certificate from their bankers 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 expenses till completion of studies, capability certificate may be issued in such cases. For this financial and other supporting documents may be obtained from the applicant.
13. 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. Instead, it should be debited to a separate account opened in the Subsidiary General Ledger titled ‘Interest Accrued on Advances under Education Loan Scheme’ forming one of the components of the main head of General Ledger’ Interest Accrued on Advances and credited to Revenue Head Income ‘Interest on term loan’ till the commencement of repayment of first instalment. On the date fixed for commencement of repayment, 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 Interest Accrued on Advances under Education Loan Scheme. Repayment of loan and interest may be determined keeping in view the above procedure for charging of interest.
14 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. |
| On Guarantor(s) / Co-obligants : Form No.PNB905/282C |
15 DOCUMENTATION
i) Agreement (Annexure – I) duly stamped, to be taken in case where the student is minor. Further, in case of Minor student, on attaining his/her majority confirmation from student be obtained as per Annexure –III.
ii) Agreement (Annexure – II) duly stamped, to be taken in case where the student is major.
iii) Letter of Guarantee (PNB 785) duly stamped as an Agreement to be taken in case of loan amount is above Rs.4 lacs.
iv) In case of collateral security is to be taken is mortgage, procedure given in Book of Instruction on Loans to be followed.
The documents should be executed by both the student and the parent/guardian.
16 DISBURSEMENT
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 explain his needs to the Incumbents Incharge. On being satisfied about the genuineness of the needs and the purpose for which money is needed by the borrower, the Incumbent Incharge will permit drawing on the borrower’s account within the limit fixed. This will also enable the Incumbent Incharge to remain in close touch with the borrowing students activities.
| 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. |
| LOAN TO BE SANCTIONED BY THE BRANCH NEAREST TO THE PLACE OF DOMICILE OF THE STUDENT |
In case of, purchase of stationery and books, loan may be disbursed in cash on declaration by the applicant and production of bills.
17. CLASSIFICATION
Advances allowed under the Scheme will be classified under Priority Sector.
18. CHECK LIST
To facilitate expeditious disposal of applications, a check list regarding documents, security etc. alongwith application forms for Education Loans be provided to intending borrowers. An illustrative check-list enabling a ready reference, so that intending borrowers can furnish all related documents/papers in one lot, is given below:
Ø Loan application on Bank’s format (Form No.PNB 813)
Ø Passport size photograph
Ø Proof of Address
Ø Proof of Age
Ø Proof of having secured pass marks in last qualifying examination.
Ø Letter of admission in professional, technical or vocational courses.
Ø Prospectus of the course wherein charges like admission Fee, Examination Fee, Hostel Charges etc. are mentioned.
Ø Details of Assets & Liabilities of parents.
Ø In case loan amount is above Rs.4 lacs.
· Particulars of Guarantors and details of their Assets & Liabilities
· If immovable property offered as Collateral Security – copy of Title Deed, Valuation Certificate and Non encumbrance certificate from approved Lawyer of the Bank.
Ø Photocopy of Passport & Visa, in case of study abroad.
Ø Any other document/information, depending upon the case and purpose of the loan.
19 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, depending upon whether or not he/she shows good results at the institution he/she has joined for studies and whether or not reports about his/her conduct are satisfactory.
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.
Loan pass book be issued to the borrower containing details such as date of sanction of loan, amount of loan sanctioned, subsidy received (if any) rate of interest, amount due under each instalment, due date of instalment etc.
Loan application on Bank’s format (PNB 813)
21 OTHER CONDITIONS
No Due Certificate need not be insisted upon as a pre condition for considering education loan. However, branches may obtain a declaration/an affidavit confirming that no loans are availed from other banks.
22 Education Loan upto the ceilings of Rs.7.50 lacs for studies in India and Rs.15 lacs for studies abroad respectively will be reckoned under priority sector advances.
