An Analysis on Education Loan.

A Project Report On
“AN ANALYSIS ON EDUCATIONAL LOAN ”
For

Shikshak Sahakari Bank Ltd., Nagpur
Conducted by

Mr.Akash. K .Kamlakar Student, MBA-II
For partial fulfillment of Masters of Bussiness Administration (2010-2012) Of University of pune

Under the Guidance of

Prof. Supriya Lakhangaonkar Faculty Member Finance SINHGAD INSTITUTE OF TECHNOLOGY AND SCIENCE Narhe, Pune - 411041.

JULY 2011

ACKNOWLEDGEMENT

It gives me immense pleasure in presenting the project report on “AN ANALYSIS ON EDUCATION LOAN ” as a part of my summer internship at “ SHIKSHAK SAHAKARI BANK LTD. ” I express my gratitude to my external guide Mr. P.K.PURANIK, C.E.O of the bank for giving me an opportunity to work with them. My special thanks to him and his team for guiding me through this project on various intrinsic of Loan. The credit of successful completion of this project also goes to the invaluable cooperation, encouragement and support provided by each and every member of the loan department. I would like to thanks all the loan department personnel for making this summer internship a learned and memorable one. As a student of SINHGAD INSTITUTE OF TECHNOLOGY AND SCIENCE, PUNE, I would first of all like to express my gratitude to my Director PRACHI SUPRIYA PARGAONKAR as well as my internal guide Prof. for her unconditional guidance, LAKHANGAONKAR

cooperation and moral support throughout my summer project.

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EXECUTIVE SUMMARY

Education is the most important investment one makes in life. Higher studies and specialization in certain fields call for additional financial support from time to time. Student’s future education plans are supported with the availability of the educational loans that secures one’s life. There are years when students strived hard with the learning activities without any external support with financial issues. Educational loans were much in demand that hardly few lucky students could avail them, but now the condition has turned upside down. Today students can apply for loans from various sources which are obtained easily without much strain. There are several funds being kept aside for student’s welfare education and development based on their family income background and backups. The Educational Loan Scheme outlined below aims at providing financial support from the banking system to deserving/ meritorious students for pursuing higher education in India and abroad. The main emphasis is that every meritorious student though poor is provided with an opportunity to pursue education with the financial support from the banking system with affordable terms and conditions. No deserving student is denied an opportunity to pursue higher education for want of financial support.

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Table of Contents
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Introduction. Introduction To Student Education Loan. Organisational Profile. RBI Guidelines for Education Loan. New RBI Guidelines. SSB Education Loan Scheme. Research Methodology. Data Analysis. Findings. Suggestions & Recommendations. Conclusions. Annexure – I,II,III Bibliography. 8-10 11-13 14-18 19-32 33-35 36-50 51-56 57-61 62-63 65-66 66 67-75 77

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INTRODUCTION

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. You certainly can’t let lack of resources impede you from advancing your prospects through education. Then you accidentally stumble upon the word ‘education loans’. Loans 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. Education loans can realize your education plans or the education plans of your children. You can strengthen you own future and the future of your son or daughter with education loans. An extensive range of student and parent loans are presented under the category of education loans. There are many types of education loans. Discerning about the types of education loans will help you in making the accurate decision. The single largest resource of education loans is federal loan. The two main federal education loan programs are the Federal

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Family Education Loan Program and the Federal Direct Loan Program. In the Federal Family Education Loan Program the bank, credit union or the school is the lender. While the federal direct loans program, the department of education is the lender. Private education loans are offered to people so that they can provide financial backup to their education plans. Private education loans are not endorsed by other government agencies but are provided by other financial institutions. Private education loans program are optimum for both undergraduate and graduate studies. Formal education is requisite for future success. Though this is not a hard and fast rule, but education certainly helps you in gaining an upper hand. With universities getting expensive day by 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 working towards your degree, you are constantly plagued about paying for the education fees, books, and other living expenses. Education loans can provide funding for tuition fees, board and room, books, computer and even student travel. An education loan can help you with all these expenses. Education loans are sufficient enough to take care of all these expenses. If you have been forced to drop your education for any reason, you can still take up your education at any point of time. Irrespective of your age and also where you have left your education. There are no specific eligibility criteria for education loans. Any person who is in need of sponsorship for education can find an education loan that fits his or her financial necessity. Loan amount on education loans vary with the kind of education you want to pursue. The repayment options with education loans will similarly accommodate your personal financial preferences. You can either repay interest amount while still in school or six
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months after graduation. Education loans offer up to ten years for repayments. The refund alternatives on education loans also include deferment, forbearance and consolidation. The 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. However, an education loan like every loan is a huge financial obligation. An education loans is generally the first substantial loan for most people and therefore the first major expense. Do not be completely dependent on your education loans for the funding of your complete education. Try to apply for any other financial sustenance like university grants, scholarships, fellowships, work study programs and any other form of aid. This will certainly encourage a fluid dispensation of your education loans. You can start by going to the financial aid office in your school or university. It will provide you further insight to the kind of education loans, you must apply for. Education is an experience of life. It 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. The payoff is delicious in terms of improved quality of life. Education is expensive! Is it? With education loans it can’t be. Now, you don’t have to take the road in front of you. Make your own road with education loans.

