174 CHAPTER-X

EDUCATIONAL LOANS 10.1 INTRODUCTION: Our Educational Loan Schemes have been designed to help the students to acquire knowledge in the field of their interest, which ultimately help them to settle in the life. We believe that the better education a student receives, the better is his or her prospects in life. The lack of finance should not be a handicap to the aspirations of a diligent student. Increased role of Banks in facilitating pursuit of higher education by deserving students. The scheme of the Bank is based on the model prepared by IBA. The terms and conditions are made so much soft that no deserving student is denied an opportunity to pursue higher education for want of financial support. The scheme is in keeping with the priority for Education accorded by the Government. 10.2 10.2.1. ELIGIBILITY CRITERIA : COURSES ELIGIBLE (a) (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) (xi) (b) (i) (ii) (iii) STUDIES IN INDIA : School education including plus two stage. Graduation course : All Graduation courses Post Graduation Courses : Masters & Ph.D. Professional Courses : Engineering, Medical Agriculture, Veterinary, Law, Dental, Management, Computer, Ayurved, Homeopathy, Physiotherapy. Computer certificate courses of reputed institutes accredited to Dept. of Electronics or Institutes affiliated to university. Courses like ICWA, CA, CFA, CS. Courses conducted by IIM, IIT, IISc, XLRI, NIFT. Courses offered in India by reputed foreign Universities. Evening courses of institutes approved by State/Central Govt./ UGC/Universities. Other courses leading to diploma / degree etc. conducted by colleges / Universities approved by UGC / Govt. / AICTE /AIBMS / ICMR / ICAR Courses offered by National Institutes and other reputed private institution. STUDIES ABROAD : Graduation : For job oriented professional / technical courses offered by reputed universities. Post Graduation : MCA, MBA, MS. Courses conducted by CIMA, London, CPA in USA.

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CORRESPONDENCE COVERED. 10.2.2.

COURSES

ARE

NOT ELIGIBLE

TO

BE

STUDENT ELIGIBILITY Should be an Indian national. Secured admission to professional / technical courses entrance test / selection process. Secured admission to foreign university /institutions. No minimum qualifying marks. through

10.2.3.

TYPE OF BORROWERS Minors : granted to parents / guardians of minors Students who are majors : loans may be granted with their parents / guardians as joint borrowers. ( Documents must be executed by both).

10.2.4.

EXPENSES CONSIDERED FOR THE LOAN Fee payable to the college / school / hostel Examination / Library / Laboratory fee Purchase of books, equipments, instruments, uniforms. Caution deposit / building fund / refundable deposit supported by institution bills / receipts. Travel expenses / Passage money for studies abroad. Purchase of computers essential for completion of the course. Any other expense required to complete the course like study tour, project work, thesis, etc.. QUANTUM OF FINANCE Need based finance subject to the repayment capacity of the parents / students with margin upto the following ceilings : (i) Studies in India : Max. Rs. 7.50 lacs (ii) Studies abroad : Max, Rs.15.00 lacs.

10.2.5.

10.2.6.

MARGIN : Upto Rs. 4 lacs - Nil Above Rs. 4 lacs - 5 % for studies in India & 15 % for studies abroad. (i) Scholarship / assistantship to be included in the margin. (ii) Margin may be brought in on year to year to basis as and when disbursements are mae on a pro-rata basis.

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10.2.7.

SECURITY (i) (ii) Up to 4lacs - No security Above 4lacs- Collateral security equal to 100% of the loan amount or co-obligation of parent/ guardian/third party guarantee with the assignment of future income of the student for payment of instalments.(CO/BR/93/89 dt. 19.05.2001)

Note : The document should parent/guardian. be executed by the student and the

Security can 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 with suitable margin. Margin on securities to be considered as per extant guidelines. Where the land/ building is already mortgaged, the unencumbered portion can be taken as security on II charge basis provided it covers the required loan amount. In case the loan is given for purchase of computer the same to be hypothecated to the bank. Regarding assignment of future income of the student, branches are requested to obtain a stamped latter of undertaking as per Annexture -C. 10.2.8. RATE OF INTEREST i. ii. iii. iv. Upto Rs. 4 lacs - BOBTPLR i.e. 11.5 % p.a. Above Rs.4 lacs - BOBTPLR + 1% i.e.12.5% p.a. Simple interest to be charged at quarterly rest during the repayment holiday / moratorium period. Penal interest @ 2 % on overdue amount in the loan exceeding Rs. 2 lacs. NO PROCESSING / UPFRONT CHARGES SHOULD BE COLLECTED ON EDUCATIONAL LOANS

10.2.9. DISCRETIONARY LENDING POWERS : a) For public/staff related (other than officer in senior management and above) account:Sanctioning Authority Officer in JM G/S I Officer in MM G/S II Officer in MM G/S III Officer in SM G/S- IV to GS- VI Loan Amount Rs. 4.00 lacs. Rs. 8.00 lacs Rs. 12.00 lacs Rs. 15.00 lacs.

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b) For staff/ staff related ( Officer in senior management and above) accounts. Sanctioning Authority Regional Head Or Officer in SM G/S-V & G/S-VI Loan Amount Rs. 15.00

Extant guidelines on sanction of loans to officer in senior management and relatives of officer in senior management for reporting to MCB will continue. Loan applications to be considered by the branch nearest to the place of domicile of the borrower. No application for Educational Loan received can be rejected without the concurrence of the next higher authority. 10.2.10. DISBURSEMENT (i) The loan to be disbursed in stages as per the requirement / demand directly to the institutions / vendors of books / instruments, etc. to the extent possible. (ii) For the first year of study, at times institutions insist that the students pay the fees immediately on admission. As a special case, such payment, if made at the time of seeking admission, will be reimbursed to the students/parents against obtaining necessary proof of payment. It has to be ensured that no undue advantage is taken on this count. The expenditure incurred by the applicant for earlier years however shall not be considered for reimbursement. (iii) For overseas courses, after the students admission is confirmed by University, expenses relating to 1st semester/ year will be considered for reimbursement if the University demands so. (iv) In case the student loanee is not in a position to secure lodging or boarding facilities with the Educational Institutions, he/she may be allowed to make his/her own arrangement with the consent of the institution if required, at a reasonable cost, which may be directly paid to the concerned establishment after verifying bonafides of the same. (Source CO.BR.93/175 DT.10-10-2001) 10.2.11. REPAYMENT (i) Repayment Holiday / Moratorium : Course period + 1 year or 6 months after getting job, whichever is earlier. The loan is repayable in 5- years after the above period. 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 this control,