23 The above Education Loan Scheme is also applicable to the employees of RRBs.
(To be taken in case where the student is minor)
AGREEMENT FOR
EDUCATION LOAN
This Agreement is made at ________________ on this __________ day of _______ 20_____ between Shri/Smt_________________________, son/wife of Shri_____________________ r/o ____________________________ (hereinafter referred to as parent/guardian) Sh./Kumari ______________________ minor aged ____________ years (date of birth ______________) s/o / D/O Sh./Smt._________________ r/o______________ (hereinafter referred to as ‘student’), represented by his/her natural/court guardian Sh./Smt.______________ (both parent/guardian and student are collectively called the ‘borrowers’ which expression shall unless repugnant to context include his/her heirs, executors, administrators and assigns) of the One Part and Punjab Gramin Bank a body corporate constituted under notification 13 issued by President of India on 26.09.1975 and Published in the Gazette of India Notification No.67 dated 26.9.1975 and established a Regional Rural Bank under RRB Act,1975, carrying on banking business and having its head Office at Jalandhar Road, Kapurthala and amongst other a branch office at ___________ (hereinafter called the ‘bank’ which term shall unless repugnant to context include its successors & assigns) of the Other Part.
WHEREAS
a) Sh./Smt______________________________ (parent/guardian) represents that his/her ward Sh/Kumari ____________________ (hereinafter called the student) is desirous of pursuing/continuing his/her studies at ______________________ for a period of __________ but is unable to do so due to paucity of funds.
AND
b) The Borrowers have, with a view to receiving the financial assistance for studies of his/her ward, applied to the Bank for a loan of Rs._______________ (Rupees________________) which the bank has agreed to grant on terms and conditions herein after appearing.
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1. The total amount of the loan amounting to Rs.___________ will disbursed by the bank to the borrowers as under :
2. The amount of the loan will be utilized by the borrowers only for the purpose of persecuting studies of the ‘student’, such as payment of fee payable to college / school / hostel, examination/library/laboratory fee, purchase of books/equipment/ instruments/uniforms, caution deposit/building fund/refundable deposit/supported by institution bills/receipts, travel expenses/passage money for studies abroad, purchase of computers-essential for completion of the course, any other expenses required to complete the course like study tours, project work, thesis etc.
3. 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. If the said certificate is not produced or the certificate furnished for any year is not considered satisfactory the bank 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. The bank will be entitled at its option to recall the loan already, given together with the interest accrued thereon, by a demand in writing.
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4. The borrowers will secure the loan by providing a suitable surety and unless he has furnished the same he will not avail the loan or any part thereof.
5. The interest on the loan will be payable at the rate of ____% with ____ rest. Provided that the interest payable by the borrowers shall be subject to change in interest rates made by RBI/Bank from time to time.
6. Subject to what is provided in para 3 above, the borrowers will repay the loan together with interest accrued thereon by equal monthly instalments in ____ years after commencement of the repayment i.e. one year after the course period or 6 months after getting job, whichever is earlier. The extension 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 bank.
7. In the event of death of any of the borrowers, the bank shall be entitled not only not to disburse further loan but also recall the outstanding under the loan already disbursed, irrespective of the instalments fixed.
8. The borrowers will, during the period of their indebtedness to the bank, keep the bank informed of the change in their address, vocation and income from time to time.
9. The student borrower undertakes to remit and if need be, give instructions/ authorization to his/her employer to remit, the salary to the extent necessary or even more, if the borrower so desires, to the account of the borrower.
In witness whereof the parties to these presents have set their hands on the day, month and year first mentioned above.
For self and as natural guardian/guardian of
Sh./Kumari__________________________
BORROWER
FOR PUNJAB GRAMIN BANK
(Authorized Signatory)
(To be taken in case where the student is major)
ANNEXURE II
AGREEMENT FOR
EDUCATION LOAN
This Agreement is made at ________________ on this __________ day of _______ 20_____ between Shri/Smt/Kumari ___________________, son/daughter of Shri________________ r/o ____________________________ (hereinafter referred to as student) and Sh./Smt. ______________________ son/daughter of Sh. _________________ r/o______________ (hereinafter referred to as ‘parent’) (parent and student collectively hereinafter called the borrower which expression shall unless repugnant to context include their heirs, executors, administrators and assigns) of the One Part and Punjab Gramin Bank a body corporate constituted under notification 13 issued by President of India on 26.09.1975 and Published in the Gazette of India Notification No.67 dated 26.9.1975 and established a Regional Rural Bank under RRB Act,1975, carrying on banking business and having its head Office at Jalandhar Road, Kapurthala and amongst other a branch office at ___________ (hereinafter called the ‘bank’ which term shall unless repugnant to context include its successors & assigns) of the Other Part.
