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PROJECT REPORT

ON
COMPARIVE STDUY OF EDUCATION LOAN,
STATE BANK OF INDIA V/S PANJAB NATIONAL
BANK

BACHELOR OF COMMERCE
BANKING INSURANCE
SEMESTER VI (2013-2014)
SUBMITTED BY,
PRIYANKA RAMESH JAMBHALE
BI11-524

CERTIFICATE

This is to certify that Ms. PRIYANKA R. JAMBHAL


Roll No.524
of

B.Com. Banking and Insurance Semester V (2013-2014) has

successfully completed the project on COMPARITIVE STDUY OF


EDUCATION LOAN STATE BANK OF INDIA V/S PUNJAB
NATIONAL BANK under the guidance of Prof. VAIDEHI
DAPTRDAR.

Date

COURSE COORDINATOR
(Prof. _________)

INTERNAL EXAMINER

(Prof.__________)

PRINCIPAL
(Dr. Vaidehi Dapterdar)

EXTERNALEXAMINER

(Prof

.)

DECLARATION

I PRIYANKA RAMESH JAMBHALE, the student of B.Com.


Banking & Insurance Semester V (2013-2014) hereby declare that I have
completed the project on COMPARATIVE STUDY OF EDUCATION
LOAN STATE BANK OF INDIA V/S PUNJAB NATIONAL BANK.
The information submitted is true and original to the best of my
knowledge.

SIGNATURE OF
STUDENT

(MS PRIYANKA RAMESH JAMBHALE)

ACKNOWLEDGEMENT
I WOULD LIKE TO THANK PROF Mrs. VAIDEHI DAPTRDAR. OUR
COORDINATOR WHO HAS HELPED ME TO KNOW THE CONCEPT
OFCOMPARITIVE STUDY OF EDUCATION LOAN, STATE

BANK OF INDIA V/S PUNJAB NATIONAL BANK.


I AM EXTREMELY THANKFUL AND WOULD LIKE TO EXPRESS DEEP
GRATITUDE

TO

MY

PROJECT

GUIDE

PROF.

MISS.

VAIDEHI

DAPTRDAR. WHO HAS HELPED ME TO STUDY THE VAST OCEAN


OFCOMPARITIVE STUDY OF EDUCATION LOAN, STATE

BANK OF INDIA V/S PUNJAB NATIONAL BANK. & HELPED ME


TO OVER COME ALL THE DIFFICULTIES THAT CAME IN THE COURSE OF
COMPLETION OF THE PROJECT.
I WOULD ALSO LIKE TO THANK MY FRIENDS, MY FAMILY AND ALL THE
SEEN AND UNSEEN HANDS THAT HAVE HELPED ME TO COMPLETE THE
PROJECT.

Comparative study of
education loan
V/S

INTRODUCTION
The IBA Model Educational Loan Scheme for pursuing higher studies in
India & Abroad was formulated initially in the year 2001 and modified
subsequently from time to time with the objective of facilitating pursuit of
higher studies by meritorious students. The focus was mainly on
technical and professional courses in recognised Colleges and
Universities. The vocational courses offered by ITIs, ITCs, Polytechnics
and other technical institutions / bodies were not covered in the Model
Educational Loan Scheme (some banks do provide loans for pursuing 3
year diploma courses offered by Polytechnic Institutes). However, in
view of the initiatives being taken by the Govt. of India in skill
development in recent years, a need was felt for providing institutional
funding for the students undergoing specialized skill development
programs in recognized institutions. The Government has estimated that
the country would require 10 to 15 million skilled workers every year to
support the development process. The initiatives being taken by the Govt.
are for setting up new training facilities, modernization of existing centres
and intensive faculty development. The Model Educational Loan
Scheme for Vocational Courses has been developed as an extension of
the existing Model Educational Loan Scheme for pursuing higher
education in India & Abroad, to support the national initiatives for skill
development.

Definition

A loan offered to a student which is used to pay off education-

related expenses, such as college tuition, room and board at the


university, or textbooks. Many of these loans are offered to
students at a lower interest rate, such as the Perkins loan or
Stafford loan. In general, students are not required to pay back
these loans until the end of a grace period, which usually begins
after they have completed their education

Importance of Student Loans


Only because of student loans, most of the students are able to achieve
their higher education goals. The students need not ask for monetary help
from others while they continue their education. Student loans come to
their rescue in meeting with the essential college fees and other
educational expenses. The student may be able to repay the loan
borrowed after he gets a job after completion of his studies. His pride
also is improved when he is able to repay his loan properly. His credit
rating also improves.
There are two types of student loans which the students can avail.
Those are:
1.

Private student loans

2.

Federal student loans

Private student loans are given by private lenders or by the educational


institutions where the student undergoes education. The rate of interest
will be higher than the federal student loan. Federal student loans are
provided by the federal government and the rate of interest may be low or
free. So, the federal Government student loans are more beneficial to the
students looking for a student loan than the private student loan which has
high interest rate.
Student loans play a vital role in helping the students come out of
financial crisis in pursuing their educational dreams. In this economic
situation, the parents of the students find it very difficult to fund their
childrens education. Due to the finance problem, many of the
meritorious students have to quit their education. So, taking student loan
can help them in coming out of this crisis. So, without worrying for their
educational expenses, students can fulfil their educational dreams

OVERVIEW OF EDUCATION LOAN


Ever fancy your son attending the Harvard business school? Or, you,
young lady, want to fly an aircraft? Perhaps, you have the admission letter
from your dream university across seven seas; you now only need the
dough...