(ii)

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sanctioning authority may at his discretion consider such extensions as my be deemed necessary to complete the course. The accrued interest during the repayment holiday period to be added to the principal and repayment in EMI to be fixed. Concession for service of interest during Moratorium: The objective of the concession is to encourage borrowers to repay interest during study / moratorium period so that borrowers liability and banks exposure is restricted to the limit sanctioned. The concession/rebate of 1% in interest to be extended/provided to all the borrowers who repay interest debited to the account during the study period including moratorium period regularly in time. Interest debited in the account if serviced before next debit of interest in the account but not later than 30 days, will be treated as regular repayment of interest. The Rebate of 1% for the study period including moratorium period will be credited back to the borrowers loan a/c when the repayment starts, if the interest is serviced in time as defined hereinabove, The rate of interest to be charged during the repayment period i.e. from the date when the repayment starts till the date of final settlement, would be 1% less than what is stipulated in the sanction. Ref. BCC:BR:95/419 Dt 27.12.03 10.2.12. FOLLOW UP : Bank to contact college/university authorities to send the progress report at regular intervals in respect of students who have availed loans. CAPABILITY CERTIFICATE : Branches can also issue the capability certificate for students going abroad for higher studies. For this, 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). 10.2.14. OTHER CONDITIONS :

(iii)

(iv)

10.2.13

(i) (ii)

Branches are required to obtain a Stamped declaration/ an affidavit confirming that no loans are availed from other Bank. No dues certificate need not be insisted upon.

179 (iii)
Any deviation regarding eligibility, margin and security norms, etc.. may be allowed on merits of the case by an authority one step above the sanctioning authority.

10.2.15.

Additional guidelines for overseas studies i. Prior clearance of RBI is not necessary for release of foreign exchange ii. Authorized branch category A & B are permitted to release foreign exchange on submission of following documents iii. Letter of admission by foreign university iv. Form A2 duly filled in v. F 1 Visa duly attested vi. Copy of passport duly attested vii. Copy of sanction letter viii. Letter from branch requesting the authorized branch to release foreign exchange

10.2.16. Guidelines for staff related educational advances (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) It should be considered at par with public Mortgage of house is considered as security. Net value is taken after considering all liability to assess adequacy. Undertaking to earmark terminal benefits. Third party guarantee may be waived if terminal benefits exceeds the loan amount. On retirement the security norms as applicable to public be considered It should be processed where the staff is working & shall be transferred upon transfer of the staff Undertaking to recover the interest from the salary as & when applied Discretionary lending power to be exercised as per circular No. CO/BR/93/175 dated 10.10.2001

NOTE : Existing Education loan scheme is discontinued w.e.f. 11.12.2003. (Ref. CO:BR:95:411 dt. 11.12.2003 ) 10.3. With a view to giving further push up to Education Loan, it was directed by our Board that we should have 3- distinct products for each sub-segment of studies. Accordingly 3- new products have been developed under Education loan segment. The product name and target group is as under: S.No 1. 2. 3. Product Name BARODA VIDYA BARODA GYAN BARODA SCHOLAR Target Group Nursery to standard XII College and Higher Education in India Studies Abroad

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Therefore, all new requests for Education loan are to be considered under new products only. The Risk Management department has also introduced a revised Credit Rating Module for these products. The format of the revised Credit Rating Module is as per Annexure-D. Branches to note to make use of the new format. In order to encourage to lend more to the poor and needy students, it has been decided and advised by Reserve Bank of India vide their Circular RPCD. PLNFS No.BC.44/06.12.05/2003-04 dated November 4,2003 that Education Loans upto the ceiling of Rs.7.50 lacs for studies in India and Rs.15 lacs for studies abroad respectively will be reckoned under Priority Sector advances. Loans upto a limit of Rs.4/- lacs are to be sanctioned without insisting upon any security. The salient features of the schemes are as under :10.3.1. PARAMETER 1. Target group 2. Eligibility BAROD VIDYA- PRODUCT PROFILE PARTICULARS Parents of Students pursuing school education from Nursery to standard XII Should be an Indian national residing in India. Student should have secured admission to a Recognized school/ High school/ Jr. College (including CBSE/ICSE/State Board) for any of the following courses 1. Stage I : Nursery to V th STD. 2. Stage II : VI th to VIII th STD. 3. Stage III : IX th to XII the STD. 1. Evening courses of institutes approved by State/Central Govt. No minimum qualifying marks Loan to be granted in the name of father/mother of the student Fee payable to college /school Examination / Library / Laboratory fee. Fee and other charges payable to hostel Purchase of books /equipment's/ instruments/uniforms. Personal Computers/Laptops wherever required. Caution deposit/building fund/ refundable deposit. Supported by Institution bill/ receipts. Cost of external coaching/tution is not to be considered. Need based finance subject to repayment capacity of parents. Maximum Rs.4.00 Lac Loan is to be considered for the full duration of stage/course as mentioned herein above with yearly sub limits. (Yearly sub-limit means the maximum amount to be disbursed during the particular period to be calculated based on the proposed expenditure during the year.) Loan for stage II can be considered even though loan

