RBI Asks Commercial Banks to adopt Education Loan Scheme

MUMBAI (India CSR): The Reserve Bank of India (RBI) has advised all Scheduled Commercial Banks to adopt the Education Loan Scheme, formulated by the Indian Banks’ Association (IBA), vide Circular RPCD.PLNFS. BC. NO.83/06.12.05/2000-01 dated April 28, 2001.

Govt informed that IBA has formulated and circulated to all Member Banks including the State Bank of India (SBI) a ‘Model Education Loan Scheme’ for providing financial support to meritorious students for pursuing higher education in India and abroad.

Salient features of the Scheme inter-alia include:

Loan up to Rs 10 lakh for study in India and up to Rs 20 lakh for study abroad.
Collateral-free loans up to Rs 7.5 Lakh under the Credit Guarantee Fund Scheme for Education Loans (CGFSEL).
No Margin for loans up to Rs 7.50Lakh.
Repayment period of 15 years
One One-year moratorium for repayment after completion of studies in all cases,
Moratorium taking into account spells of unemployment/under-employment say two or three times during the life cycle of the loan
The moratorium for the incubation period if the student wants to take up a start-up venture after graduation.