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STUDENT EDUCATION LOAN ANALYSIS

Student loans come in many different flavors, with loans tailored for students with exceptional need, and loans for the needs of average students. There are even loans specifically designed for medical students. It is easy to know how a student would feel overwhelmed with so many education financing options. But like anything else in life, there's a solution to the madness. And with only a little understanding of the positives and negatives of each loan type, students and their parents can see more clearly the options which are best suited for an individual student's needs. Of all student education loan options, usually the one with the most attractive terms could be the Perkins Loan. Perkins Loans have an incredibly low, fixed interest rate of 5 percent. These loans also provide a prolonged "grace period" - the time allowed after leaving school before payment is required. Perkins Loans offer a 9-month grace period. Your Perkins Loan may also arrange Loan Cancellation, which could pay back a portion, or all, of the student loan. Federal Loan Cancellation is offered to graduates who accept to work in high-need areas, like agreeing to teach in the designated low-income school.

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The problem with Perkins Loans is that they're unavailable for all of us - these loans are made for students with "exceptional need." If Perkins Loans are not a choice in your case, then Stafford Loans are the next best thing. Stafford Loans offer benefits similar to Perkins Loans, with apr currently running in the five to seven percent neighborhood - still affordable, as loans go nowadays. Like Perkins Loans, Stafford loans do not require repayment until when you finally leave school or drop below half-time student. They also have a "grace period" of six months before payments must begin. Stafford Loans are offered from the us government, and are also offered through the use of a private lending institution. Depending on the college you'll attend, you may have the option of taking either a direct federal Stafford Loan, or taking the same loan by using a private lending institution as an intermediary. With some schools you could have both options. Regarding private lenders, certain colleges sometimes have specific institutions that they regard as 'preferred lenders,' but remember that you have the right to seek your personal private lender for a Stafford Loan. If you discover that grants, scholarships, and federal student loans don't cover your requirements, private student loans are always an alternative. Private student loans are a good value, but they generally feature slightly higher interest rates than their federal counterparts, and these rates are actually variable. Because private student loans aren't federally-backed, you'll likely find that you will need someone, for example a parent, to co-sign for you. Even if your credit allows you to secure financing alone, having a cosigner is an extremely wise choice, since this tends to decrease your loan's interest rate. Lowering this interest rate, even by a small piece of a
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percent, could make an important difference in lowering the total amount of money you will have to repay on the loan. Unlike federal loans, private student loans may require that you start making monthly premiums while still in education.

These payments could possibly be in some reduced form on this time, just like an interest-only payment. Even when your particular loan doesn't require any kind of repayment while in school, it's still a good idea to send what you can, when you can. Even small irregular payments, made ahead of time, can have a huge relation to lowering the sum of amount you'll have to repay. Student loans, especially the federally-backed versions, are a great value for students and their parents when other funding options aren't enough. It's true that the many different kinds of student loans can be confusing to sort through. But more loan options means you're much more likely get a fit that is better for your personal specific needs. By having a basic knowledge of the several education financing possibilities, it is going to be less difficult to get the fit that's best for you.

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ORGANISATIONAL PROFILE

“ Shikshak Sahakari Bank Ltd ” was established on 1st January 1979 by Adv.Shankarao Padhyaji. There is a small story behind establishment of this bank. It is as follows,“Once a teacher borrowed money from a creditor for his daughter’s marriage and failed to return the money on the agreed date. The creditor use to come everyday and use to abuse the teacher. Oneday as ususal he reached the teacher’s house and abused the teacher very badly in front of his whole family and said, “Master today evening I want my money back, if you can’t give me the money then send your younger daughter in my house tonight.
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The teacher felt ashamed and guilty after this incident. He went to the village well and committed suicide by hanging inside the well. This incident took place on 2nd Octomber 1975. The main aim of “Shikshak Sahakari Bank Ltd” is to give respect to the teacher’s and was established on 1st Jan 1979. The name “Shikshak” was given in the loving memory of Dr.Sarvapalli Radhakrishan. Shikshak Sahakari Bank Ltd is operating with 17 branches in Nagpur City, with 3804 members and 622 working members. All our branches and administrative offices throughout the city sponsors and participates in large number of welfare activities and social causes. Our business is more than banking because we touch the lives of people anywhere in many ways. The Corporate Accounts Group is a Strategic Business Unit of the Bank set up exclusively to fulfill the specialized banking needs of top corporates in the city. The Bank is actively involved since 1979 in non-profit activity called Community Services Banking. The bank is entering into many new businesses with strategic tie ups – Pension Funds, General Insurance, Custodial Services, Private Equity, Mobile Banking, Point of Sale Merchant Acquisition, Advisory Services, structured products etc – each one of these initiatives having a huge potential for growth. Total number of customers as on 2009-10 is
90,590.

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MISSION & VISION

OUR MISSION:
"To provide superior, proactive banking services to niche markets globally, while providing cost-effective, responsive services to others in our role as a development bank, and in so doing, meet the requirements of our stakeholders".

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OUR VISION:
"To become the bank of choice for corporate, medium businesses and up market retail Customers and to provide cost effective developmental banking for small business, mass Market and rural markets.

OBJECTIVE OF THE STUDY
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• Release of large amounts of Funds for Educational Loans. • Educational loan scheme are designed to provide better Educational opportunities

to all types of education. The main objective of providing loan is for pursuing studies in Recognized school/colleges/institutes to meet: • • •
•

Tuition and other fees. Maintenance cost, books, equipments,etc. Cost of passage (for studies abroad). Caution fund/building.