3. Coverage expenses for

of

4. Quantum finance

of

181
sanctioned earlier for stage I is outstanding, or loan for Stage III can be considered even though loan sanctioned earlier for Stage II is outstanding subject to repaying capacity and provided the loan account for previous stage/s is/are conducted satisfactorily. Total amount of loan for all the stages sanctioned should not exceed Rs.4/- lac. NIL At TPLR with monthly rests (Fixed) Simple interest during repayment holiday/moratorium period Penal interest @ 2% on overdue amount if the loan amount exceeds Rs.2/- lacs. 1% Rebate in rate of interest is to be given if the interest debited during the repayment holiday is serviced. Loan for each yearly sub limit is repayable in 12 equal monthly installments. First installment to be due 12 months after first disbursement of each year's loan component. Interest to be serviced as and when applied during the moratorium period. Option to repay the loan after moratorium by way of EMI is also available. An illustration is given at the end of the product profile. Total deductions from the income including the proposed installment and interest should not exceed 60% of total income. The income of spouse, wherever spouse is working also to be considered. Suitable proof of income is to be obtained. NIL Branch which is in close proximity to the permanent residence of parent. The parents must be generally residing in the place for a minimum period of -3- years, except in the case of transferable job. No security In case the loan is given for purchase of computer the same is to be hypothecate to the Bank. Directly to School/Institution/hostel-term wise/year wise. Directly to book seller / shop for purchase of books, instruments, equipment's. Next year disbursement to be made only after student has passed the current year annual examination & progress report / mark list to that effect is produced by parents. In case student does not secure hostel facilities with educational institute, he may be allowed to make his own arrangement if required, fees of lodging / boarding in such cases to be paid directly to concerned establishment, after verifying bonafides of the same. For the first year of study, at times institutions insist that the students pay the fees immediately on admission. Such

5. Margin 6. Rate of Interest

7. Period

Repayment

8.Repayment Capacity

9. Processing & Documentation Charges 10. Financing Branch 11. Parents Residence 12. Security 13. Disbursement

182
payments may be reimbursed after obtaining necessary proof of payment. In genuine cases, expenses for purchase of books etc. may be reimbursed after obtaining necessary proof of purchases and payment. The details of expenses to be obtained from college / school/ institution. In case such details are not furnished by the school authorities, suitable declaration from parents be obtain and carefully examined/satisfied. Progress report to be obtained at regular intervals and kept on record. A stamped declaration/an affidavit confirming that no Educational loan is availed from other banks/ institutions for the child for whom loan is sanctioned by us and shall not avail educational loan from any other bank without obtaining NOC from our bank during the pendency of our educational loan, be obtained. No dues certificate need not be insisted upon. No exchange on Drafts issued in favour of school or student Priority Sector a) For Public / Staff related (Other than Officers in Senior Management & Above) accounts: * Branch Managers of all Grade/Scale are authorised to sanction loans upto Rs.4.00 Lacs under this scheme. b) For Staff/Staff related (Officers in Senior Management & above) accounts : Sanctioning authority : Regional Head Extant guidelines on sanction of loans to officers in Senior Management and relatives of Officers in Senior Management for reporting to MCB will continue. The rephasement of repayment in genuine cases be considered by the next higher authority.

14. Details Expenses

of

15. Progress Report 16. conditions Other

17. Freebies 18. Classification of Advance 19. Discretionary Lending powers

20. Rephasement ILLUSTRATION:

Mr. A wants to pursue the studies in IXth standard. He will be considered loan to meet the expenses of all the four years of the course i.e. from IX std. To XII std. I.e. stage three. The expected yearly expenses are say Rs.12500/-. Thus the total expenditure for the third stage i.e IX to XII will be around Rs.50000/-. Hence a loan of Rs.50000/- will be considered to Mr. A. The per year expenditure, being Rs.12500/-, the yearly disbursement will also be upto Rs.12500/- and over a period of 4 years only the entire loan of Rs.50000/would be disbursed. As per repayment schedule, there is a moratorium of 12 months from first disbursement of each years loan component, and after the expiry of 12 months moratorium period the loan will be repaid in 12 months. However, the interest debited in the loan account on monthly basis will have to be paid by the borrower. Presuming that the loan is sanctioned on 1.6.2001, the repayment will be as under:-

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Year June 01 to May 02 June 01 to may 02 July 01 to May 02 June 02 to May 03 June 02 to May 03 July,02 to May,03 July,02 to May,03 June,03 to May,04 July,03 to May,04 July,03 to May,04 June,03 to May,04 June,04 May,05 June 04 May 05 June,04 May,05 June,04 May,05 to to to to Particulars To disbursement on various dates for Ixth std. To Int. debited every month during the year By Interest deposited during the year To disbursement on various dates for X th std. By Monthly Recovery of Loan disbursed during July,01 to May 02 for Class IX To Int. debited every month during the year By Interest deposited during the year To disbursement on various dates for XI th STD. To Int. debited every month during the year By Interest deposited during the year By monthly Recovery of Loan disbursed during July,02 to May,03 for Class Xth std. To disbursement on various dates for XIIth std. To Int. debited every month during the year By Interest deposited during the year. By Monthly Recovery of Loan disbursed during July,03 to May,04 for class XIth Std. To Int. debited every month during the year By Interest deposited during the year. By Monthly Recovery of loan disbursed during the July,03 to May,04 for class XIth STD. Dr. 12500 1300 12500 1300 1300 12500 1300 1300 12500 12500 1300 1300 1300 12500 1300 12500 0 12500 Cr. 1300 Balance 12500 13800 12500 25000 12500 13800 12500 25000 26300 25000 12500 25000 26300 25000 12500 13800 12500 NIL

June,05 to May,06 June,05 to May,06 June,05 to May,06

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10.4. BARODA GYAN PARAMETERS 1. Name of the Product 2. Target Group: 3. Courses Eligible PARTICULARS BARODA GYAN Students pursuing Graduation, Post Graduation, Professional and Other courses in India. All Graduation courses All Post Graduation courses and Doctorate courses Professional Courses viz. Engineering, Medical, Agriculture, Veterinary, Law, Dental, Management, Computer, Ayurved, Homeopathy, Physiotherapy, Hotel Management, Hospital Management, Interior Designing, Architecture, Event Management, Mass Communication, Fashion Technology, etc. Computer certificate courses of reputed institutes accredited to Dept. of Electronics or institutes affiliated to University. Courses like C.A., ICWA, CFA, CS etc. Courses offered in India by reputed foreign Universities. Evening courses of Institutes approved by State/Central Govt/ UGC/AICTE/AIBMS/ICMR/ ICAR. Courses offered by National Institutes and other reputed private Institutions. The College/ Institute must have been approved by the State/ Central Govt/ UGC/AICTE/ etc. 4. Student Eligibility: 5. Coverage of Expenses Should be Resident Indian Secured admission to either of above courses No minimum qualifying marks Fee payable to college/ institution/ University. Examination/ Library/ Laboratory fee. Fee and other charges payable to hostel Purchase of books/ equipment / instruments/ uniforms. Personal Computers/ Laptops wherever required Caution deposit/ building fund/ refundable deposit supported by Institution bills/ receipts. Any other expenses required to complete the course like study tours, project works, thesis, etc.