If the obstacle is cash, an education loan is the answer. The icing on this
cake is that such education loans not only cover the cost of the tuition fee
but also almost all the expenses involved in the pursuit of academics. You
just need a set of eminently gettable documents and a guarantor to set
yourself on the road to academia.

Qualification

Most college students in the United States qualify for federal student
loans. Students can borrow the same amount of money, at the same price,
regardless of their own income or their parents' income, regardless of their
expected future income, and regardless of their credit history. Only
students who have defaulted on federal student loans or have been
convicted of drug offenses are excluded.
The amount students can borrow each year depends on their education
level (undergraduate or graduate), and their status as dependent or
independent. Undergraduates may receive lower interest rates than
graduate students, but graduate students can typically borrow more per
year.
Private lenders may use different underwriting criteria, including income
level, parents' income level, and other financial considerations. Students
will generally only borrow from private lenders when they exhaust the
maximum borrowing limit under federal loans. Several scholars have
advocated eliminating the borrowing limit on federal loans and enabling
students to borrow according to their needs (tuition plus living expenses)
and thereby eliminating high-cost private loans

Repayment
Federal student loan interest rates are established by Congress and listed
in $ 20 U.S.C. $ 1087E (b). Because the interest rates are established by
Congress, interest rates are a political decision. The federal student loan
program currently runs a multibillion dollar "negative subsidy", or profit,
for the federal government. Some scholars have suggested that federal
student loan interest rates should be tailored to particular courses of study
and reflect the riskiness of those different courses of study. They have
also suggested that the program should be run at cost, or below cost,
because of the benefits an educated workforce provides to society-lower
burdens on public services, lower health costs, higher wages and tax
revenues and lower unemployment.
Repayment typically begins anywhere from six to twelve months after a
student leaves school, regardless of whether or not they complete their
degree program. In some cases, repayment begins if course load drops to
half time or less, so it is important to check the exact terms and conditions
of any student loan.
The student may have multiple options for extending the repayment
period, although an extension of the loan term will likely reduce the
monthly payment, it will also increase the amount of total interest paid on
the principle balance during the life of the loan. Extension options include
extended payment periods offered by the original lender and federal loan
consolidation. There are also other extension options including income
sensitive repayment plans and hardship deferments. Extensions and
consolidation will also add to the principal, many times unpaid interest
and penalties become capitalized.

The Master Promissory Note is an agreement between the lender and the
borrower that promises to repay the loan. It is a binding legal contract.

CRITICISM
Since 2001, India has seen a sharp rise in the number of banks providing
loans to students. There is no longer any need to shelve your plans for
studying in India or abroad if you are a deserving student. You need to be
enrolled in a university of repute or one that is sanctioned by the UGC/All
India Council of Technical Education or any government institute. Loans
usually depend on the chosen course, reputation of the institute, family
assets
and
past
academic
record.
A Comprehensive Educational Loan Scheme has been framed by the
University Grants Commission in association with the Reserve Bank of
India. Under this scheme, a deserving candidate

May get up to Rs. 7.5 lakhs as loan for studying in India and Rs. 15
lakhs for studying abroad.
Will not have to pay interests exceeding Prime Lending Rate for
loans up to Rs. 4 lakhs. For loans beyond Rs. 4 lakhs, the student
will have to pay PLR plus one percent. Banks will not ask for
collateral or guarantee either for loans up to 4 lakhs.
Can repay the loan over a span of 5 to 7 years with a grace period
of one year after the completion of studies.

Once you decide to apply for bank loans in India, here are a few points
you should note:

Make sure to choose a bank near your campus


Documents to be submitted

1. Attested mark sheet of last qualifying examination for school and


graduate studies in India. Proof of admission to the course.
2. Schedule of expenses for the course.
3. Copies of letter confirming scholarship, etc.
4. Copies of foreign exchange permit, if applicable.
5. 2 passport size photographs.
6. Statement of Bank account of the last six months.
7. Income Tax Assessment order not more than 2 years old.

8. Brief statement of assets and liabilities of borrower.


9. If you are not an existing bank customer, you would also need to
establish your identity and give proof of residence.
10.Copies of passport, air tickets, in case of admission to foreign
university.

EDUCATION LOAN IN INDIA


Now, Education Loans are easily available from various banks in India.
Many Nationalized banks are coming up with various Educational Loan
schemes and more students can take up higher education despite of their
financial problem.
Students Loan:
Because of Students Loan the student can follow higher education will get
the good degree for better job in their future. This is very encouraging
step for the students who want to learn and their brighter future.
The list of banks provides education loan in Indian banks are:
1)
2)
3)
4)
5)
6)

Bank of India
State Bank of India
Bank of Baroda
Dena Bank
HDFC Bank
Union Bank of India

7) UCO Bank and so many more banks are giving Educational Loans.
The list of bank provides education loan in abroad banks are:
1) Axis Bank
2) IDBI Bank
History of state bank of india

Seal of Imperial Bank of India.