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RBI GUIDELINES FOR EDUCATION LOAN
Revised model educational loan scheme for pursuing higher studies in India and abroad.

1. INTRODUCTION: Education is central to the Human Resources Development and empowerment in any country. National and State level policies are framed to ensure that this basic need of the population is met through appropriate public and private sector initiatives. While government endeavour to provide primary education to all on a universal basis, higher education is progressively moving into the domain of private sector. With a gradual reduction in government subsidies higher education is getting more and more costly and hence the need for institutional funding in this area. The scope of education has widened both in India and abroad covering new courses in diversified areas. Development of human capital is a national priority and it
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should be the endeavour to all that deserving student who denied opportunity to pursue higher education due to financial support. Loans for education should be seen as an investment for economic development and prosperity. Knowledge and information would be the driving force for economic growth in the coming years. Based on recommendations made by a Study Group, IBA had prepared a Model Educational Loan Scheme in the year 2001 which was advised to banks for implementation by Reserve Bank of India vide circular

No.RPCD.PLNFS.BC.NO.83/06.12.05/2000-01 dated April 28, 2001 along with certain modifications suggested by the Government of India. In line with the announcement made by the Hon'ble Finance Minister in his Budget Speech for the year 2004-05, IBA had communicated certain changes in the security norms applicable to educational loans with limits above Rs.4 lakhs and up to Rs. 7.5 lakhs. We have been receiving enquiries from members seeking clarifications on the various provisions of the scheme based on feedback received from the branches. With a view to ensure that the scheme is implemented in letter and spirit, it was decided to review the scheme and make modifications in the scheme to facilitate smooth operation at bank branches. Towards this, a Working Group of General Managers drawn from select banks was constituted at IBA. This revised model scheme has been prepared based on the suggestions made by the Group.

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2. OBJECTIVE OF THE SCHEME :
The Educational Loan Scheme outlined below aims at providing financial support from the banking system to deserving/ meritorious students for pursuing higher education in India and abroad. The main emphasis is that every meritorious student though poor is provided with an opportunity to pursue education with the financial support from the banking system with affordable terms and conditions.

3.APPLICABILITY OF THE SCHEME: The scheme detailed below could be adopted by all Commercial Banks. The scheme provides broad guidelines to the banks for operationalising the educational loan scheme and the implementing bank will have the discretion to make changes suiting to the convenience of the students/ parents to make it more customer friendly.

The scheme details are as under :

4. ELIGIBILITY CRITERIA :
 Student eligibility: • Should be an Indian National

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•

Secured admission to professional/ technical courses in India or Abroad through Entrance Test/ Merit Based Selection process.

 Courses eligible • Studies in India: (Indicative list)
• Graduation courses : BA, B.Com, B.Sc., etc.

• Post Graduation courses : Masters & Phd.

PROFESSIONAL COURSES :
• Engineering, Medical, Agriculture, Veterinary, Law, Dental, Management, Computer etc. • Computer certificate courses of reputed institutes accredited to Dept. of Electronics or institutes affiliated to university. •
•

Courses like ICWA, CA, CFA etc. Courses conducted by IIM, IIT, IISc, XLRI. NIFT etc. Regular Degree/Diploma courses like Aeronautical, pilot training, shipping etc.,

approved by Director General of Civil Aviation/Shipping, if the course is pursued in
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India. In case the course is pursued abroad, the Institute should be recognized by the competent local aviation/shipping authority. Courses offered in India by reputed foreign universities. Evening courses 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 institutions. Banks may have the system of appraising other institution courses depending on future prospects/ recognition by user institutions. Courses, which are not covered under the criteria mentioned above, individual banks may take a view to consider extending education loan under the scheme taking into account the future prospects/recognition by user institution.



Studies abroad :Graduation : For job oriented professional/ technical courses offered by reputed universities.

•

• •

Post graduation: MCA, MBA, MS, etc. Courses conducted by CIMA- London, CPA in USA etc.

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

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, subject to the condition that the amount does not exceed 10% of the total tuition fees for the entire course. Travel expenses/ passage money for studies abroad. Purchase of computers - essential for completion of the course. Insurance premium for student borrower. Any other expense required to complete the course - like study tours, project work, thesis, etc.

5. 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.10.00 lacs. Studies abroad - Maximum Rs.20 lacs

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6. 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.

7. SECURITY :
Upto Rs 4 lacs Co-obligation of parents. No security: Above Rs.4 lacs and upto Rs7.5 lakhs Co-obligation of parents together with collateral security in the form of suitable third party guarantee. The bank may, at its discretion, in exceptional cases, waive third party guarantee if satisfied with the net-worth / means of parent/s who would be executing the document as "joint borrower". Above Rs.7.5 lakhs Co-obligation of parents together with tangible collateral security of suitable value, along with the assignment of future income of the student for payment of installments

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Note:The loan documents should be executed by the student and the parent/ guardian as jointborrower. The security can be in the form of land/ building/ Govt. securities/ Public Sector Bonds/Units of UTI, NSC, and KVP, life policy, gold, shares/mutual fund units/debentures, bank deposit in the name of 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 second charge basis provided it covers the required loan amount. In case the loan is given for purchase of computer, the computer has to be hypothecated to the Bank.

8. RATE OF INTEREST :
Upto Rs 4 lacs BPLR Above Rs. 4 lacs BPLR + 1% Simple interest to be charged during the Repayment holiday/ Moratorium period. Penal interest to be charged as applicable to individual banks.