6. Quantum of finance

7. Margin:

Cost of External Coaching/ tution is not to be considered. > Need based finance subject to repayment capacity of student, based on the expected income to be generated after completion of the course (as per general assessment, to be made by the Branch). Maximum Rs.7.50 Lacs. Upto Rs.4.00 Lacs : NIL Above Rs.4.00 Lacs: 5%

185

8. Rate of Interest: 9. Repayment Holiday/ Moratorium Period: 10. Repayment Period:

Scholarship/ assistantship if any received to be included in the margin. Margin may be brought in on year to year basis as and when disbursements are made on a pro rata basis. Upto Rs.4.00 Lacs - At TPLR (Fixed) with monthly rests Above Rs.4.00 Lacs : TPLR + 1% (Fixed) with monthly rests. Simple Interest to be charged at monthly rests during the repayment holiday/ moratorium period. The accrued interest during the repayment holiday period to be added to the Principal and repayment in Equated installments (EMI) be fixed. Penal interest @ 2% p.a. on overdue amount, if the loan amount exceeds Rs.2/- lacs. 1% interest concession be provided if interest debited during repayment holiday is serviced. Course period + 1 year, or 6 months after getting job, whichever is earlier. The Loan is repayable in 5 years after the above period. If the student is not able to complete the course within schedule time, extention of time for completion of course may be permitted by Branch Manager. Branch Manager can give extention of maximum 1 year on 2 occassions. If the period required is more than 2 years, the same can be authorised by the next higher authority/ one step above the sanctioning authority. In case of above extention, moratorium period will stand extended accordingly. The accrued interest during the repayment holiday period to be added to the principal and repayment in Equated Monthly Installment (EMI) be fixed.

11. Processing and Documentation Charges 12. Financing Branch: 13. Security: NIL

Branch which is in close proximity to the permanent residence of parent. Upto Rs.4.00 Lacs: No security Above Rs.4.00 Lacs: Collateral security equal to 100% of the loan amount or co-obligation of parents/ guardian/ third party along with the assignment of future income of the student for payment of installments. The document should be executed by both the student and parent/ guardian. The security can be in the form of land/building / Govt. Securities/ Public Sector Bonds/ Units of UTI, Insurance Policy, Gold, Shares/ NSC, KVP, Life

186
debentures, bank deposits, Relief Bonds etc. standing in the name of student/ parent/ guardian or any other third party with suitable margin. Margin on securities to be considered as per extant guidelines. Wherever the land/ building is already mortgaged, the unencumbered portion can be taken as security on 2nd charge basis provided it covers the required loan amount. In case loan is given for purchase of computer the same to be hypothecated to the Bank. Regarding assignment of future income of the student, branches are requested to obtain a stamped letter of undertaking as per annexure-C. Directly to School/ Institution/ Hostel - term wise / year wise, in stages as per the requirement/ demand. Directly to book seller/ shop for purchase of books, instruments, equipments. Next year disbursement to be made only after student has passed the current year annual examination and progress report/ mark list to that effect is produced. In case student does not secure hostel facilities with educational institute, he may be allowed to make his own arrangement if required. Fees of lodging / boarding in such cases to be paid directly to concerned establishment, after verifying bonafides of the same.

14. Disbursement

15. Reimbursement :

16. Details of Expenses 17. Progress Report 18. Other Conditions:

19. Freebies 20. Classification of Advance 21. Sanctioning Authority

For the first year of study, at times institutions insist that the students pay the fees immediately on admission. Such payments may be reimbursed after obtaining necessary proof of payment. In genuine cases, expenses for purchase of books etc. may be reimbursed after obtaining necessary proof of purchases and payment. ` The details of expenses for the entire course period to be obtained from college/ institution. Progress report to be obtained at regular intervals and be kept on record. A stamped declaration/ an affidavit confirming that no Educational Loan is availed from other bank/ institutions. No dues certificate need not be insisted upon. Drafts required in favour of the school or student will be issued free. Debit card to the student on his account. Priority Sector (a) For Public / Staff related (Other than officer in Senior Management and above) accounts:

187

Sanctioning authority: Br.Manager in JMG/S-I Br.Manager in MMG/S-II And above.

Loan Amount Rs.4.00 Lacs. Rs.7.50 Lacs.

For Staff/Staff related account (Officers in Senior Management and above): Loan Amount Sanctioning authority: Regional Head Rs.7.50 Lacs. OR Officers in SMG/S-V and G/S-VI Extant guidelines for sanction of loans to officers in Senior Management and relatives of Officers for reporting to MCB will continue. No application for educational loan received should be rejected without the concurrence of the next higher authority.

22. Deviation:

23. Additional Loan/ Enhancement in Limit:

Deviation in respect of eligibility norms, margin, security, etc. may be allowed by authority of one step above sanctioning authority on a case to case basis on merits. (a) Loan for higher studies in India under Baroda Gyan can be considered even though loan sanctioned earlier under Baroda Vidya is outstanding, subject to repaying capacity and provided the loan account for previous stage/s is/are conducted satisfactorily. (b) If the student wants to pursue further education, additional loan / enhancement in limit to continue further course may be considered within the overall maximum limit. The additional security, if required, as per enhancement in Limit should invariably be taken. E.g. Mr.'A' has availed educational loan for his studies for MBBS. After completion of MBBS, he seeks admission for MD/MS, he may be granted loan within overall ceiling limit of amount, if available. In this case, the holiday for repayment granted initially, will stand extended further as per the duration of the course.

24. Rephasement

The re-phasement of repayment in genuine cases be considered by the next higher authority.