The roots of the State Bank of India lie in the first decade of 19th century,
when the Bank of Calcutta, later renamed the Bank of Bengal, was
established on 2 June 1806. The Bank of Bengal was one of three
Presidency banks, the other two being the Bank of Bombay (incorporated
on 15 April 1840) and the Bank of Madras (incorporated on 1 July 1843).
All three Presidency banks were incorporated as joint stock
companies and were the result of the royal charters. These three banks
received the exclusive right to issue paper currency till 1861 when with
the Paper Currency Act, the right was taken over by the Government of
India. The Presidency banks amalgamated on 27 January 1921, and the reorganised banking entity took as its name Imperial Bank of India. The
Imperial Bank of India remained a joint stock company but without
Government participation.
Pursuant to the provisions of the State Bank of India Act of 1955,
the Reserve Bank of India, which is India's central bank, acquired a
controlling interest in the Imperial Bank of India. On 1 July 1955, the
Imperial Bank of India became the State Bank of India. The government
of India recently acquired the Reserve Bank of India's stake in SBI so as
to remove any conflict of interest because the RBI is the country's
banking regulatory authority.

In 1959, the government passed the State Bank of India (Subsidiary


Banks) Act, which made eight state banks associates of SBI. A process of
consolidation began on 13 September 2008, when the State Bank of
Saurashtra merged with SBI.
SBI has acquired local banks in rescues. The first was the Bank of Behar
(est. 1911), which SBI acquired in 1969, together with its 28 branches.
The next year SBI acquired National Bank of Lahore (est. 1942), which
had 24 branches. Five years later, in 1975, SBI acquired Krishnaram
Baldeo Bank, which had been established in 1916 in Gwalior State, under
the patronage of Maharaja Madho Rao Scindia. The bank had been
the Dukan Pichadi, a small moneylender, owned by the Maharaja. The
new banks first manager was Jall N. Broacha, a Parsi. In 1985, SBI
acquired the Bank of Cochin in Kerala, which had 120 branches. SBI was
the acquirer as its affiliate, the State Bank of Travancore, already had an
extensive network in Kerala.
The State Bank of India and all its associate banks are identified by the
same blue keyhole logo. The State Bank of India wordmark usually has
one standard typeface, but also utilises other typefaces.
On October 7, 2013, Arundhati Bhattacharya became the first woman to
be appointed Chairperson of the bank

SCHEME OF EDUCATION LOAN


FROM STATE BANK OF INDIA

Eligible Courses
a. Studies in India:

Graduation, Post-graduation including regular technical and


professional
Degree/Diploma
courses
conducted
by
colleges/universities approved by UGC/ AICTE/IMC/Govt. etc
Regular Degree/ Diploma Courses conducted by Autonomous
Institutions like IIT, IIM etc

Teacher Training/ Nursing Courses approved by Central


Government or the State Government
Regular Degree/Diploma Courses like Aeronautical, Pilot
Training, Shipping etc. approved by Director General of Civil
Aviation/Shipping
Vocational Training and Skill Development Study Courses will
not be covered under the regular Education Loan Schemes. A
separate scheme for Loans for Vocational Education and Training

has been launched which covers financing for such Vocational


courses

b. Studies abroad:

Job oriented professional/ Technical Graduation Degree


courses/ Post Graduation Degree and Diploma courses like MCA,
MBA, MS, etc offered by reputed universities

Expenses considered for loan

Fees payable to College/School/Hostel


Examination/Library/Laboratory fees

Purchase of Books/Equipment/Instruments/Uniforms, Purchase of


computers- essential for completion of the course (maximum 20%
of the total tuition fees payable for completion of the course)

Caution Deposit/Building Fund/Refundable Deposit (maximum


10% tuition fees for the entire course)

Travel Expenses/Passage money for studies abroad

Cost of a Two-wheeler up to Rs. 50,000/-

Any other expenses required to complete the course like study tours,
project work etc.

Amount of Loan

For studies in India, maximum Rs. 10 lacs


Studies abroad, maximum Rs. 30 lacs

EDUCATION LOANS SBI Student Loan Scheme


Loan Amount

Rate of Interest*

For loans up to Rs.4 lacs

3.50% above Base Rate, currently 13.30% p.a.

Above Rs.4 lacs and up to


Rs.7.50 lacs
Above Rs.7.50 lacs

3.75% above Base Rate, currently 13.55% p.a.

1.75% above Base Rate, currently 11.55% p.a.

*(0.50% concession in interest for girl students)


* (1% concession for full tenure of the loan, if interest is serviced
promptly as and when applied during the moratorium period,
including course duration#)

SBI Scholar Loan Scheme


ROI
List A 100bps above base rate i.e., 10.80% p.a. at present
Further concessions:
25 bps - work experience of more than 2 years
50 bps with parent/ spouse/ guardian as co-borrowers
75 bps - collateral security >= the loan amount
(Effective rate of interest with all 3 concessions above not to be lower
than 25 bps above base rate, presently 10.05 % p.a.)
List B

175bps above Base rate i.e. 11.55% p.a.


1% concession for full tenure of the loan, if interest is serviced
promptly as and when applied during the moratorium period,
including course duration#

IT exemption under Section 80(E) in respect of interest paid in


all Education Loans

SBI Loan Scheme for Vocational Education and Training

3.50% above Base Rate, currently 13.30% p.a.


1% concession for full tenure of the loan, if
interest is serviced promptly as and when

applied during the moratorium period,


including course duration#

Note: 1% interest concession for servicing interest is available if


interest is serviced promptly soon after application but not later than
the following month.

