Professional Documents
Culture Documents
ON
Educational Loan
Of
Central Bank of India
2. Introduction to loans
• Loans
• Types of loans
• History
• Recent news/initiatives
Scope of loans
The scope of the loans is vast. It deals with that topic of income eligibility,
Annual or monthly installments, late payment charges, interest rates. In this
Study above points are taken to compare the loan of cbi bank with respect to
Other issuers of loans. By this way of studying we can find out the image of
the cbi educational loan with other financial institutions.
Type of Research:
This is basically an analytical study. The study aims at analyzing the impact
of loans on the consumers.
A loan is a type of debt. Like all debt instruments, a loan entails the
redistribution of financial assets over time, between the lender and
the borrower.
In a loan, the borrower initially receives or borrows an amount
of money, called the principal, from the lender, and is obligated
to pay back or repay an equal amount of money to the lender at a
later time. Typically, the money is paid back in regular installments, or
partial repayments; in an annuity, each installment is the same
amount. The loan is generally provided at a cost, referred to
as interest on the debt, which provides an incentive for the lender to
engage in the loan. In a legal loan, each of these obligations and
restrictions is enforced by contract, which can also place the borrower
under additional restrictions known as loan covenants. Although this
article focuses on monetary loans, in practice any material object
might be lent.
Acting as a provider of loans is one of the principal tasks for financial
institutions. For other institutions, issuing of debt contracts such
as bonds is a typical source of funding.
Types of loans
Secured
Unsecured loans are monetary loans that are not secured against the
borrower's assets. These may be available from financial institutions
under many different guises or marketing packages:
Demand
Demand loans are short term loans that are atypical in that they do not have
fixed dates for repayment and carry a floating interest rate which varies
according to the prime rate. They can be "called" for repayment by the
lending institution at any time. Demand loans may be unsecured or secured.
Loan payment
The most typical loan payment type is the fully amortizing payment in
which each monthly rate has the same value overtime. It varies with
the type if loan
Education Loans
Educational loans work like any other debt. That is, loans
are simply specific money that you borrow from a bank, a
private lender, or some other type of lender. Afterwards,
you must repay your debts with interest. However, unlike
other types of loans, educational loans are different in
several respects
The lending sector has commendably recognized the hurdle for these
students and has acted upon the issue to make higher education
feasible by introducing the facility of easy loans for students. The
most beneficial feature of the creation of these types of loans is that
They are easy to acquire. Student usually have a very liberalized set
of terms and conditions governing them, which hence makes them
apt for the purpose for which they have been created - grant of loan
assistance for education.
Scholarships were one of the traditional grants that were provided to
students who had a greater strength to assimilate knowledge. The
scholarships were of formal and informal nature in the earlier times,
and it was also viable for rulers, governments, nobility and
universities to nurture the process of learning within the intelligence of
the selected few, by the provision of scholarships. The advancement,
expansion and spurt of science, commerce and arts after the
Renaissance has made the sphere of learning and education so
extensive that it is beyond the reach of the government to provide
fiscal assistance to all scholars who wish to embark upon a voyage of
scholastic learning.
The fast, easy student loans have thus increased the probability of
more and more students undertaking higher education. The credit
reach of lenders who are willing to induct new loan schemes into their
already existing segments have started taking up new student loans
based in the seed of time. To name a few we may state loans such
as, 'Easy Private Student Loans' or 'Quick and Easy Student Loans'
or 'Easy Student Loans with Bad Credit'.
In a quick sweep it can be said that as these loans are student loans,
easy approval is the most evident feature. The approval of this type of
loan basically depends upon the meritorious records of the applicant.
The other two factors that play a deciding role are the credit history of
the student and the fiscal consideration that has to be paid for the
higher education. The current credit rating and scores are not deeply
assessed, which makes the process faster and hassle free.
Upon the use of the easy loans for students. The Ministries of
Education also maintain a strict check on the approval process of
these loans which makes student loans easy to get
The third merit is the privilege of installments of the easy loans for
students. The installments of these loans start after the student
successfully completes his/her education. The total amount of the
loans is repaid over a reasonably spanned time period and a minimal
rate of interest is levied.
1. Interest rates
the first and the foremost is the interest rates charged on
the education loan. This interest rate is the primary factor
that earns money for banks and so they want it to be
higher, but the competition in the loan market makes the
bank keep it to a level where the education loan seems
affordable to the customer, while it earns money for the
banks too. Whether the interest rate charged on your
education loan is fixed or floating is also a matter of
concern. Generally, the value of fixed interest rates is higher
than the floating interest rates. Going for floating interest
rates in this low interest regime is always a better option.
