|1. Vidya Lakshmi Loans are to be sanctioned subject to the following general conditions:
a) The student should not change the course of study for which the loan has been extended or the educational institution without the Bank’s prior permission.
b) Any change in the permanent residential address of the borrower/ parent/guardian/guarantor should be duly informed to the Bank.
c) Details of employment secured by the student after completion of the course of study should be informed to the Bank.
d) The student should comply with all the rules & regulations of the educational institution and should not participate in any unlawful activity, which would debar him from pursuing the course of study.
2. Disbursement of the loan should be by way of direct payment to the institution or the suppliers of the goods and services with whom the eligible expenses are incurred against proper bills/ receipts, etc.
Disbursement by way of reimbursement of expenses already incurred may also be considered by the sanctioning authority in genuine cases provided:
a) the expenditure should have been incurred within the past 6 months,
b) the sanctioning authority should verify the original receipt and satisfy himself as to the actual payment, and
c) the total disbursement by way of reimbursement should not exceed 25% of the loan amount.
3. If the requirement for the eligible expenditure is on a year-to-year basis, the loan should also be disbursed on a year-to-year basis, subject to the stipulated margin requirement, on pro-rata basis.
4. The Bank may with the consent of the student borrower arrange for whole-life insurance policy to cover their liability under the loan and assign the same in favour of the Bank.
5. Banks to contact college/university authorities to obtain progress report on the student at regular intervals in respect of those who have availed loans.
6. The sanctioning authority may also issue capability/solvency certificates to the students going abroad after obtaining the required financial and other supporting documents from the borrower and taking into account the availability of funds from the sanctioned loan.
7. No due certificate need not be insisted upon as a pre-condition for considering Vidya Lakshmi Loans. However, a declaration/affidavit confirming that no loans are availed from other banks may be obtained.
8. Loan applications will be received either directly at bank branches or through on-line mode.
9. Upon receipt of the application, standard acknowledgement giving a reference number will be issued.
10. The acknowledgement will contain contact details of the bank official who could be contacted in case of delay in disposal of the application.
11. Loan applications for Vidya Lakshmi Loan scheme are to be disposed within a period of one month, but not exceeding the time norms stipulated for disposing loan applications under priority sector lending.
12. No application for education loan received should be rejected without the concurrence of the next higher authority.
13. Application for education loans received at branches should be disposed of within the time frame on objective basis and without delay.
14. Application for education loans should not be rejected without proper reason.
15. Bank may consider top up loans to students pursuing further studies within the overall eligibility limit, with appropriate re-schedulement, subject to obtaining the required security.
16. Education loans are eligible for special asset classification benefits upon restructuring, subject to fulfillment of necessary conditions set out in the RBI circular on restructuring.
17. The terms “meritorious” and “deserving” are not specifically defined in the model education loan scheme of IBA. It has to be interpreted on a case-to-case basis. Both the terms go hand in hand and are interdependent rather than independent.
18. While considering the loan application for education loans, the terms have to be interpreted not only on the basis of the meritorious academic performance of the applicant but a host of other factors like the social status, the economic background, the criteria on which admission has been accorded to the student by the respective college/ University, the geographical location, the broad objective of the scheme, etc.
19. If the student has obtained admission to an eligible course through a merit based selection process, he/she should be considered a meritorious student.
20. Similarly, admission to professional and technical courses is through common entrance tests and those who get admission through this process could be considered meritorious.
21. Where the admission is purely based on the marks scored in qualifying examinations, the banks are permitted to fix cut-off marks (percentage) for loan eligibility. Accordingly, it is proposed to fix the cut-off marks in our Bank as 90% for general category of boy students and 85% in case of girl students. In respect of SC/ST/OBC, etc. the percentage of marks may be at the level of 80%.
22. Since education loan is given for an individual and the limit of Rs.4.00 lacs is also for an individual i.e. education loan is not a loan for a family as a unit, any number of applications belonging to the same family may be sanctioned up to Rs.4.00 lacs individually without insisting for any security.
23. Service area norms are not applicable to education loans. As such, education loans may be sanctioned preferably by the branch nearest to the place of residence of parents of the student borrower.
24. No prepayment penalty is to be levied for prepayment of the loan any time during the repayment period.
25. In case of studies abroad, banks may obtain the SSN/Unique Identification Number (UIN)/Identity Card and note the same in the bank’s records.
26. The UID number issued by UIDIA may also be captured in bank’s system as and when available.