Education Loan Scheme - Govt Guidelines On New CSIS Scheme

Scope

One of the major objectives of the Government is to ensure that no student is denied the opportunity to pursue higher education because she or he is poor. To achieve this objective, Ministry of Education (Erstwhile Ministry of Human Resource Development) launched a Scheme titled "Central Sector Interest Subsidy Scheme" (CSIS) in 2009. The scheme provides full interest subsidy during the moratorium period on loan availed under Model Education Loan Scheme of Indian Banks’ Association (IBA) for pursuing technical/professional courses in India. Students whose annual gross parental/ family income is up to Rs.4.5 lakh are eligible under the scheme. The existing Scheme has been modified with the approval of the Union Cabinet on 19.01.2022.

The Scheme is adopted by all Scheduled Banks/Regional Rural Banks (RRBs)/Co-operative Banks and is linked with the existing Model Educational Loan Scheme of the Indian Banks’ Association.

Interest Subsidy under CSIS is admissible only once either for undergraduate or post graduate or integrated course. Under the scheme, interest subsidy on education loan is provided for a maximum amount of Rs. 10.00 lakh (Even sanctioned loan amount in excess of Rs. 10.00 lakh would qualify for interest subsidy up to Rs. 10.00 lakh only). (Earlier the interest subsidy on education loan was provided for a maximum amount of Rs. 7.50 lakh for loan sanctioned on or after 01.04.2018 to 31.03.2022 & for a maximum amount of Rs. 10.00 lakh for loan sanctioned on or before 31.03.2018)

In CSIS scheme, no collateral security or third party guarantee is required for Education Loan sanctioned upto Rs. 7.50 lakh. The bank is to ensure that this part of the loan is covered for guarantee under Credit Guarantee Fund Scheme for Education Loan (CGFSEL).

Under the Scheme, the interest payable on the Educational Loan for the moratorium period, i.e. Course Period plus one year will be borne by the Government of India. After the period of moratorium, the interest on the outstanding loan amount shall be paid by the student, in accordance with the provisions of the existing Model Educational Loan Scheme of Banks and as may be amended from time to time.

Eligibility of students for CSIS:

Interest Rates

The interest rates charged on the educational loan shall be as per the Benchmark Prime Lending Rate (BPLR)/Base Rate of the individual banks and as per the provisions for interest rates under the IBA Model Educational Loan Scheme.

Moratorium Period:

Income Limit/Proof:

The benefit of the Scheme is applicable to students belonging to economically weaker sections having gross parental/ family income upto Rs. 4.5 lakh per annum from all sources. Income proof is required from authorised Public Authority of the State Government. The scheme is independent of any other schemes which may cater to economically weaker sections. Income certificate is required to be submitted by eligible student only once.

Students to submit the required documents to their branches in time to enable branch to claim subsidy within the time schedule as per guidelines. Any subsequent changes in family income during moratorium period will not affect student’s subsidy eligibility criteria.

The veracity of Income Certificate submitted by student borrower be thoroughly checked and verified before accepting the same and submission of claims to avoid instances of submission of fake certificates by the student borrowers.

In order to ensure genuineness of the Income Certificate submitted by the student/borrower, branch Incumbents/authorized officials may visit the office of Income Certificate Issuing Authority to get the same checked /verified.

The designated authorities to give Income proof under this scheme have been authorized by the respective State Governments. The latest updated State/UT wise list (including the state of Manipur) of the Income Certificate Issuing Authority, as informed by IBA, from time to time is placed a

Competent Authority

The Ministry of Education, Government of India has issued an Advisory to all the State Governments requesting them to designate appropriate authority or authorities who are competent to issue income certificates, based on economic index and not social background, for the purpose of this scheme. The Banks shall implement the scheme based on the notification of the certification authority by State Governments communicated through District Level Consultative Committees (DLCCs).

Similar Schemes

The National Minorities Development and Finance Corporation (NMDFC) has an Educational Loan Scheme for individual beneficiaries, which is implemented through State Channelizing Agencies (SCAs). The National Safai Karamcharis Finance and Development Corporation (NSKFDC), National Backward Classes Finance and Development Corporation (NBCFDC), National Scheduled Castes Finance and Development Corporation (NSCFDC), National Handicapped Finance and Development Corporation (NHFDC) under the Ministry of Social Justice and Empowerment and the National Scheduled Tribes Finance and Development Corporation (NSTFDC) under the Ministry of Tribal Affairs also provide educational loan to the students of the target group for higher education. Interest on Education Loan provided under the educational loan schemes of these six corporations, if the loans are for pursuing professional courses after XII class, shall also be subsidized for the period of moratorium as per the terms and conditions of this scheme. The interest charged by NMDFC, NSKFDC, NBCFDC, NSCFDC, NHFDC and NSTFDC are to be paid by Government direct to the respective Corporations.

Nodal Bank

The Scheme shall continue to be implemented through Canara Bank, which is the Nodal Bank for the Ministry of Education. Modalities for implementation and monitoring shall be finalised in consultation with the Canara Bank.

Applicable Academic Year

The Modified Scheme shall be applicable from the academic year 2022-23, starting 1st April, 2022.