1. INTRODUCTION:
4. ELIGIBILITY CRITERIA :
4.1 Student eligibility:
b. Studies abroad :-
5. QUANTUM OF FINANCE:
6. MARGIN :
7. SECURITY :
Note:-
8. RATE OF INTEREST :
Upto Rs 4
BPLR
lacs
Above Rs. 4 BPLR +
lacs 1%
Simple interest to be charged during the Repayment
holiday/ Moratorium period.
Penal interest to be charged as applicable to individual
banks.
10. REPAYMENT:
Repayment Course period + 1 year or 6 months
holiday/Moratorium after getting job, whichever is earlier.
11. INSURANCE
Banks
Introduction of CBI
Mr. S Sridhar [Ex CMD National Housing Bank] has been appointed as the
Chairman and Managing Director of state-run Central Bank of India as on 2
March 2009. The post had been lying vacant and the appointment was
cleared by the government, the Bank said in a statement. To improve the
Bank's capital adequacy ratio and enable it to support the credit requirements
of the productive sectors of the economy, the Centre has recently decided to
infuse Rest 1,400 core in the Bank. Under the proposed capital infusion
plan, Central Bank of India will get Rs 700 crore by this month-end, while
the balance amount will be made available to the Bank in next fiscal.
Central bank of India is one of 18 Public Sector banks in India to get
recapitalisation finance from the government over the next 24 months. The
infusion of fund will improve the financial health of the banks as their
capital adequacy ratio (CAR) will be raised more than desired level of 12
percent. The increase in CAR of the banks will also enable them to lend
more money. The CAR of Central Bank of India was less than 12 percent as
on June 30 2006.
At a time when the global banking industry is feeling the pinch of the global
credit crunch, Central Bank of India is planning to expand its foreign
presence. The public-sector lender has approached the Reserve Bank of
India (RBI) for permission to open representative offices in five locations -
Singapore, Dubai, Doha, London and Hong Kong. This is the first time the
bank is venturing an independent overseas foray after the Sethia scam in the
1970s forced the bank to close down its London office. RBI had then asked
the other two banks, who had operations in London, to close down.
As on March 31, 2006, the bank's reserves and surplus stood at Rs. 1,810.19
crore. Its total business at the end of the last fiscal amounted to Rs. 1,05,677
crore.The bank had a staff strength of 37,241 as on Nov 2006.
Central Bank of India partnered with TCS[ Tata Consultancy Services ] for
its Core Banking Solution. The solution set to be implemented will include
B@NCS from Sydney-based Financial Network Solutions (FNS), Exim
Bills Trade Finance software from China Systems and eTreasury from TCS.
With 703 banks in the core banking system (CBS), it was planned that by
the end of March 2008 a total of 1,000 branches would be brought under the
CBS.As of 31 March 2006, the bank achieved a landmark: crossing a
business mix of Rs. 1,05,000.00 crores. The next target has been fixed at
doubling this figure in the next three years. Krishnan Subharamaniam,
Executive Director of the bank, in his message to staff members, has called
upon them to achieve the target and suggested some steps. One of these
steps is to change the manner in which employees extend service to
customers across different delivery channels. He has advocated the adoption
of the '3R' principles when dealing with customers - recognition, respect and
response. This is asserted to be the path to make customers experience
'Customer
History
In 1923, it acquired the Tata Industrial Bank in the wake of the failure of
the Alliance Bank of Simla.
Established in 1911, Central Bank of India was the first Indian commercial
bank which was wholly owned and managed by Indians. The establishment
of the Bank was the ultimate realisation of the dream of Sir Sorabji
Pochkhanawala, founder of the Bank. Sir Pherozesha Mehta was the first
Chairman of a truly 'Swadeshi Bank'. In fact, such was the extent of pride
felt by Sir Sorabji Pochkhanawala that he proclaimed Central Bank of India
as the 'property of the nation and the country's asset'. He also added that
'Central Bank of India lives on people's faith and regards itself as the
people's own bank'.
During the past 98 years of history the Bank has weathered many storms and
faced many challenges. The Bank could successfully transform every threat
into business opportunity and excelled over its peers in the Banking
industry.