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10.5. BARODA-SCHOLAR-AN EDUCATIONAL LOAN PRODUCT FOR STUDY ABROAD. PARAMETERS 1. Name of the Product 2. Target Group 3. Eligibility of Courses 4. Student Eligibility PARTICULARS BARODA SCHOLAR Students going abroad for Professional/ Technical studies. Graduate/ Post Graduate/ Doctorate/ Job oriented Professional/ Technical courses offered by reputed Universities overseas. Should be an Indian National Secured admission to professional/ technical courses at Foreign University/ Institutions. No minimum qualifying marks required. Admission/ Tution Fees to College/ University Hostel/ Mess charges Examination/ Library/ Laboratory fee. Purchase of books/ equipments/ instruments/ uniforms. Caution deposit/ building fund/ refundable deposit supported by Institution bills/ receipts. One way Travel expenses/ passage money. Purchase of computers if essential for completion of the course. Any other expenses required to complete the course e.g. study tour, project work, thesis. etC. Graduation and other courses up to 3 years duration: Rs.10 Lacs. Post Graduation and other Advances studies: Rs.15/Lacs. 15% TPLR + 1% at monthly rests. Simple interest to be charged during the repayment holiday/ moratorium period. Penal interest @ 2% p.a. on overdue amount if loan exceeds Rs.2 Lacs. 1% interest concession be provided if the interest debited during the repayment holiday is serviced. Repayment Holiday/ Moratorium Period: Course period + 1 year, or 6 months after getting job, whichever is earlier. Repayment Period: The loan is repayable in 5 years after the above period. 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.

5. Coverage Expenses

6. Quantum of Finance

7. Margin 8. Rate of Interest:

9. Repayment Period:

189
The accrued interest during the repayment holiday period to be added to the principal and repayment in Equated Monthly Instalments (EMI) be fixed. 10. Processing and Documentation Charges 11. Financing Branch 12. Security: NIL Branch which is in close proximity to the permanent residence of parent. Upto Rs.4.00 lacs : No security Above Rs.4.00 Lacs: Collateral security equal to 100% of the loan amount or co-obligation of parent/ guardian/ third party along with the assignment of future income of the student for payment of instalments. 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, relief bonds, etc. standing in the name of student/ parent/ guardian or any other third party with suitable margin. Margin on securities to be considered as per extant guidelines. Wherever the land/ building is already mortgaged, the unencumbered portion can be taken as security on 2nd 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. Regarding assignment of future income of the student, branches are requested to obtain a stamped letter of undertaking as per annexure- C. For Public/Staff related (Other than officer in Senior Management and above)Accounts: Sanctioning authority: Br.Manager in JMG/S-I Br.Manager in MMG/S-II Br.Manager in MMG/S-III Br.Manager in SMG/S-IV & above. Loan Amount Rs.4.00 Lacs. Rs.8.00 Lacs. Rs.12.00 Lacs. Rs.15.00 Lacs.

13. Sanction/ Disbursement:

For Staff/Staff related accounts (Officers in Senior Management and above): Sanctioning authority: Regional Head Or Loan Amount

190
Officers in SMG/S-V and G/S-VI Rs.15.00 Lacs.

Extant guidelines for sanction of loans to officers in Senior Management and relatives of Officers for reporting to MCB will continue. * 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. Progress report to be obtained at regular intervals and be kept on record. A stamped declaration/ an affidavit confirming that no Educational Loan is availed from other Bank/ Institutions for the student for whom loan is sanctioned by us and shall not avail educational loan from any other Bank without obtaining NOC from our Bank during the pendency of our educational loan, be obtained. No dues certiificate need not be insisted upon. Drafts in foreign currencies drawn on our branches/ subsidiaries required in favour of college/ University/ student will be issued free of exchange/ commission. If the student wants to pursue further education, additional loan/ enhancement in limit may be considered within the overall ceiling limit. In this case, the holiday for repayment granted initially, will stand extended further as per the duration of the course. Branches can also issue the capability certificate for students going abroad for higher studies. For this, financial and other supporting documents may be obtained from applicant, if required. (Some of the foreign universities require the student 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). A proforma of capability certificate is enclosed herewith. You may make necessary changes as required in it. The rephasement of repayment in genuine cases be considered by the next higher authority. Priority Sector.

14. Disbursement 15. Progress Report: 16. Other Conditions:

17. Freebies 18. Additional Loan/ Enhancement in Limit:

19. Certificate

Capability

20. Rephasement: 21. Classification Advance of

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10.6. Concession for service of interest during Moratorium: The objective of the concession is to encourage borrowers to repay interest during study / moratorium period so that borrowers liability and banks exposure is restricted to the limit sanctioned. The concession/rebate of 1% in interest to be extended/provided to all the borrowers who repay interest debited to the account during the study period including moratorium period regularly in time. Interest debited in the account if serviced before next debit of interest in the account but not later than 30 days, will be treated as regular repayment of interest. The Rebate of 1% for the study period including moratorium period will be credited back to the borrowers loan a/c when the repayment starts, if the interest is serviced in time as defined hereinabove, The rate of interest to be charged during the repayment period i.e. from the date when the repayment starts till the date of final settlement, would be 1% less than what is stipulated in the sanction. The above is further clarified hereunder by an example : i) Loan sanctioned on 01-01-2001. Study period 2- years, repayable in-5- years, repayment to start from 6- months after getting employment or one year after study period which ever is earlier. Rate of Interest 12.5% p.a. If the borrower gets employment on 01-04-2003, his 1st instalment will be due on 01-10-2003. Now if he has regularly paid interest from 01-01-2001 to 30-09-2003, the amount of interest concession @ 1% p.a. for the period 01-01-2001 to 3009-2008 will be credited to borrowers loan account on 01-102003. The interest rate will be reduced by 1% i.e. 12.5% - 1% = 11.5% p.s. for the repayment period i.e. from 01-10-2003 onwards.

ii)

iii)

Ref. BCC:BR:95/419 Dt 27.12.03 NOTE:a) Loan application for higher Education- Annexure - A b) Appraisal cum sanction memo- Annexure- B

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10.7.