ALL INTEREST RATES ARE SUBJECT TO CHANGE, WITHOUT


NOTICE.

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

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

Maximum Loan
Limit

Repayment Period

Up to Rs. 4 Lacs
5-7 years
Above Rs. 4 Lacs and up 5-7 years
to Rs. 7.5 Lacs
Above Rs. 7.5 Lacs
Up to 12 years

Security
Particular
Up to Rs. 4 lacs
loan amount
Above Rs. 4 lacs
to Rs. 7.50 lacs
loan amount

Security
Only Parent/ Guardian as co-borrower
Parent/ Guardian as co-borrower and Collateral security in
the form of suitable third party guarantee*.
*Third Party Guarantee can be replaced with
Parent/Guardian as co-borrower provided the Gross Annual
Income of Parent/Guardian (co-borrower) as given in latest
Income Tax Return is 3 times of the loan amount.

Above Rs. 7.50


Parent/ Guardian as co-borrower and tangible collateral
lacs loan amount security
In case of married person, co-obligator can be either spouse or the
parent(s)/ parents-in-law

Margin

For loans up to Rs.4.0 lacs : No Margin


For loans above Rs.4.0 lacs:
o

Studies in India: 5%

Studies Abroad: 15%

Documentation

Required

Completed Education Loan Application Form.


Mark sheets of last qualifying examination

Proof of admission scholarship, studentship etc

Schedule of expenses for the specified course

2 passport size photographs

PAN Card of the student and the Parent/ Guardian

Borrower's Bank account statement for the last six months

Income tax Returns/ IT assessment order, of last 2 yrs (If IT Payee)

Brief statement of assets and liabilities, of the Co-borrower

Proof of Income (i.e. Salary slips/ Form 16 etc. if applicable)

MOST IMPORTANT TERMS AND


CONDITIONS
SBI-STUDENT LOAN SCHEME

1. Purpose for which the loan can be availed:


The loan will be sanctioned for extending financial assistance to
deserving/meritorious students for pursuing higher education in India and
abroad.
2. Courses Eligible:
a. Studies in India:
Graduation, Post-graduation including regular technical and
professional Degree/Diploma courses conducted by colleges/universities
approved by UGC/ AICTE/IMC/Govt. etc
Regular Degree/ Diploma Courses conducted by autonomous
institutions like IIT, IIM etc
Teacher training/ Nursing courses approved by Central government or
the State Government
Regular Degree/Diploma Courses like Aeronautical, pilot training,
shipping etc. approved by Director General of Civil Aviation/Shipping
Vocational Training and skill development study courses will not be
covered under the Education Loan Scheme,
A separate scheme for
Loans for Vocational Education and Training has been launched Which
covers financing for such Vocational courses
b. Studies abroad:
Job oriented professional/ technical Graduation Degree courses/

Post Graduation Degree and Diploma courses like MCA, MBA, MS, etc
offered by reputed universities
Courses conducted by CIMA (Chartered Institute of Management
Accountants) -London, CPA(Certified Public Accountant) in USA etc.
3. Student Eligibility:
Should be an Indian National
Secured admission to Professional/Technical courses through entrance
Test/Selection process.
Secured admission to foreign university/Institutions.
No minimum qualifying marks stipulated in the last qualifying
examination
4. Expenses Considered for Loan:
Fee payable to college/school/hostel: Where the student will be making
his own boarding and lodging arrangements, the sanctioning authority is
authorized to fund boarding and lodging expenses on the basis of estimate
submitted by the student/ parent, provided such expenses are not more
than those charged by the educational institution for boarders.
Examination/Library/Laboratory fee.
Purchase of books/ equipments/ instruments/ uniforms, Purchase of
computers-essential for completion of the course.
Any other expense required to complete the course-like study tours,
project work, thesis, etc. considered for loan is capped at
20% of the total tuition fees payable for completion of the course.
Caution deposit /building fund/refundable deposit supported by
Institution bills/receipts the amount considered for loan should not exceed
10% of the tuition fees for the entire course.
Travel expenses/passage money for studies abroad.
Cost of a two-wheeler up to Rs. 50,000 can be included in the expenses
considered eligible for finance where the loan amount is secured by a
suitable third party guarantee and/or tangible collateral security. Twowheeler can be necessary in some cases where hostel and college are far
apart
Premium of the insurance policy covering the life of the borrower for
loan
5. Maximum Loan Amount:
Studies in India -Maximum Rs. 10.00 lacs
Studies Abroad -Maximum Rs. 30.00 lacs

6. Margin: Up to 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

as and

when disbursements are made, on a pro-rata basis.


7. Security:
a) Up to Rs. 4 lacs
Co-obligation of parents
No security
b) Above Rs. 4 lacs and up to Rs.7.50 lacs
Co-obligation of parents together with collateral security in the form of
suitable third party guarantee.
The sanctioning authority can replace Third Part Guarantee with
Parent/ Guardian as co-borrower provided the Gross Annual income of
Parent/ Guardian (co-borrower) as verified by the latest
Income Tax Return is 3 times the loan amount.
c) Above Rs.7.50 lacs
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 instalments. 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 student/ parent/ guardian or any other third party.
The documents should be executed by both the student and the
parent/guardian as joint-borrower. We clarify that if the student is a minor,
the documents will be signed by the guardian acting `for self as well as
`for and on behalf of the minor.
The co-obligator should be parent(s)/guardian of the student borrower.
In case of married person, co-obligator can be spouse or the
parent(s)/parents in-law.
8. Processing Charges:
No processing/upfront charges may be collected on educational loans.
For loans to students going abroad:
All those students who approach us for an education loan of more than
Rs.4.00 lacs for studies abroad will be required to make a deposit of
Rs.5000/-which will be adjusted against the contribution of margin money