WHEREAS
a) The Student and parent (Borrowers) represent that Sh/Kumari __________________ (student) is desirous of pursuing/continuing his/her studies at ___________________ for a period of __________ but is unable to do so due to paucity of funds.
AND
b) The Borrowers have, with a view to receiving the financial assistance for studies of his/her studies, applied to the Bank for a loan of Rs._______________ (Rupees________________) which the bank has agreed to grant on terms and conditions herein after appearing.
1.
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2. The amount of the loan will be utilized by the borrowers only for the purpose of persecuting studies of the ‘student’, such as payment of fee payable to college / school / hostel, examination/library/laboratory fee, purchase of books/equipment/ instruments/uniforms, caution deposit/building fund/refundable deposit/supported by institution bills/receipts, travel expenses/passage money for studies abroad, purchase of computers-essential for completion of the course, any other expenses required to complete the course like study tours, project work, thesis etc.
3. 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. If the said certificate is not produced or the certificate furnished for any year is not considered satisfactory the bank 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. The bank will be entitled at its option to recall the loan already, given together with the interest accrued thereon, by a demand in writing.
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4. The borrowers will secure the loan by providing a suitable surety and unless he has furnished the same he will not avail the loan or any part thereof.
5. The interest on the loan will be payable at the rate of ____% with ____ rest. Provided that the interest payable by the borrowers shall be subject to change in interest rates made by RBI/Bank from time to time.
6. Subject to what is provided in para 3 above, the borrowers will repay the loan together with interest accrued thereon by equal monthly instalments in ____ years after commencement of the repayment i.e. one year after the course period or 6 months after getting job, whichever is earlier. The extension of the repayment period, if the borrowers are not able to complete the course for reasons beyond his/her control, will be in the absolute discretion of the bank.
7. In the event of death of any of the borrowers, the bank shall be entitled not only not to disburse further loan but also recall the outstanding under the loan already disbursed, irrespective of the instalments fixed.
8. The borrowers will, during the period of his indebtedness to the bank, keep the bank informed of the change in his address, vocation and income from time to time.
In witness whereof the parties to these presents have set their hands on the day, month and year first mentioned above.
______________________
______________________
BORROWER
FOR PUNJAB GRAMIN BANK
(Authorized Signatory)
ANNEXURE III
Date ___________________
The Manager
Punjab Gramin Bank
BO:_____________________
Dear Sir,
Reg: MY EDUCATION LOAN FOR RS.______________
I write to confirm that you were pleased to grant Education Loan of Rs.___________ to me, represented by my guardian, Shri/Smt.______________________________ for my education. My said guardian executed the required loaning documents in your favour in consideration of the said loan.
I inform you that I have attained majority on ______________ and request you to disburse the remaining amount of loan of Rs.__________ to me out of the loan agreed to be granted by you. I am ready and willing to execute any further documents in your favour for the said loan, if so required by you. I also confirm that the amount of loan of Rs._____________ already disbursed to my said guardian during my minority has been availed of my said guardian for my benefit and the same is binding on me and I agree to repay the same with interest as agreed.
I further undertake that I will repay the loan amount granted by the bank for my education, in terms of the agreement dated _____________ as executed by Shri/Smt._________________, my parents/guardian representing me, interalia from out of my future income and if need be, I will give instructions/authorization to my employer to remit the salary to the extent necessary or even more.
I will keep the bank informed of my address and my profession/employment from time to time.
Yours faithfully,
______________________
(Borrower)
Address:________________________