EDUCATIONAL LOAN SCHEME FOR STUDENTS IN PRIVATE PROFESSIONAL COLLEGES, PRIORITY SECTOR (AMENDED SCHEME) INTRODUCTION: Reserve Bank of India has informed that they have evolved an Educational Loan Scheme for students in Private Professional College framed in compliance with the directions of the Honble Supreme Court vide its order dated 27.07.1999. The terms and conditions of the scheme are given as under :-

10.7.1

10.7.2

OBJECTIVE Provide financial assistance by way of loans to the meritorious and indigent students in order to encourage them to pursue the full time graduate/post-graduate professional courses in private professional colleges for developing the technical skills in the following disciplines. (i) Medical and Dental (all branches such as Allopathy. Ayurvedic. Homeopathy, Unani) (ii) Engineering (iii) Chemical Technology (iv)Management (v) Architecture including interior decoration (vi)Law (vii) Computer Science and Applications (The Scheme will be expanded to cover other professional courses, if any, if required)

10.7.3

AREA OF COVERAGE Throughout the country to be implemented by Public Sector Banks.

10.7.4

ELIGIBILITY CRITERIA (i) Student should have secured admission in private professional college against either free/merit seat or payment seat. Student will have to submit a certificate to this effect from the Principal/Competent Authority of the college concerned. The college should be affiliated to a university in the country and the course should be recognised by the concerned governing body such as Indian Medical Council etc. Student's annual family income (or that of his father or guardian) should not exceed Rs.1/- lakh from all sources. An affidavit to this effect will have to be furnished by the student and his father and in the absence of the father, by mother or other near relative. (Students who have secured admission

(ii)

193
against quota of seats meant for NRI/foreign students will not be eligible for assistance under the scheme.) 10.7.5 LOAN AMOUNT Rs. 15,000/- for free/merit seat student and Rs.50,000/- for payment seat students or the fees payable by the student whichever is less. Student will have to submit a certificate every year from the college authorities regarding fees payable by him. Loan amount will be remitted by the lending bank to the college concerned. Loan granted in each academic year may be treated as a separate loan account for determining rate of interest, security etc. (Bank's assistance should be available to the student for the entire duration of the course subject to the student continuing to fulfill the eligibility criteria and he being allowed to keep the terms according to the rules of the University concerned. The student will not be required to submit a fresh application for loan every year but will only submit to the Bank proof of his continuing to fulfill the eligibility criteria). 10.7.6 INTEREST The rate of interest will be as per Reserve Bank of India guidelines from time to time, especially for this scheme, the present interest rate we have structured is as under :i) Limit upto and inclusive of Rs.25,000/- 11.75% + Interest Tax ii) Over Rs.25.000/- and upto Rs.50,000/- 12.00% + Interest Tax 10.7.7 SECURITY The advances in this case will be on clean basis. However, a bond undertaking to repay the loan amount in the stipulated manner will have to be executed by the student (and in case the student is minor, by his father/mother or the guardian). 10.7.8 REPAYMENT Repayment will commence immediately after 2 years of completion of the course the student is studying in or six months after the student borrower has secured employment and starts earning whichever is earlier. Total period of repayment including the above period of two years or six months as the case may be, should not exceed 5 years from the date of completion of the course by student. 10.7.9 REVIEW AND REVISION The above scheme may be reviewed and revised from time to time by Reserve Bank of India.

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10.8. LOAN FOR TRAINING / SKILL UPGRADATION OF CONSTRUCTION WORKERS

Ref ; CO:BR:95/179 dt 27.05.2003 10.8.1. INTRODUCTION: The present educational loan scheme focus on formal system of education leading to recognized degrees/diplomas, etc. Employed persons also look forward to avenues for career advancement by pursuing job related skill/knowledge upgradation programmes, while continuing to work. The input requirements in this area could be industry specific. Construction industry plays an important role in infrastructure development. This segment contributes significantly to the employment generation and is vital for the economic growth of the country. IBA has thus formulated a scheme at the request of Construction Industry Development Council(CIDC), a body set up under the auspices of Planning Commission. The scheme aims at providing financial support on reasonable terms to skilled or semi-skilled workers employed by construction companies. The details of the scheme are as under:10.8.2. Objective: To facilitate skill upgradation and career progression for skilled/semiskilled workers employed by construction companies and engaged at a worksite for taking up courses offered on part-time basis so that workers would be able to attend the programme while continuing to work. 10.8.3. Eligible courses: Pre diploma courses offered by institutes and universities,which are of short duration, upto a maximum 6 months and are approved by construction industries development council (CIDC) / IGNOU. 10.8.4. Eligibility: (i) (ii) Should be an Indian National. Semi skilled or skilled worker employed with construction companies. (iii) Employees must be covered under Employees Provident Fund (EPF). (iv) Eligible worker would normally be those holding trade certificates issued by Industrial Training Institutes( ITI). (v) Those who have availed loan and completed one short-duration course would be eligible to apply for loan for taking up another pre-diploma course after repaying the loan availed earlier.

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(vi) Minimum age of the worker should be 18 years. Maximum age, if any, prescribed by the course provider (may not exceed 45/50 years.)

10.8.5.

Quantum of LoanMaximum Rs 15000/-

10.8.6.

Type of facility: Demand Loan.

10.8.7.

Period: 12 months

10.8.8.

Course Expenses to be covered by bank finance :It is estimated that the course fees would be Rs.2000/- per month on an average. Duration of courses would be 6 months at the most. Examination/Certification fee would be about Rs.1000/- per course. Maximum cost for attending a course is estimated at Rs.15000/(inclusive of all other expenses).

10.8.9.

Margin: Nil

10.8.10.

Interest: At BOBTPLR of the Bank i.e. 11.50%

10.8.11.

Security: (i) (ii) Loan to be secured by way of Joint Demand Promissory note to be executed jointly by the borrower(s) and employer Alternately, banks may obtain separate guarantee document from the employer.

10.8.12.

Disbursement: To the extent possible, payment would be made direct to the institutes offering the courses.

10.8.13.

Repayment: (i) Loan with interest to be repaid maximum in 24 months from date of disbursement. First installment to fall due one month after disbursement. The employer to give an irrevocable Undertaking to deduct instalments from monthly salary/ wages payable to the employee and remitting it to the Bank.