9. APPRAISAL / SANCTION/ DISBURSMENT :
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In the normal course, while appraising the loan the future income prospects of the student will be looked into. However, where required, the means of parent / guardian could also be taken into account to evaluate re-payment capability. The loan to be sanctioned as per delegation of powers preferably by the Branch nearest to the place of residence of parents. No application for educational loan received should be rejected without the concurrence of the next higher authority. 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.

10. REPAYMENT:
Repayment holiday/Moratorium Course period + 1 year or 6 months after getting job, whichever is earlier.The loan 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.
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The accrued interest during the repayment holiday period to be added to the principal and repayment in Equated Monthly Instalments (EMI) fixed. 1% interest concession may be provided for loanees if the interest is serviced during the study period when repayment holiday is specified for interest/ repayment under the scheme.

11. INSURANCE
Banks may arrange for life insurance policy on the students availing Educational Loan. Individual Banks may work out the modalities with insurance companies

12. FOLLOW UP/TRACKING:
Banks to contact college/ university authorities to send the progress report to the bank at regular intervals in respect of students who have availed loans. In case of studies abroad, bank may obtain the Unique Identification Number (UIN)/Identity Card and note the same in the bank's records.

13. PROCESSING CHARGES
No processing/ upfront charges may be collected on educational loans for studies in India.
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14. CAPABILITY CERTIFICATE:
Banks can also issue the capability certificate for students going abroad for higher studies. For this purpose financial and other supporting documents may be obtained from applicant, if required.

(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.)

15. OTHER CONDITION:

A. MERITORIOUS STUDENTS

Banks which wish to support highly and exceptionally meritorious/ deserving students without security may delegate such powers to a fairly higher level authority.
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B. MULTIPLE LOANS In case of receipt of application for more than one loan for student borrower from a family, the 'family' as a unit has to be taken into account for considering the loan and security taken in relation to the total quantum of finance disbursed, subject to margin and repaying capacity of the parent/student.

C. MINIMUM AGE There is no specific restriction with regard to the age of the student to be eligible for education loan.

D. CHANGE OF ADDRESS In cases of student staying with parents and where such parents have transferable jobs or there is change in address, the bank may provide in the system of noting the ‘address for correspondence' for tracking purpose.

E. TOP UP LOANS

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Banks may consider top up loans to students pursuing further studies within the overall eligibility limit, with appropriate re-schedulement, subject to taking required security.

F. CO-OBLIGATOR The co-obligator should be parent(s)/guardian of the student borrower. In case of married person, co-obligator can be either spouse or the parent(s)/parents-in-law .

No Due Certificate- No due certificate need not be insisted upon as a pre-condition for considering educational loan. However, banks may obtain a declaration/ an affidavit confirming that no loans are availed from other banks.

Disposal Application- Loan applications have to be disposed of within a period of 15 days to 1 month, but not exceeding the time norms stipulated for disposing of loan applications under priority sector lending.

Flexibility in terms-In order to bring flexibility in terms like eligibility, margin, security norms, and banks may consider relaxation in the norms on a case-to-case basis delegating the powers to a fairly higher level authority.

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NEW GUIDELINES BY RBI
Reserve Bank of India's (RBI) guidelines regarding interest rates, etc and make only minor modifications and extend loans to the student community. According to a recent
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report that appeared in the Business Line (Hindu Group) about 80% of Education Loans provided by the banks are for domestive requirements. And the rest made the financial assistance lent to students wanting to study abroad. The Government of India in consultation with the Reserve Bank of India and the Indian Bankers Association has drawn up a elaborate and comprehensive Education Loan Scheme. The objective of this scheme is to ensure that no deserving candidate is deprived of education that he/she deserves at any level. Broadly speaking the guidelines have set the following provisions. Though these may change from time to time depending upon the Government Policy and the extent of requirements, the basic spirit and the criteria for loan settlement have remain unchanged largely speaking.

The provisions-(a) Loans up to Rs 7.5 lakh for pursuing higher education within the country and Rs 15 lakh for an overseas education are available. (b) For loans up to Rs 4 lakh no collateral or margin is required and the interest will be charged not more than the Prime Lending Rate (PLR) (c) For loans above, the interest rate charged will be not be more than PLR plus one per cent. (d) The loans are to be repaid over a period of 5 to 7 years with the provision of a grace period of one year after completion of studies.

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The repayment of an education loan is deductible under Section 80E of the Income Tax Act. The yearly limit for deduction Rs Rs 40,000/- (for both the principal and the interest). Only loans taken for higher education – full time studies in any graduate or post-graduate, professional, and pure and applied science courses – may claim deduction. The deduction will be available for a maximum of eight years starting from the day you start repaying.

Allahabad Bank, Oriental Bank of Commerce, State Bank of India, Punjab National Bank, Dena Bank, Bank of Baroda, Bank of Maharashtra, Canara Bank, Central Bank of India, Corporation Bank, Indian Bank, Indian Overseas Bank, State Bank of Hyderabad, State Bank of Travancore, Syndicate Bank, Union Bank of India, ICICI, HDFC, etc are some of the leading banks. Besides these banks there are numerous private lenders who are more active in the remote regions of India. While some of them are genuine, it is advisable to seek loans from recognized banks. As there are cases where students who are mid-way through their studies had to discontinue as the pending installments of loan never came through. Meanwhile there is a thinking in the Government that has the Planning Commission seriously considering a proposal wherein students, even graduates, can write-off their educational loans by serving for a while in a government agency. This move, for which the details are yet to be finalized, has been made to check brain drain from the country. The Planning Commission may set up a National Student Loan

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Guarantee Corporation which will provide a guarantee to students of certified institutions who avail of a bank loan. The move will enable banks to lend without collaterals.