or the interest payable on the loan, in case the loan is availed by the
applicant. If the applicant does not avail the loan within a period of 4
months of sanction of the loan, the amount will be forfeited.
9. Interest Charges: Loan Amount
Rate of Interest*
For loans up to Rs.4 lacs 3.50% above Base Rate, currently 13.20% p.a.
Above Rs.4 lacs and up to Rs.7.50 lacs 3.75% above Base Rate, currently
13.45% p.a.
Above Rs.7.50 lacs 1.75% above Base Rate, currently 11.45% p.a.
a.0.50% concession in interest rate for girl students availing
Education Loans with effect from 2nd March 2009
b.1% concession in rate of interest to be provided for full tenure of the
loan if full interest is serviced during the moratorium period (including
course duration). The interest should be serviced promptly soon after
application but not later than the following month to avail the concession
c. As the concession of 1% is available for servicing interest during
moratorium, interest in the loan a/c should be reset when the repayment
starts and excess interest of 1% p.a. pertaining to the study period and
moratorium period should be refunded/ credited to the loan a/c.
d. Simple interest to be charged during moratorium period.
e. Penal interest @ 2% to be charged for loans above Rs. 4 lacs for the
overdue amount and overdue period.
10. Sanction & Disbursement:
The loan is generally sanctioned at the branch nearest to the permanent
residential address/place of domicile of the student/parents.
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.
For studies in India, in genuine cases, the tuition fee already paid to the
institute by the borrower from their own sources for first semester at the
time of counselling/ admission may be considered for reimbursement
provided the reimbursement is claimed within 6 months of the payment.
11. Repayment:
Repayment Holiday/ Moratorium: Course period + 1 year, or 6 months
after getting job, whichever is earlier.
Maximum Loan Limit
Repayment Period Up to Rs. 4 Lacs5-7 years
Above Rs. 4 Lacs and up to Rs. 7.5 Lacs 5-7 years

Above Rs. 7.5 Lacs Up to 12 years


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.
The accrued interest during the moratorium period/repayment holiday
period to be added to the principal and repayment to be fixed in Equated
Monthly Installments (EMI).

12. Top Up Loan


Second loan (Top Up) Loan within the overall limit is permitted to pursue
a professional course in India or abroad provided such further studies are
commenced during the moratorium period of the first loan and subject to
the second loan being allowed with the security requirements as
applicable to the aggregate loan limit. The projected income of the
student, after placement, should be sufficient to cover full loan repayment.
As the student will not be able to take up a job after completion of the
first course, his obligation to repay the loan after one year of completion
of the first course would also need to be deferred. In such cases, the
moratorium period may be extended for the duration of the second course
and the combined repayment shifted to one year after the completion of
the second course, or 6 months after
taking up a job whichever is earlier
13. Timeline for Disposal of Loan Application Maximum15 days, after
the receipt of duly completed application with supporting documents.
Customer Service:
For any service related issue, customer can get in touch with SBI:
Calling Customer Help Line Numbers
Contact Customer Grievance Cell at our Local Head Offices

Write to Grievance Cell at our Local Head Offices


(Details on Help line Numbers and Grievance Cell available on
www.sbi.co.in)
In case a customer is not satisfied with the handling of grievance by the
Local Head Office, a communication may be sent (enclosing the message
sent earlier to Local Head Office) to the-Deputy General Manager
(Customer Service), Customer Service Dept, State Bank of India;

State Bank Bhawan, 4th floor;


Madame Cama Road,
Mumbai-400 021,
Telephone No: 22029456, 22740431, 22740432, 22740433
Fax no. (022) 22742431
E-mail address -dgm.customer@sbi.co.in.

Credit Information Report.


Terms & Conditions mentioned herein are subject to change without prior
notice.

History of Punjab National Bank


Punjab National Bank was registered on 19 May 1894 under the Indian
Companies Act , with its office in Anarkali Bazaar, Lahore. The founding
board was drawn from different parts of India professing different faiths
and a varied back-ground with, however, the common objective of
providing country with a truly national bank which would further the
economic interest of the country. PNB's founders included several leaders
of the Swadeshi movement such as Dyal Singh Majithia and Lala
Harkishan Lal, Lala Lalchand, Shri Kali Prosanna Roy, Shri E.C.
Jessawala, Shri Prabhu Dayal, Bakshi Jaishi Ram, and Lala Dholan Dass.
[2] [3]
Lala Lajpat Rai was actively associated with the management of the
Bank in its early years. The board first met on 23 May 1894. Ironically,
the PNB Website now claims Lala Lajpat Rai to be the founding father,
surpassing Rai Mul Raj and Dyal Singh Majithia.[4] The bank opened for
business on 12 April 1895 in Lahore.
PNB has the distinction of being the first Indian bank to have been started
solely with Indian capital that has survived to the present. (The first
entirely Indian bank, Commercial Bank, was established in 1881
in Faizabad, but failed in 1958.)
PNB has had the privilege of maintaining accounts of national leaders
such as Mahatma Gandhi, Shri Jawahar Lal Nehru, Shri Lal Bahadur
Shastri, Shrimati Indira Gandhi, as well as the account of the
famous Jalianwala Bagh Committee.