(ii)

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10.8.14. 10.8.15.

Processing / documentation charges: Nil Other Conditions (i) (ii) Loan applications are to be disposed of within a period of 15 to 21 days. Branches are required to obtain a stamped declaration/an affidavit confirming that no loans are availed from other banks.

10.8.16. Classification Under priority sector : Loans under the scheme will be considered as priority sector advances under Educational Loan segment.

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Annexure -A BANK OF BARODA APPLICATION FOR FINANCIAL ASSISTANCE FOR HIGHER EDUCATION

Manager Bank of Baroda ____________Branch __________________ __________________

Dear Sir,

No.

Photograph of the Student

Area Date:

I/We hereby apply for a total financial assistance of Rs._______________ (Rupees _________________ ______________________________) from the Bank for Higher education calculated as under repayable in _______________ instalments beginning _______________ Months after disbursement.
Requir ement for 1st Year 2nd Year 3rd Year 4th Year
PURPOSE Total expenses Less any scholarshi p own source etc. Total Loan required

Monthly

Tuition Fees

Exam. Fees

Cost of Books

Lodging Boarding

Expenses eg. Lab. fees equip etc.

A. i. ii. iii. iv. v. B.

PARTICULARS OF THE STUDENT : Name_______________________________________________________________ Age & Date of birth_______________________________________________ Caste/Religion________________________________________________________ Marital Status :______________No. of Children if any________________________ Address_____________________________________________________________ FATHERs / HUSBANDs / GUARDIANs PARTICULARS:

vi. Name_________________________________________________________________

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vii. viii. ix. xi. xii. If guardian state relationship____________________________________________ Age______________________________________________________________ Address : ________________________________________________ If in service the age of retirement : ________________________________ No. of dependents : __________________________________________ If yes, give details ____________________________________________ C. EDUCATIONAL DETAILS : (S.S.C. & UPWARDS) Institution University which passed (2) / from Year of Passing (3) Attempt s made (4) Percentage of marks obtained (5) Class obtained (6)

x.Occupation & Monthly income_______________________________

xiii. Is there any other earning member in the family?

Examination (1)

Please enclose mark lists of the examination cleared ( as also testimonials from two professors / teachers from the college / school last attended). D. PARTICULARS OF SCHOLARSHIPS/PRIZES WON FOR ACADEMIC DISTINCTION :
Examination (1) Specify the academic distinction for which the scholarship prize was awarded (2) Name of the scholarship Prize (3) Amount of scholarship prize (4) Duration of Scholarship (5)

E. a. b. c. d.

PARTICULARS OF THE COURSE FOR WHICH THE LOAN IS REQUIRED Name of the Course_________________________________________________ University/Institution _________________________________________________ Duration of the course ________________________________________________ Part-time/Full-time___________________________________________

In case of studies abroad state the details of R.B.I. approval, amount required for passage fare and other details on a separate sheet with copies of supporting document.

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F. ANY OTHER INFORMATION : e.g. Hobbies, extra curricular activities and distinctions awards received. G. SOURCE OF FINANCE : Source 1. 2. 3. 4. 5. H. REPAYMENT a. Repayment will Commence __________ months after completion of the course b. Expected monthly income Expenses Balance No of Instalments principal.) DECLARATION BY THE STUDENT APPLICANT : 1. The particulars furnished above are to the best of my / our knowledge true and correct. 2. The advance, if granted, will be utilized for the purpose for which it is granted. 3. I/We undertake to maintain a Savings Bank Account and/or Deposit Account with your Bank exclusively. 4. I/We will not borrow from any other Bank or any other source during the currency of the advance without your prior consent in writing. 5. I/We shall keep the Bank informed of my activities/income/Scholarships etc. during the tenure of the loan. : : : : Rs. Rs. Rs. :Rs. Amount per year For a period of TOTAL

Amount available for repayment

c. Payment of interest (Whether every month after availment or along with the

Date :______________

Your faithfully

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APPLICANT/S BANK OF BARODA (HEAD OFFICE : MANDVI, BARODA) BRANCH _________________ APPRAISAL NOTE CUM SANCTION MEMO- EDUCATIONAL LOAN Name of the Borrower : Name of the Student Present Address : Date of Birth Saving Bank a/c No. Permanent Address Loan Account No. Date of First Disbursement : Name and Address of the Institution Brief Academic History : Proposed Course (with affiliation & recognition) Duration of the Course __________________________Year/Semester. Semester 1 Admission Entrance 2 Tuition Fees 3 Examination Fees 4 Cost of Books 5 Date of Last Disbursement ANNEXURE-B

Lodging Boarding 6

Other Educational Expenses 7

Total Expenses 2 to 7 8

Less any scholarship 9

Net Requirement 8 - 9 10

Total

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Loan a/c Total Expenses

Academic

Expenses for Travel-in case of study abroad

Other Exp.(specify)

Total Expenses

Proposed plans after the course

Insurance details

Father/ Guardian Name

Age Date of Birth

Address

S.B. A/c No. Occupation

Monthly Income Total of Assets Income from other sources

Total of Liability

Net worth

PAN No. / GIR No. GUARANTORS (IF OFFERED) Name Address Guarantor 1

Insurance Details Guarantor 2

Occupation Monthly Income Total of Assets Income from other sources Total of Liabilities Net Worth Insurance Details PAN No./GIR No.