According to the Reserve Bank of India (RBI) data, there was a 51 per cent rise in education loans from Rs 9,962 crore at the end of March 2006 to over Rs 15,000 crore at the end of March 2007. Officials say that a mechanism for loan waiver from a private or a foreign bank, and points regarding tax treatment are yet to be framed.

SHIKSHAK SAHAKARI BANK (SSB)
Education Loan Scheme:

“SSB SUVIDHA” – EDUCATION LOAN SCHEME”
A term loan granted to Indian Nationals for pursuing higher education in India or abroad where admission has been secured. 1. Eligible courses All courses having employment prospects are eligible. · Graduation courses/ Post graduation courses/ Professional courses
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· Other courses approved by UGC/Government/AICTE etc. 2. Expenses considered for loans · Fees payable to college/school/hostel · Examination/Library/Laboratory fees · Purchase of Books/Equipment/Instruments/Uniforms · Caution Deposit/Building Fund/Refundable Deposit · Travel Expenses/Passage money for studies abroad · Purchase of computers considered necessary for completion of course Any other expenses required to complete the course like study tours, project work etc.

3. Amount of loan · For studies in India, maximum Rs. 10 lacs · Studies abroad, maximum Rs. 20 lacs

4. Interest Rate For loans upto Rs. 4 lakh 12.00% p.a.
Above Rs.4 lacs and upto Rs.7.50 lacs 13. 50% p.a

Above Rs.7.50 lacs 12.50% p.a

5. Processing Fees · No processing fee/ upfront charges · Deposit of Rs. 5000/- for education loan for studies abroad which will be adjusted in the margin money.
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6. Repayment Tenure Repayment will commence one year after completion of course or 6 months after securing a job, whichever is earlier.

Repayment Period Place of Study Loan Amount in Years Up to Rs. 7.5 lacs Above Rs. 7.5 lacs Abroad Up to Rs. 15 lacs Above Rs. 15 lacs 5-7 5-10 5-7 5-10

In India

Security
Studies In Amount India Upto Rs. 4 lacs Above Rs. 4 lacs to Rs. 7.50 lacs No Security Third Party Third Party Guarantee Guarantee
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Studies Abroad No Security

Above Rs. 7.50 lacs to Rs. 10 lacs(India)/ Rs. 15 lacs(Abroad) Rs 15 lacs to Rs. 20 lacs

Tangible Collateral Tangible Collateral security security for full value of loan ___ for full value of loan of suitable value of loan or third party guarantee Tangible Collateral security

7. Margin For loans up to Rs.4.0 lacs : No Margin · For loans above Rs.4.0 lacs: o Studies in India: 5% o Studies Abroad: 15%

8. 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.

9. Upfront Fee: Nil

10. Time norms:
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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.

11. 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.

12. 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 installment. On the date fixed for commencement of repayment, the whole amount of interest so far worked
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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.

13. 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.

14. Documentation: i) Agreement (Annexure -1) 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 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 the student and parent / guardian.

15. Disbursement:
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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 and will permit drawing on the borrower’s account within the limit fixed. This will also enable the Incumbent In charge to remain in close touch with the borrowing student’s 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 stationary and books, loan may be disbursed in cash on declaration by the applicant and production of bills.

16. Classification: Advances allowed under the Scheme will be classified under Priority Sector.

17. Checklist: To facilitate expeditious disposal of applications, a check-list regarding documents, security etc. along with application forms for Education Loans be provided to intending borrowers. An illustrative check-list enabling a ready reference, so that
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intending borrowers can furnish all related documents / papers in one lot, is given below :· Loan application on Bank’s format. · Passport size photograph. · Proof of Address. · Proof of having secured pass marks in last qualifying examination. · Letter of admission in professional, technical or vocational courses. · Prospectus of the course wherein charges like Admission Fee, Examination Fee, Hostel Charges etc. are mentioned.

· Details of Assets & Liabilities of parents. · In case loan amount is above Rs. 4.00 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.

· Photocopy of Passport & Visa, in case of study abroad. · Any other document / information, depending upon the case and purpose of the loan.

18. Post Sanction Supervision:
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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 of 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, amount of loan sanctioned, subsidy received (if any) rate of interest, amount due under each instalment, due date of instalment etc.

19. Other condition: Zonal Managers and above may consider relaxation with regard to Eligibility, Margin and Security norms on merits of each case. No Due Certificate need not be insisted upon as a pre-condition for considering educational loan. However, Branches may obtain a declaration / an affidavit confirming that no loans are availed from banks.

20. Documents Required

i.

Mark sheet of last qualifying examination for school and graduate studies in India.

ii. Copies of letter conferring scholarship, freeship, studentship etc. iii. Documents evidencing the duration of course and commencement thereof viz.
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prospectus or certificate from the competent authority of the institution.

iv. Proof of admission to the course. v. Schedule of expenses for the course. vi. Two copies of passport size photograph of the borrower(s) / guarantor(s). vii. Statement of Bank account for the last six months of the borrower(s) viii. Signature identification from bankers of borrower(s) guarantor(s). ix. A copy of Passport/Voters ID Card/Proof of residence.