List of Technical/Professional Courses

List of Centrally Funded Technical Institutions and Institutions of National Importance is available on Ministry of Education website URLs http://mhrd.gov.in/technical-education-1 and http://mhrd.gov.in/institutions-national-importance. The list of NAAC accredited universities/institutions is available at NAAC website URL http://naac.gov.in/index.php/en/2- uncategorised/32-accreditation-statusand NBA recognised professional courses is available at NBA website URL https://www.nbaind.org/accreditationprogram/AccreditedProgram. In case of doubt, related to eligibility of course under the scheme etc., banks may approach University Grants Commission (UGC)/ All India Council for Technical Education (AICTE) and other councils for clarification, for which UGC/AICTE and other councils would be requested to create Cells and identify Nodal Officers, whom banks can approach for relevant information. It shall be the responsibility of the loan disbursing bank to ensure that only technical/professional courses are covered by them under the scheme.

Indian Banks’ Association (IBA), vide their letter No.SB/CIR/Govt/10-21-ISS/7094 dated 25.04.2013, has informed having received a list from Ministry of HRD, containing the names of accredited universities/ institutions and recognized professional courses which are administered by the Ministry of Tourism and are also eligible for Interest Subsidy. The list of such accredited universities / institutions is available as at “Annexure - A”. The list is also uploaded on corporate website of the Bank.

Monitoring

An Interest Subsidy & Credit Guarantee dashboard would be set up by the Nodal Bank for the Scheme with real-time data from banks on geographical/ socio-economic/ gender/ institution/ accreditation grade of the institution/ category/ course-wise distribution of loan applications, sanctions, subsidy released and adjusted, loan repayments, NPAs, etc. This dashboard will ensure effective monitoring and enable the Ministry to measure the outcome of the Scheme.

Disbursement of Interest Subsidy claims

The disbursement of interest subsidy claims to the Nodal Bank shall be on Quarterly/Half yearly/Yearly basis, as decided by the Ministry of Education, Government of India. Nodal Bank shall disburse the subsidy in Education Loan account of the beneficiaries in DBT mode through PFMS Portal. It is the sole responsibility of lending bank to claim interest subsidy on behalf of eligible beneficiary on yearly basis. If any lending bank fails to claim interest subsidy for current year, backlog claim of interest subsidy will not be entertained. Any delay in submission or non-submission of claim by the lonee bank to Canara Bank, the Department of Higher Education will not be responsible for such delay/ non-submission of claim and non-payment of interest subsidy.

Interest Concession

Under the IBA Scheme, 2021, Banks at its discretion may provide 1% interest concession if interest is serviced during the study period and subsequent moratorium period prior to commencement of repayment. However, the subvention provided by Government should not be a cause for providing 1% concession in rate of interest.

Miscellaneous

• The scheme is effective from the year 2009-10 and the scheme is an ongoing scheme till further instructions to the contrary are received from IBA. Further, the modified scheme is applicable for the academic year 2022-23 starting 01 stApril, 2022.
• The loan amount taken starting from the Academic year 2009-10 (irrespective of the date of sanction) are covered under the scheme for interest subsidy. Interest on any amount disbursed for courses starting before the academic year 2009-10 is not to be considered for subsidy.
• It is the further clarified that the disbursements made during the academic year 2009-10 starting 1st April, 2009 are eligible for subsidy irrespective of the date of sanction i.e. only disbursements made by the Bank to student borrowers on and from 1st April, 2009 are covered under the Scheme. In respect of courses which have started prior to 1st April, 2009, claims could be considered only in respect of disbursements made on and from 1st April, 2009 for such courses. Disbursements made prior to 1st April, 2009 are not eligible.
• On completion of moratorium period, the interest on the outstanding loan amount shall be paid by the student, in accordance with the provisions of the educational loan Scheme.
• For Education loans exceeding Rs.10 lakh, the subsidy under the scheme is available up to Rs.10 lakh only for studies in India for loan taken upto 31.03.2018.
• Subsidy amount will be only for Rs.7.50 lakh irrespective of sanctioned loan amount (within the parameters of IBA Model Education Loan Scheme) where loan is provided without any collateral security and third-party guarantee for all loans taken w.e.f. 01.04.2018 to 31.03.2022.
• Now, interest subsidy on education loan is provided for a maximum amount of Rs. 10.00 lakh (Even sanctioned loan amount in excess of Rs. 10.00 lakh would qualify for interest subsidy up to Rs. 10.00 lakh only) for loan sanctioned on or after 01.04.2022.

Contact

For any query related to subsidy settlement/release of subsidy/failure of subsidy amount under CSIS Scheme:

At Head Office:

Punjab National Bank, Retail Assets Division,

4^th Floor, Sector - 10, Dwarka 110075

Telephone: 011-28075264

Email: radeducation[at]pnb[dot]co[dot]in

At Nodal Bank:

Canara Bank Head Office, Priority Credit Section,

Priority Wing, 112 Jayachanarajendra Road,

Bengaluru - 560002, Karnataka

Telephone: 080-22128044

Email: hogps[at]canarabank[dot]com

Annexure - A

Central IHMs:

Annexure - B

INCOME CERTIFICATE ISSUING AUTHORITY IN VARIOUS STATES/ UNION TERRITORIES AS ON JANUARY 2014