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Whether the borrower is eligible under DRI scheme Yes Any other Information : Loan a/c Loan recommended for sanction on the following terms Amount Initial holidays Term month No.of Instalment s Instalment Amount Rate of interest Margin / No

Options for repayment of interest : Security Documents : D.P.Note : Letter of instalment with acceleration clause Letter of undertaking in respect of legal heir : Collateral Security : Personal Guarantee of : Other Security :

Other terms & conditions of sanction (if any) :

RECOMMENDATIONS :

COMMENTS OF SANCTIONING AUTHORITY

Sanction No.: Date :

Sr. Branch Manager/Chief/Regional Manager

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BANK OF BARODA ANNEXURE- C (Head Office : Mandvi : Baorda) For loan exceeding Rs. 4 lacs only Stamp Place Date The Br. Manager Bank of Baroda _________________ ________________ Dear Sir / Madam Re. : Educational Loan A/c _______________________ In consideration of Bank of Baroda _________________ branch, having sanctioned and granted to Mr/ Miss./ Mrs. ___________________________ Aged _____________________________________________years presently residing at ________________________________________________________ a loan of Rs. _________________(Rupees purpose, we the following _________________________________________ together with the said Mr/ Miss/ Mrs. ___________________________________________________ only) for educational __________________________________ hereby agree/ undertake/ assure and assign as parents/ guardians/ relative/ others (as the case may be) all and singular of my/ our right title and interest in all and every sum/ income/ monies or claims for the aggregate value of Rs.__________(Rupees ________________________________________________________only) together with interest as computed and charged on the said amount by the Bank from time to time that may be received/ earned or accrued to/ or for the benefit of the said Mr/ Miss/Mrs. __________________________________ in future for recovery by the Bank in satisfaction of dues of the Bank payable by the said Mr/ Miss/ Mrs. ________________ by way of salary, professional income, business income, scholarship, grant, future rent, book debt or any other income so however that this assignment shall be treated and construed as a first charge on such income, monies, receipts of claims as may be earned/ received or granted to the said Mr/ Miss/ Mrs. ______________________.

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We also undertake/ assure and agree to inform the Bank of such earning or accrual as may be due to the said Mr/ Miss/ Mrs. __________________________________ in future together with the name and address of the Employer, Guarantor or Debtor of the said Mr/ Miss/ Mrs __________________________________ as also the address with all details of the said Mr/ Miss/ Mrs. __________________________________in future. Yours faithfully, _________________ _________________ _________________ _________________ _________________ _________________ (Relative or Friend) (Guardian)

(Borrower) (Parents)

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Annexure D LIST OF PARAMETERS TO BE CONSIDERED FOR EDUCATION LOANS STUDENTS PARTICULARS A. Age B. Educational Qualifications proposed to be acquired out of Bank Loan C. Type of Course (Whether Regular/Part-Time/Correspondence/Distance Education) GUARDIANS PARTICULARS PERSONAL DETAILS :i Age ii Mobility of Individual Location/Place of Stay iii No. of dependents (excluding spouse) EMPLOYMENT DETAILS :i Employment status ii Gross Monthly Income iii No. of years in Current employment/Business iv Designation FINANCIAL DETAILS :i Percentage of financing by Individual ii Bank Deposits and Other Liquid securities provided as a cover for loan iii Mortgage of Land & Building as security iv Liabilities : Bank Loans & other Loans OTHER DETAILS :i Presence of any other earning member in the family Ii Presence of Guarantor iii Life Style ( Colour T.V., Refrigerator, Two Wheeler, Cellular Phone,Telephone, Computer, Washing Machine, Car.) iv Applicant is a BOB Account holder

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RATING MODEL STUDENTS PARTICULARS (A) Age: Years Maximum Score Marks Allotted UP to 15 1 Over 15 Up to 22 4 Over 22 Up to 25 3 Over 25 - Up to 28 2 Over 28 0 Educational Qualification proposed to be acquired of Bank Loan: a) Doctorate & other Professional Qualifications 4 including Engineering, MBBS, Pharmacy, CA, ICWA, CFA, MBA, Law etc. b) Graduation / Post Graduation 2 c) Higher Secondary 1 Type of Course (a) Regular 4 (b) Part Time 2 Correspondence / Distance 0

(B)

(C)

PARENTS / GUARDIANS PARTICULARS (A) i) PERSONAL DETAILS 35-45 4 46-50 3 51-56 2 Below 35 and above 56 0 Mobility of Individual Location/ Place of Stay (at place of working):Age :Has not changed residence in last 10 years OR changed residence from rented to own accommodation b) Has not changed residence in last 5years c) Has not changed residence in last 3years d) Has not changed residence in last 1years e) Has changed residence in last 1- year No. of Dependents (excluding Spouse:) One Two => Three 4 3 0 a) 4 3 2 1 0

ii)

iii)

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(B) i)

EMPLOYMENT DETAILS EMPLOYMENT STATUS :a) Salaried in Govt. / Public Sector 4 b) Salaried in MNC / Renowned 3 Organization c) Professional & self-employed 3 d) Others 1 Gross Monthly Income (GMI) :a) Above 20000 4 b) 15000 19999 3 c) 10000 14999 2 d) 5000 - 9999 1 e) Below 5000 0 NO. OF YEARS IN CURRENT EMPLOYMENT / BUSINESS :a) Above 5 years b) 3-5- years c) 1 less than 3 years d) Less than 1 year Designation :a) Executive b) Managerial/Self Employed c) Junior / Clerical d) Others FINANCIAL DETAILS % OF FINANCING BY INDIVIDUAL More than 60% 4 40-60% 3 Above stipulated margin to less 2 than 40% Stipulated Margin 0 BANK DEPOSIT AND OTHER LIQUID SECURITIES PROVIDED AS A COVER FOR LOAN AS PERCENTAGE OF LOAN AMOUNT > = 100 4 60 Less than 100 3 25 Less than 60 2 < 25 1 No security 0 MORTGAGE OF LAND & BUILDING AS SECURITY AS A PERCENTGE OF LOAN AMOUNT> = 100 4 75-Less than 100 3 50- Less than 75 2 < 50 0 LIABILITIES BANK LOANS & OTHER LOANS No 2 YES 0 4 3 2 0 4 3 2 0

ii)

iii)

iv)

(C) i)

ii)

iii)

iv)

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OTHER DETAILS (i) PRESENCE OF ANY OTHER EARNING MEMBER IN THE FAMILY If any other member earning 4 NO other member earning besides parent/guardian PRESENCE OF GUARANTOR YES No LIFE STYLE 8 Parameters (Colour Tv, refrigerator, Two Wheeler, telephone, Cellular Phone, Computer, washing machine, Car.) each carrying 0.5 score APPLICANT IS A BOB ACCOUNT HOLDER YES NO SCORE A B C D 56-70 41-55 26-40 0-25 0

(ii)

4 0 4

(iii)

(iv)

4 0

RATING