For salaried persons: i. Latest salary slips showing all deductions. ii. Employment details for the last 5 years. iii. Latest TDS Certificate – Form 16. iv. Statement of assets and outstanding liabilities.

For Self-Employed/Professionals and Businessmen
• •

Proof of income. Income Tax/Wealth Tax (if applicable) assessment orders not more than 2 years old.

•

Assets and Liabilities.

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If Collateral Security is Mortgage of Landed Property
• • • • •

Original Sale Deed Original receipt of payment made for registrar Society share certificate Non encumbrance or certificate from advocate Valuation Report

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 an 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.

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Managing Student Loan

A student loan is an investment in your future. It provides you an opportunity to obtain an education that might otherwise be beyond your financial reach. With a loan comes responsibilities that exist while you are enrolled in school, as well as during your repayment period. Borrowing money through the Federal Family, Education Loan Program to finance your education will have long-term implications for your financial future. The Michigan Guaranty Agency (MGA) has compiled this folder to help explain what you need to know about borrowing and repaying your student loans.

Things to Consider Before You Borrow Qualifying for a student loan may be a fairly easy process, but repaying it is more
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difficult. Before borrowing, consider the following items:

• A LOAN MUST BE REPAID. It is not a grant. Signing the promissory note is a legal and binding promise to repay a loan. Read your note for terms and conditions of the loan. Repayments is expected even if you do not complete your education, fails to complete your program of study within the regular time for program completion, are dissatisfied with your education, do not graduate, or do not find a job after you complete your program.

Failure to repay your educational loans in a timely manner and can affect your credit rating and your future ability to borrow for other purposes such as a car or a house.

• Know when repayment begins. Some loans go into repayment shortly after final disbursement; other loans have a period where payments of principal and/or interest are deferred. Your lender will provide a repayment schedule which lists repayment terms and conditions.

• Check your finances before you apply for a loan. Consider how much you and/or your family can contribute toward your education. Apply for other financial aid resources such as scholarships, grants, and work opportunities through your college financial aid office.

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• Consider your expected salary and other expenses when you leave school. Can you afford monthly educational loan payments ranging from $250 to $600 over a ten (10) year repayment period? Too large a debt may prevent the “good life” you expected to experience after graduation. THE MORE YOU BORROW, THE MORE YOU PAY EACH MONTH.

• If you must borrow, borrow only what you need and what you can reasonably expect to repay. Current information regarding educational loan eligibility and applications can be obtained from the financial aid office at your school. The financial aid office must advise you of the effect of accepting the loan on eligibility or other types of student financial assistance.

•Borrower benefits may differ between lenders. Check with lenders regarding their borrower benefits.

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Research Methodology

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Research Methodology in a way is systematic representation of research or any other problem. It is a written game plan for conducting research. It tends to describe the step taken by a researcher in studying the research problem along with a logical background. It tends to describe methodology for solution of the problem that has been taken for the purpose of study this project focuses on the methodology for technique used for the collection, classification & tabulation of the data. This plan throws light on the research problem, the objective of study & limitation of the study. Therefore, in order to solve a problem, it is necessary to design a research methodology for problem as the same way differs from problem to problem. It is also the process of systematic & in depth study or search of any particular topic, subject by the collection, presentation & interpretation of relevant details or data. It is a careful search or injury into any subject or subject matter, which is an endeavour to discover or to find out valuable facts that would be useful for further application or utilisation.

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The Project The main aim of the study is to understand the “Education Loans” provided by “Private Sector Unit.” It is the banks which understand the need & provides best interest rate facility. The nature of the study is that it has an applied base. The statement indicated that result obtained from the study, inference drawn from the study can actually be applied practically & can be of great help to know about Education loans in more comprehensive way. Scope of study. The study is restricted to Nagpur itself. It aims at getting an insight in to Education loan. It also aims at familiarized with the various PSUs loan and its interest rate and also it help me a lot in understanding the practical aspect of the loan as a whole. Objective of study The main objective of the study is to understand the Education loans provided by Private Sector Unit i.e. Shikshak Sahakari Bank Ltd. The objective was successfully achieved by performing the detailed survey of the bank. • • • To give satisfaction regarding services offered by bank To make out which bank provide services with best resources To know the awareness among the common student about Education loan which they want to take.

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Type of Research Research methodology is a way to systematic solve the research problem. It is a procedure, which is followed step by step to solve a particular research problem. There are basically four types of researches.

 EXPLORATIVE RESEARCH  DESCRIPTIVE RESEARCH  DIAGNOSTIC RESEARCH  HYPOTHESIS TESTING RESEARCH

Explorative Research To gain familiarity with the phenomenon or to achieve an insight into it. Descriptive Research To poetry accurately the characteristic of the particular individual situation or a group. Diagnostic Research To determine the frequency with which something occurs or with which it is associate with something else.

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Hypothesis Testing Research To test a hypothesis of casual relationship between variables. The present project is Descriptive in nature. It is done to poetry accurately the characteristic of a particular individual situation or a group. The major purpose in descriptive research is the description of the state of the affairs as it exists at presents. The main characteristics of this method are that the researcher has no control over the variables; he can only report what has happened or what is happening.

Research Process There are six steps of Designing A Research Report. 1 Specifying the Research objective As this research project is about the comprehensive study of Education loan & role of Banks. Providing them so first of all the various objectives of the project were specified.