Subsequently, even after the nationalisation of the Bank in the year 1969,
Central Bank continued to introduce a number of innovative banking
services as under:
1976 The Merchant Banking Cell was established. 1980 Centralcard, the
credit card of the Bank was introduced. 1986 'Platinum Jubilee Money Back
Deposit Scheme' was launched. 1989 The housing subsidiary Cent Bank
Home Finance Ltd. was started with its headquarters at Bhopal in Madhya
Pradesh. 1994 Quick Cheque Collection Service (QCC) & Express Service
was set up to enable speedy collection of outstation cheques.
Further in line with the guidelines from Reserve Bank of India as also the
Government of India, Central Bank has been playing an increasingly active
role in promoting the key thrust areas of agriculture, small scale industries as
also medium and large industries. The Bank also introduced a number of
Self Employment Schemes to promote employment among the educated
youth.Among the Public Sector Banks, Central Bank of India truly described
as an All India Bank, due to distribution of its large network in 27 out of 28
States as also in 4 out of 7 Union Territories in India. Central Bank of India
holds a very prominent place among the Public Sector Banks on account of
its network of 3413 branches and 237 extension counters.
Recent
News/ Initiatives
• Central Bank of India launched Visa Platinum and Visa Gold cards
• Central Bank of India was conferred with the 1st Award under National Awards
for Excellence in MSE Lending based on its outstanding performance in lending
to Micro and Small Enterprises during the year 2007-08.
• On December 29, 2008, Kotak Mahindra Asset Management Company, one of
India's leading mutual fund houses, entered into a distribution tie-up with Central
Bank of India. Under the agreement Central Bank of India will offer the entire
bouquet of Kotak Mutual Fund products from the Bank's branches.
• The Bank has been in the forefront in business growth also. The total business of
the Bank sharply increased by 124% touching the level of Rs.1,97,162/- as of 30
September, 2008 from Rs. 87,857 crore as of 30 June, 2005.
• The Core Banking System (CBS) of the Bank covers 77% of its business. And, all
CBS Branches have been enabled for both RTGS and NEFT services.
• IT Enabled Financial Inclusion at Hoshangabad which will bring the financial
services to the door steps of those who are living in remotest parts of the country.[]
The Bank will deliver deposit, loan and other financial services by engaging
Business Correspondent, who will use hand-held mobile devices and issue Smart
Cards to the customers.
• In order to develop rural entrepreneurship, the Bank launched a Rural
Development and Self Employment Training Institute (Rudseti) at Hoshangabad.
This will provide intensive entrepreneurship training
• rural youth, to enable them to take up vocational activities. The Bank has already
set Rudsetis at Kota and Muzaffarpur.
• A Financial Literacy and Credit Counseling Centre - Centsahyog was launched at
Vadkun in Thane District.
• The Bank also launched Perizaad Zorabian, a well-known personality in the film
Ambassador.
• Operating Profit of the Bank was up by 13.28% at Rs. 1,436.74 crore in 2008-09
over the Operating Profit industry as its Brand of Rs. 1,268.30 crore in 2007-08.
• Net Profit of the Bank in 2008-09 went up to Rs. 571.24 crore up 3.83% over the
net profit of Rs. 550.16 crore in 2007-08.
Loans offereRED BY
cbi
3. Cent buy
7. Cent jewel
8. Cent kalvani
Introduction
Central bank of India provides loan to poor and needy so that they can take
up basic education and to the student/ employed persons to pursue higher
education. Loan can be applied for studies in India and abroad for
graduation, post graduation, diploma / degree courses, etc.
Candidate's Eligibility
Candidates applying for the education loan need to satisfy
certain eligibility criteria as specified by the bank.
Objective
The scheme aims at providing financial assistance on reasonable
terms :
Eligibility
• Studies in India :
• School education including plus 2 stages.
• Graduation courses - B.A., B.Com., B.Sc. etc
• Post Graduation courses - Masters & Ph.D.
• Professional courses - Engineering, Medical, Agriculture,
Veterinary, Law,
• Dental, Management, Computer etc.
• Computer Certificate course of reputed institutions accredited
to
• Department of Electronics or Institutions affiliated to
University.
• Courses like ICWA, CA, CFA, etc.
• Courses conducted by IIM, IIT, IISc, XLRI, NIFT etc.
• Courses offered in India by reputed Foreign Universities.
• Evening courses of approved institutions.
• Other courses leading to Diploma/Degree etc. conducted by
Colleges/Universities approved by UGC/Govt./AICTE/ICMR
etc.
• Courses offered by National Institutes and other reputed
private institutions. Any other institution courses depending
on future prospects/recognition by user institutions deemed
proper by the Bank.