SCHEME OF EDUCATION
LOAN FROM PUNJAB
NATIONAL BANK

The Scheme aims at providing financial assistance to deserving /


meritorious students (Indian Nationals) for pursuing higher professional
and technical education in India or abroad.

Studies in India
1.

Approved courses leading to Graduate/ Post Graduate degree and


PG Diplomas conducted by recognized colleges/ universities
recognized by UGC/ Govt./ AICTE/ AIBMS/ ICMR etc.

2.

Courses like ICWA, CA, CFA etc.

3.

Courses conducted by IIMs, IITs, IISc, XLRI. NIFT, NID etc.

4.

Regular Degree/Diploma courses like Aeronautical, pilot training,


shipping, nursing etc., approved by Director General of Civil
Aviation/Shipping, if the course is pursued in India.

5.

Approved courses offered in India by reputed foreign universities.

6.

Admission under Management Quota may also be considered.

7.

for studying part-time job oriented courses (evening classes or


otherwise), which are approved/recognized by the regulatory body/
authority.

8.

Job oriented specialized programmes like maritime courses which


are offered in collaboration with foreign institutions and may not be
having recognition in India.

Studies abroad
i) Graduation: For job oriented professional/technical courses offered by
reputed universities.
ii) Post graduation: MCA, MBA, MS, etc.
iii) Courses conducted by CIMA- London, CPA in USA etc.
iv) Degree/Diploma courses* like aeronautical, pilot training, shipping
etc. provided these are recognized by competent regulatory bodies in
India/abroad for the purpose of employment in India/abroad.
*Diploma Course and certificate courses shall not be covered under the
eligible courses for study abroad except as mentioned above.

Eligibility:
Student eligibility
a)

Should be an Indian National.

b)

Should have secured admission to a higher education course in


recognized institutions in India or Abroad through Entrance
Test/ Merit Based Selection process after completion of
HSC(10 plus 2 or equivalent). OR Where the admission is
purely based on marks scored in qualifying examinations, there
is a cut off percentage of marks of 50% for SC/ST and 60% for
General category.

Expenses considered for Loan


1.

Fee payable to College / School / Hostel

2.

Examination / Library / Laboratory fee.

3.

Purchase of books / equipments / instruments / uniforms.

4.

Caution Deposit / Building Fund / Refundable Deposit supported


by Institution Bills / Receipts,

5.

Travel Expenses / Passage money for studies abroad.

6.

Purchase of computers at reasonable cost, if required for


completion of the course.

7.

Insurance premium for student borrower, if applicable

8.

Any other expense required to complete the course - like study


tours, project work, thesis etc.

Quantum of Finance
Need based finance, subject to employability and earning potential of the
student with prescribed margin as per the following ceilings :-

For studies in India: Maximum Rs.10.00 lacs.


For studies abroad: Maximum Rs.20.00 lacs.

Margin
Up to Rs.4.00 lacs
Nil.
Above Rs.4.00
lacs

Studies in
India
Studies

5%
15%

Abroad

Security

Up to Rs.4.00 lacs:
Above Rs 4.00 lacs and Up to Rs
7.5 lacs:
Above Rs 7.5 lacs:

Parent(s)/guardian be made joint


borrower (s). No Security
Besides the parent(s)/guardian executing
the documents as joint borrower(s),
collateral security in the form of suitable
third party guarantee will be taken
Parent(s)/guardian be joint
borrower(s).Tangible collateral security of
suitable value acceptable to bank along
with the assignment of future income of
the student for payment of installments

The security can be in the form of land / building / Govt. Securities /


Public Sector Bonds / Units of UTI, NSC, KVP, LIC Policy, Gold, Shares/
Mutual Funds/ Debentures, Bank Deposit in the name of the student
parent / guardian or any other third party or any other tangible security
acceptable to the bank with suitable Margin.

Repayment
Repayment of loan will be in equated monthly instalments (EMIs) for
period as under:
For loans up to Rs.7.50 lakh- up to 10 years
For loans above Rs.7.50 lac

- upto 15 years

Repayment holiday/Moratorium:

Course period + 1 year or 6 months after getting job, whichever is


earlier.
Note : No prepayment penalty is levied for prepayment of loan.

Sanctioning Authority may consider telescoping of the repayment with


stepped up installment with passage of time over the repayment period
in cases where salary levels at the start of the career do not facilitate
comfortable payment of EMI (e.g. professionals like Doctors)
Upfront Fee
For Study in India - Nil
For Study abroad - 1% with a minimum of Rs. 10,000/-(refundable
on availment of the loan amount)

Documentation Charges

Up to Rs. 4 lacs

Rs.270/- + Service Tax & Education Cess

Above Rs.4 lacs

Rs.450/- + Service Tax & Education Cess

Additional Benefits provided to the students by PNB

Simple interest is charged during the Study period + Moratorium period.

A rebate of 0.50% in rate of interest permitted to women beneficiaries for


loans up to Rs. 10 Lakh for studies in India and Rs 20 Lakh for studies
abroad for existing as well as new girl student borrowers.

1% interest concession may be provided for loaners if the interest is


serviced during the study period/moratorium period and regular repayment
of monthly installments during repayment period.