2. Preference the list of needed information The second step in designing the project work is the preparation of list of need information. There is basic information on which the research project is to structure. In this project the various are handed in starting of the project.
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3. Designing the data collection process During the data collection process a questionnaire was made for the collection of the data from the Student personally. Because in the research project both primary as well as secondary data is required. So primary data was collected from

•

Primary sourceThe information is collected through employees of Shikshak Sahakari Bank Ltd.

•

Secondary sourceBrochures of the Bank

The following type of question was asked from the consumers. Dichotomous A question with two possible answers says yes or no. Multiple choices
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A question with three or more answer.

4. Selection of the sample size Taking the sample of the study was not easy task. The objective and the limitation of the study have to be kept in mind before deciding about the sample type.

5. Organizing and carrying out the field work. After decided upon the sample size & preparing the questionnaire, the fieldwork has to be carried out. In the field work the place had to be chosen where you want to do your study. This project survey work was carried out in the Nagpur city.

6. Analyzing the collected data & reporting the finding After the survey work was over & data had been collected the analyzing of the data & its graphically representation was needed.

Data Analysis and Interpretation

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Position of the bank from last 5 years
Year Share Capital
Rs.(Crores) (As on 2005) 1784.1 3 15216.58

Reserve Fund
Rs.(Crores)

Deposits
Rs.(Crores)

Advances
Rs.(Crores)

68622.53

45872.10

Based on 2005

2005-06 2006-07 2007-08 2008-09 2009-10

2154.38 (+20.75) 2175.54 (+21.93) 2405.10 (+34.80) 2556.52 (+43.29) 2740.21 (+53.58)

18799.55 (+23.54) 22585.03 (+48.42) 23811.03 (+56.48) 25358.11 (+66.82) 28292.33 (+85.93)

62663.43 (8.68) 55415.11 (19.24) 59861.84 (12.76) 52017.89 (24.19) 53971.88 (21.34)

40855.90 (10.93) 34000.92 (25.87) 30716.60 (33.03) 31898.64 (30.46) 33035.01 (27.98)

Analysis Through Chart:
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Share Capital
3000 2154.38 Rs.(Crores) 2000 Share Capital 1000 0 2005-06 2006-07 2007-08 Years 2008-09 2009-10 2175.54 2556.52 2740.21

2405.1

Interpretation:

We can see that from the figure there have been a steady increase in the value of share capital during the last five years. In the year 2005-06 the share capital is by increased by 20.75%, in 2006-07 by 21.93%, in 2007-08 by 34.80%, in 2008-09 by 43.29% and in 2009-10 by 53.58%. The reason is that the members are increasing every year.

Analysis Through Chart:

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Reserve Funds
30000 25000 Rs.(Crores) 20000 15000 10000 5000 0 2005-06 2006-07 2007-08 2008-09 Years 2009-10 18799.55 Reserve Fund 28292.33 22585.03 23811.03 25358.11

It can be seen from the figure that the Reserve Fund have increased by 23.54% in 2005-06, 48.42% in 2006-07, 56.48 in 2007-08, 66.82 in 2008-09 and by 85.93% in the year 2009-10. The increase in members is also increasing the amount of reserve fund every year.

Interpretation:

Analysis Through Chart:

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Deposits
62663.43 60000 Rs.(Crores) 50000 40000 30000 20000 10000 0 2005-06 2006-07 2007-08 2008-09 2009-10 Years 55415.11 59861.84 52017.89

53971.88

Deposits

Interpretation: All the above data is compared with the
value in the year 2005. Deposits according to this year was 68622.53 Crores. The deposits are increasing and decreasing every year. The reason is the seasonal fluctuations.

Analysis Through Chart:

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Advances
40855.90 40000 Rs.(Crores) 30000 20000 10000 0 2005-06 2006-07 2007-08 2008-09 2009-10 Years 34000.92 30716.60 31898.64 33035.01

Advances

Interpretation: Seasonal fluctuations also have an
impact to the Loans and Advances of the bank. As compared to the 2005 value it is also decreasing.

Findings

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Sl. No.
1 Max. loan for Rs. 10.00 Lacs studies inSuggestions & Recommendations India Max. loan for studies in Abroad Rs. 20.00 Lacs

2

3

Interest Rates Upto Rs. 4 lakh Above Rs. 4 lakh 13.50% p.a.

12%

p.a.

4

Repayment Period starts from Repayment Period

one year after completion of course or 6 months after securing a job, whichever is earlier.

5

In India : Up to Rs. 7.5 lacs - 5-7 years Above Rs. 7.5 lacs -5-10 years In Abroad : Up to Rs. 15 lacs – 5-7 years Above Rs. 15 lacs – 5-10 years

6

Margin

Upto Rs. 4.00 lacs Above Rs. 4.00 lacs:

:

Nil 5%

Studies in India

Studies in Abroad 15%

7

Processing Fees

No processing fee/upfront charges Deposit of Rs. 5000/-for education loan for studies abroad which will be adjusted in the margin money

8

Security

Upto Rs. 4.00 lacs : No Security

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Above Rs. 4.00 lacs to Rs. 7.50 lacs : Third Party Guarantee

• Bank should go for advertisement Campaign from Scratch. • Bank should try to cash its brand image.

• Strong branch network should be made and staff personnel’s incentives should be increased.
• Bank should increase its product line in education loans.