For graduation
Studies in India
Studies Abroad
Quantum of Finance
The maximum amount of loan offered is Rs.7.50 lacs and Rs.15 lacs
for studies in India and abroad respectively.
Margin
Security
Courses Approved
Highlights of loan
ICICI bank education loan covers the course fee, other supplementary
expenses set by the institute. Student must have the letter from the
Institute which has the details confirming his admission and course fee
along the other important documents. ICICI bank requires a
confirmation letter from ICICI Prudential life stating that the students
will get absorbed under the payroll of the company.
HSBC Bank
HSBC bank helps you to fulfill your dream to get good admission in
good college/ professional institute in India or abroad. Bank gives
education loan for studies in India and abroad. Bank has flexible
tenure, comprehensive coverage, low interest rate, etc. Bank also have
special discount for HSBC customers.
1. Interest rates
The first and the foremost is the interest rates charged on
the education loan. This interest rate is the primary factor
that earns money for banks and so they want it to be
higher, but the competition in the loan market makes the
bank keep it to a level where the education loan seems
affordable to the customer, while it earns money for the
banks too. Whether the interest rate charged on your
education loan is fixed or floating is also a matter of
concern. Generally, the value of fixed interest rates is higher
than the floating interest rates. Going for floating interest
rates in this low interest regime is always a better option.
Study India
-
Central Bank 50000.00 400000.00 10.50
of India
-
HSBC Bank 50000.00 2500000.00 12.00
-
ICICI Bank 50000.00 400000.00 13.75
Study Abroad
-
Central bank 50000.00 400000.00 10.50
of India
-
ICICI Bank 50000.00 400000.00 13.00
Educational Loans to students of Indian
Institute of Management (IIMs) under
Cent Vidyarthi Scheme on concessional
terms.
be taken as co-
borrowers (Optional).
CENT Vidyarthi
Cent Vidyarthi Scheme
Studies in India
Studies abroad
Coverage of expenses :
Quantum
Need based finance subject to repaying capacity of the
parents/students with margin and the following ceilings:
Margin :
Upto to Rs.4.00 lacs - No margin
Above Rs.4.00 lacs
Security :
Rate of Interest:
As per bank rules
Purpose of Loan
For pursuing higher studies, in India & Abroad
Eligibility
Student should be an Indian National having secured
admission to Professional / Technical courses through
entrance test / selection process.
Nature of Facility
Term Loan
Margin
Upto Rs. 4 lacs : NIL, Above Rs. 4 lacs:In India - 5%
,Abroad - 15% Margin (scholarship may be included in
margin.)
Incentive
1% interest concession, if interest is serviced during study
period when repayment holiday is specified for interest
repayment. It should be given at the end of Financial Year
i.e. 31st March.
Interest is calculated at simple basis during Repayment
Holiday / Moratorium Period. Interest will be compounded on
monthly rests from due date of first instalment.
Disbursement
Payment directly to college / hostel / mess / airlines etc. In
appropriate cases disbursement to be made to borrowers
subject to satisfactory evidence. Original receipts to be
submitted.
Repayement
Security
Upto Rs.4 Lakhs: Co-obligation of parents/ guardian/
parent-in-law/spouse
Conclusions
Loans play a very important role now a days . central bank of India provides
loans to poor and needy so that they can take up basic education and to the
student /employees person to pursue higher education loan can be applied
for studies in India and abroad for graduation, post graduation , diploma
/degree courses central bank of India provides education loans at different
rates to students studying in India and abroad .there are also various other
loan which central bank of India offers but my focus is on educational loan
of central bank of India .basically loans are of two types secured loans and
unsecured loans . secured loans are those where market value of security is
not less than amount of such loans .unsecured loans are those where there is
no security .loans can also be short term and long term loans but education
loans are long term loans because it is said that loan will be repaid when
student will start earning. Normally a bank keeps several securities in case
the borrower is unable to repay the loan, the bank can take away these
securities . in order to the banker a charge should be created on securities .
creating a charge means the security or the think against which the bank has
taken loan can not be sold.
Recommendation
Loans should be given at reasonable rates to students so that even poor
people can afford it and give education to their children. Government should
take more initiative so that every child in India is educated. The fast easy
student loan has thus increased the probability of more and more
students undertaking higher education. The Ministries of Education
also maintain a strict check on the approval process of these loans
which makes student loans easy to get.
BIBLIOGRAPHY
www.google.com
www.yahoo.com
www.centralbank.net.in