The loan be disbursed in stages as per the requirement/ demand directly to


the Institutions/ Vendors of equipments/ instruments to the extent possible.

Second time Education Loan can be sanctioned to the same student


borrower for completion of next higher course.
Full interest subsidy is provided during the moratorium period to students, who
have taken education loan and belong to Economically Weaker Section (EWS),
with an annual gross parental family income upper limit of Rs.4.50 lakh per year
from all sources. Detail is as under:

Central Scheme to provide Interest Subsidy- (CSIS)

The scheme provides full interest subsidy during the period of moratorium on
education loans taken by EWS students for pursuing any of the approved courses
of studies in technical / professional streams from recognized institutions in India.

Applicability

Linked with the existing education loan scheme of IBA and is restricted to
students enrolling in recognized professional courses ( after class XII) in India, in
educational institutions established by Act of Parliament, other institutions
recognized by the concerned statutory body, IIMs and other institutions set up by
the Central Government .

Also applicable to the students of accredited universities/ institutions and


recognized professional courses, as per Annexure I, which is administered by the
Ministry of Tourism.

Moratorium Period

Course Period plus one year or six months after getting job, whichever is earlier.

Income Limit / Proof

To avail the benefit, Income certificates issued by designated state authorities to


be submitted. Details available with branches. List of issuing authority as per
Annexure II

Eligibility for Subsidy

The interest subsidy shall be available to the eligible students only once, either for
the first undergraduate degree course or the post graduate degrees / diplomas in
India inclusive of integrated courses (graduate + post graduate).

Interest subsidy under this scheme shall not be available for those students who
either discontinue the course midstream or who are expelled from the Institutions
on disciplinary or academic grounds.

However, the interest subsidy will be available for the actual period of study, only
if the discontinuation was due to medical grounds for which necessary
documentation to the satisfaction of the Head of educational institution will have
to be given.
Interest Rates- Loans & Advances

BPLR - 14 % ( w.e.f. 01.05.2012)


BASE RATE - 10.25 % ( w.e.f from 09.02.2013)

Existing borrowers have the option to continue with the existing BPLR
System till expiry of their existing contract with the bank or shift to the Base
Rate System for which they may contact the concerned branch.

DATA
ANALYSIS&INTERPROTATION
3.1COMPARITIVE STUDY OF EDUCATION LOAN
SANCTIONED PANJAB NATIONAL BANK & STATE
BANK OF INDIA IN 2010-11
BANK
SATE BANK OF INDIA
PUNJAB NATIONAL BANK

INTREST RATE UP TO 4 LACS

12.50%
10.50%

In the above table we can see the intrest rate of education loan
PUNJAB NATIONAL BANK & STATE BANK OF INDIA.
Punjab national bank is 10.50% & SBI is 12.50% p.a...The
intrest rate of loan amount up to 4 lacs there is no security
required. The actual interst rates at which an individual will be

able to get a education loan depend on individual financial


profile & negotiating ability.

COMPARITIVE STUDY OF EDUCATION LOAN


SANCTIONED PANJAB NATIONAL BANK & STATE
BANK OF INDIA IN 2010-11
BANK

INTREST RATE UP TO 4 LACS


TO 7.5 LACS

SATE BANK OF INDIA


PUNJAB NATIONAL BANK

13.25%
11.25%

In the above table we can see the intrest rate of education loan
PUNJAB NATIONAL BANK & STATE BANK OF INDIA.
Punjab national bank is 11.25% & SBI is 13.25% p.a...The
intrest rate of loan amount above Rs.4lacs & up to Rs.7.5 lacs
there is no security required. The actual interst rates at which an
individual will be able to get an education loan depend on
individual financial profile & negotiating ability.

COMPARITIVE STUDY OF EDUCATION LOAN


SANCTIONED PANJAB NATIONAL BANK & STATE
BANK OF INDIA IN 2010-11.
BANK

INTREST RATE ABOVE 7.5


LACS

SATE BANK OF INDIA


PUNJAB NATIONAL BANK

13.25%
11.25%

In the above table we can see the intrest rate of education loan
PUNJAB NATIONAL BANK & STATE BANK OF INDIA.
Punjab national bank is 11.25% & SBI is 13.25% p.a...The
intrest rate of loan amount above Rs.7.5lacs there is security
required. The actual interst rates at which an individual will be
able to get an education loan depend on individual financial
profile & negotiating ability.

3.2COMPARITIVE STUDY OF EDUCATION LOAN


SANCTIONED PANJAB NATIONAL BANK & STATE
BANK OF INDIA IN 2011-12.
BANK
SATE BANK OF INDIA
PUNJAB NATIONAL BANK

INTREST RATE UP TO 4 LACS

12.00%
10.25%

In the above table we can see the intrest rate of education loan
PUNJAB NATIONAL BANK & STATE BANK OF INDIA.
Punjab national bank is 10.25% & SBI is 12.00% p.a...The
intrest rate of loan amount up to 4 lacs there is no security
required. The actual interst rates at which an individual will be
able to get a education loan depend on individual financial
profile & negotiating ability.