• Special scheme for non-professional students as well as for professional students should be increased. • Banks should introduce some new model keeping in mind the loan suitable for medium income group customer. • Presence of some famous personality in Advertisement or in Pamphlet’s insuring better retention in the mind of customers. • In this age of information, the customer before taking loans collects all the information about various brands. The banks should provide a combined booklet of the product range in order to upgrade the knowledge of future takings of loans.

Limitations of the Study
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There are some limitations in this research; these limitations are as follows – • Time limitation
• Many banks provide education loan but in this research only one bank is

taken for consideration. • •
•

Expenditure on research Restricted to Nagpur region only Some banks are not provided with their internal information/circular.

Conclusion
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On the basis of above finding it is clearly observed that private banks have more reach, variety and flexibility in their education loan schemes. Maximum loan for studies in India is ranging from Rs. 7.50 lacs to 10.00 lacs and for studies in Abroad it is Rs. 15-20 lacs. Interest rates vary from 9.5% to 11.5% p.a. All banks have same repayment facility i.e. one year after completion of course or 6 months after securing a job, whichever is earlier. Repayment period is also vary from 5-7 year after commencement of repayment in the case of education loan is taken from private bank and it is 4-7 years on the basis of unsecured and secured education loan taken from private banks. Margin is same as compared to any other scheduled bank in Nagpur. • Upto Rs. 4.00 lacs : Nil • Above Rs. 4.00 lacs : Studies in India 5% • Studies in Abroad 15% • Processing fees is also charged according to the requirement.

APPENDIX
ANNEXURE I
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FOR SSB: (To be taken in case where the student is Minor) ANNEXURE I 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 , executors, administrators and assigns) of the One Part and Shikshak Sahakari Bank having its head office at Gandhi Sagar , Nagpur- 440018 and amongst other a branch Office at _______ _______ ______ ______ (hereinafter called the ‘bank’ which term shall unless repugnant to context include its successors and 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.
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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: NOW THIS AGREEMENT WITNESSETH AS UNDER 1. The total amount of the loan amounting to Rs. __________ will be disbursed by the bank to the borrowers as under :State the manner of disbursement 2. The 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, examination / library laboratory fee , purchase of books / equipment / instruments / uniform caution deposit / building fund /refundable deposit / supported by the 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 tour 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
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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 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 Rs. 4.00 lac 4. The 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. 5. The interest on the loan will be payable at the PTLR rate /_____% over the PTLR 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. (PTLR means Prime Term Lending Rate of the bank prescribe by the bank from time to time. The PTLR as on date is ______% p.a.) In the event of there not being any PTLR, the borrower agrees to pay interest at the rate as prescribed by the bank. 6. Subject to what is provided in paragraph 3 above, the borrowers will repay the loan together with interest accrued thereon by equal monthly installments in _______ year 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.
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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 installments 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 under takes 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. __________________________ BORROWERS FOR SHIKSHAK SAHAKARI BANK LTD (Authorized signatory) (To be taken in case where the student is Major)

ANNEXURE II

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AGREEMENT FOR EDUCATION LOAN This Agreement is made at_____________on this_______day of _____20 __ between Shri / Smt. / Km. ____________________________, son / daughter of Shri _________ ______ ___ r/o ________ ________ ______ (hereinafter referred to as ‘student’) and Sh. / Smt. _____________________ son / daughter of____________________ r/o ______________________________ (hereinafter referred to as ‘parent’), (parent and student collectively hereinafter called the ‘borrowers’ which expression shall unless repugnant to context include their heirs, executors, administrators and assigns) of the One Part and Shikshak Sahakari Bank a body corporate having its head office at Gandhi Sagar , Nagpur- 440018 and amongst other a branch office at _______ _______ ______ ______ (hereinafter called the ‘bank’ which term shall unless repugnant to context include its successors and assigns) of the Other Part. WHEREAS A) The Student and Parent (Borrowers) represents 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. B) The Borrowers have, with a view to receiving the financial assistance for his/her studied, applied to the bank for a loan of Rs. ____________(rupees_____________________) which the bank has agreed to grant on terms and conditions herein after appearing: NOW THIS AGREEMENT WITNESSETH AS UNDER

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1. The total amount of the loan amounting to Rs. __________ will be disbursed by the bank to the borrowers as under :State the manner of disbursement 2. The 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, examination / library laboratory fee , purchase of books / equipment / instruments / uniform caution deposit / building fund /refundable deposit / supported by the 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 tour 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 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 Rs. 4.00 lac 4. The borrowers will secure the loan by providing a suitable surety an unless he
70

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 PTLR rate /_____% over the PTLR 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.(PTLR means Prime Term Lending Rate of the bank prescribe by the Bank from time to time. The PTLR as on date is ______% p.a.) In the event of there not being any PTLR, the borrower agrees to pay interest at the rate as prescribed by the bank. 6. Subject to what is provided in para 3 above, the borrowers will repay the loan together with interest accrued thereon by equal monthly installments in _______ year 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 installments 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. 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__________________________
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BORROWERS FOR SHIKSHAK SAHAKARI BANK LTD (Authorized signatory)

ANNEXURE-III
Date:_____________________ The Manager,
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Shikshak Sahakari Bank Ltd, BO:___________________ 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 favors in consideration of the said loan. I inform you that I have attained majority on ____________ and request you to disburse the remaining amount loan of Rs. __________ to me out of the loan agreed to be granted by you. I am already and willing to execute any further documents in your favor for the said loan, if so required by you. I also confirm that the amount of loan of Rs. ___________ already disbursed to 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)

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