The Reserve Bank of India (RBI) has advised all Scheduled Commercial Banks to adopt Education Loan Scheme, formulated by 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 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 upto Rs 10 lakh for study in India and upto Rs 20 lakh for studyabroad.
- Collateral free loans upto Rs 7.5 Lakh under the Credit Guarantee Fund Scheme for Education Loans (CGFSEL).
- No Margin for loan up to Rs 7.50Lakh.
- Repayment period of 15years
- One Year Moratorium for repayment after completion of studies in allcases,
- Moratorium taking into account spells of unemployment/under-employment, say two or three times during the life cycle of theloan
- Moratorium for the incubation period if the student wants to take up a start-up venture aftergraduation.