COMPARITIVE STUDY OF EDUCATION LOAN


SANCTIONED PANJAB NATIONAL BANK & STATE
BANK OF INDIA IN 2011-12.
BANK
SBI
PNB

RATE OF INTREST ABOVE


4 LACS UP TO 7.5 LACS
13.05%
10.75%

In the above table we can see the intrest rate of education loan
PUNJAB NATIONAL BANK & STATE BANK OF INDIA.
Punjab national bank is 11.25% & SBI is 13.55% p.a...The
intrest rate of loan amount above Rs.4lacs & up to Rs.7.5 lacs
there is no security required. The actual interst rates at which an
individual will be able to get an education loan depend on
individual financial profile & negotiating ability.

COMPARITIVE STUDY OF EDUCATION LOAN


SANCTIONED PANJAB NATIONAL BANK & STATE
BANK OF INDIA IN 2011-112
BANK

INTREST RATE ABOVE 7.5


LACS

SATE BANK OF INDIA


PUNJAB NATIONAL BANK

13.05%
10.25%

In the above table we can see the intrest rate of education loan
PUNJAB NATIONAL BANK & STATE BANK OF INDIA.
Punjab national bank is 10.25% & SBI is 13.05% p.a...The
intrest rate of loan amount above Rs.7.5lacs there is security
required. The actual interst rates at which an individual will be
able to get an education loan depend on individual financial
profile & negotiating ability.

3.3 COMPARITIVE STUDY OF EDUCATION LOAN


SANCTIONED PANJAB NATIONAL BANK & STATE
BANK OF INDIA IN 2012-13

BANK
SATE BANK OF INDIA
PUNJAB NATIONAL BANK

INTREST RATE UP TO 4 LACS

13.30%
10.50%

In the above table we can see the intrest rate of education loan
PUNJAB NATIONAL BANK & STATE BANK OF INDIA.
Punjab national bank is 10.50% & SBI is 13.30% p.a...The
intrest rate of loan amount up to 4 lacs there is no security
required. The actual interst rates at which an individual will be
able to get a education loan depend on individual financial
profile & negotiating ability.

3.2 COMPARITIVE STUDY OF EDUCATION LOAN


SANCTIONED PANJAB NATIONAL BANK & STATE
BANK OF INDIA IN 2012-13

BANK
SBI
PNB

RATE OF INTREST ABOVE


4 LACS UP TO 7.5 LACS
13.55%
11.25%

In the above table we can see the intrest rate of education loan
PUNJAB NATIONAL BANK & STATE BANK OF INDIA.
Punjab national bank is 11.25% & SBI is 13.55% p.a...The
intrest rate of loan amount above Rs.4lacs & up to Rs.7.5 lacs
there is no security required. The actual interst rates at which an
individual will be able to get an education loan depend on
individual financial profile & negotiating ability.

3.3 COMPARITIVE STUDY OF EDUCATION LOAN


SANCTIONED PANJAB NATIONAL BANK & STATE
BANK OF INDIA IN 2012-13
BANK

INTREST RATE ABOVE 7.5


LACS

SATE BANK OF INDIA


PUNJAB NATIONAL BANK

11.55%
10.00%

In the above table we can see the intrest rate of education loan
PUNJAB NATIONAL BANK & STATE BANK OF INDIA.
Punjab national bank is 10.00% & SBI is 11.55% p.a...The
intrest rate of loan amount above Rs.7.5lacs there is security
required. The actual interst rates at which an individual will be
able to get an education loan depend on individual financial
profile & negotiating ability.

Summary of findings bank strategy of education loan

1. Frequent changes in regulation made by central bank affect the banks


to a larger extent because banks has to follow according to the directions
given by the central bank which reduces the profit of the bank.
2. Now a days banks cannot charge their own management interest rates
they are force to look the market and follow according to the RBI rules
and regulations, this has unable them to balance both the income and
expenses ,for eg., now the fixed deposit interest rate is 10.5% and is
housing loan interest rate is 8.5%, they have the bear the loss of -2%
which the banks have to pay themselves.
3. Middle class people cannot afford to the current interest rate, it is too
expensive for them. 4. Procedures for applying the loan is very time
consuming , lengthy and very complicated.
5. Inflation has also affected the banks indirectly.
6. Political pressures.
7. Sanctioning of loan is not easy, it takes longer time.
8. Misappropriation in the bank.

Suggestion and recommendation

Suggestion and recommendation Banks should go for


advertisement Campaign from Scratch. Banks should try to cash
its brand image. Strong branch network should be made and staff
personnels incentives should be increased. Banks 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 Pamphlets 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.

Conclusion

Conclusion On the basis of above findings and comparison


among PNB & SBI it is clearly observe that public 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 by public banks Interest rates are vary from 10.25% to
13.25% p.a and PNB uses PTLR system. 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 public
banks Margin is same in PNB & SBI i.e. Upto Rs. 4.00 lacs : Nil
Above Rs. 4.00 lacs : Studies in India 5% Studies in Abroad
15% PNB & SBI charge processing fees .Deposit of Rs. 5000/for education loan for studies abroad which will be adjusted in
the margin money.

BIBILIOGRAPHY
Books referred:
Dr.P.C.Tulasian, Financial Management, 1st edition, S.Chand
Publication, Pg.no.13.13 - 13.15
E.Dharmaraj, Financial Services, 1st edition, S.Chand Publication,
Pg.no.65 - 72.
K.D. Basava Elements of Indian economics page no 10.5 12th edition
of loan compendium- retail banking schemes.
Websites:www.pnb .com
www.statebankofIndia.com
www.pnb.com
www.apnaloan.com
www.timesofmoney.com
www.pnbhfl.com 71

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