Vidhya Lakshmi Loan

Purpose:

To meet expenses connected with the pursuit of specific courses of study at recognized institutions, including professional/job-oriented courses, which offer reasonable opportunity for employment & loan repayment capacity on successful completion.

ELIGIBILITY

Student eligibility

·      Should be an Indian National.

·      Should have secured admission to professional/technical courses in India or abroad through entrance test/merit based selection process.

Courses eligible

Studies in India

• Graduation courses: BA, B.Com. B.Sc., etc.
  
• Post Graduation courses: Masters & Ph.D.
  
• Professional courses: Engineering, Medical, Agriculture, Veterinary, Law, Dental, Management, Computer, etc.
  
• Computer certificate courses of reputed institutes accredited to Dept. of Electronics or institutes affiliated to university.
  
• Courses like ICWA, CA, CFA, etc.
  
• Courses conducted by IIM, IIT, IISC, XLRI, NIFT, etc.
  
• Regular Degree/Diploma courses like aeronautical, pilot training, shipping, etc., approved by Director General of Civil Aviation/Shipping, if the course is pursued in India.  In case the course is pursued abroad, the Institute should be recognized by the competent local aviation/ shipping authority.
  
• Courses offered in India by reputed foreign universities.
  
• Evening courses of approved institutes.
  
• Other courses leading to diploma/degree etc. conducted by colleges/universities approved by UGC/Govt./AICTE/AIBM/ICMR, etc.
  
• Courses offered by National Institutes and other reputed private institutions.
  
• Teacher Training Course/Nursing Course/B. Ed., provided the training institutions concerned are approved either by the Central Govt. or by State Govt. and such courses should lead to Degree or Diploma Course and not to Certification Course.  The fees to be considered for the purpose should be the fees structure as stipulated in Central/State Government Colleges.
  
• In respect of courses which are not covered under the criteria mentioned above, Bank will take a view on the eligibility taking into account the future prospects/ recognition by user institutions.
  
• Bank will also have the system of appraising other institutional courses depending on future prospects/recognition by user institutions.

Studies abroad

• Graduation: For job oriented professional/technical courses offered by reputed universities.
  
• Post graduation: MCA, MBA, MS, etc.
  
• Courses conducted by CIMA-London, CPA in USA, etc.

Expenses eligible for finance

• Fee payable to college/school/hostel.

• Examination/library/laboratory fee.

• Purchase of books/equipment/ instruments /uniforms.

• Caution deposit/building fund/ refundable deposit supported by Institution’s bills/receipts, subject to the condition that the amount does not exceed 10% of the total tuition fees for the entire course.

• Travel expenses/passage money for studies abroad.
  
• Purchase of computers essential for completion of the course.
  
• Insurance premium for student borrower.
  
• Any other expenses including hostel deposit/rent/monthly mess bills and other expenses required for completing the course such as study tours, project work, thesis, etc.

LOAN AMOUNT

Need based finance subject to repaying capacity of the parents/student with margin and the following ceilings:

·         For studies in India: Maximum up to Rs.10.00 lacs.

·         For studies abroad: Maximum up to Rs.20.00 lacs.

Within the above maximum levels, the loan amount is to be fixed taking into account the minimum stipulated margin, the expenses eligible for finance, actual requirement of the student, anticipated repayment capacity of the student on completion of the course, capacity of the parents, etc.  In the normal course, while appraising the loan, the future income prospects of the student will be looked into.  However, where required, the means of parent/ guardian could also be taken into account to evaluate repayment capability.

MARGIN 

For loans up to Rs.4.00 lacs: Nil

For loans above Rs.4.00 lacs:

Studies in India: Minimum of 5%.

Studies Abroad: Minimum of 15%.

Scholarship/assistantship to be included in the margin.

Margin may be brought in on year-to-year basis as and when disbursements are made on pro-rata basis.

(In the case of highly meritorious/ deserving students, relaxation in the margin may be allowed up to the minimum level of 3% & 8% for studies in India & abroad respectively from the normal stipulation of 5% & 15% in cases of loans above Rs.4.00 lacs at the level of General Manager.)

GUARANTEE

The loan documents are to be executed by both the student and the parent/guardian/grandparent/spouse as co-borrowers.

However, where collateral securities of third parties are obtained, the guarantee of the owners of the security is to be obtained.

LOAN PERIOD, REPAYMENT OF PRINCIPAL & INTEREST

Holiday Period: 

Course period* + 1 year or 6 months after employment, whichever is earlier.

(*The courses for which loans may be extended should not exceed 5 years.)

Repayment Period:

The principal & interest (including interest accrued during the holiday period) to be repaid in EMIs in a maximum period of 7 years (84 EMIs).

Note:

If the student is not able to complete the course within the scheduled time, extension of time for completion of the course may be permitted for a maximum period of 2 years by an authority at least one level above the sanctioning authority.

Interest will accrue on simple interest basis during the Holiday Period and such accrued interest of the Holiday Period will be added to the principal amount at the beginning of the Repayment Period for calculation of the repayment in EMIs.

Where a Holiday Period is allowed, interest concession of 1% to be allowed on the interest payable during the Holiday Period if interest is serviced during the Holiday Period. Alternatively, if the student undertakes to repay the loan without any Holiday Period, the same may be accepted and repayment may be fixed accordingly.  This fact has to be clearly stated in the loan application/appraisal.

DOCUMENTATION

1.             Application form & appraisal form as prescribed in our circular instructions.

2.             Certified copy of admission letter issued by the college/university/ institute.

3.             Certified copies of relevant past academic records, including mark sheets, examination/degree/ diploma certificates, etc.

4.             Copies of prospectus, syllabus and full details of course of study along with details of tuition fee & other fees payable.

5.             Testimonials from two professors/ teachers of the college/school last studied.

6.             Copy of IT/WT assessment orders of the parent/grandparent/ guardian, if an assessee.  If the student himself is an assessee, then copies of the latest IT/WT assessment order pertaining to his income/wealth.

7.             Form 111 of the parent/guardian / grandparent/student.

8.             Legal opinion and valuation report on the property offered as collateral security.

9.             In the case of students going abroad, besides the above, copies of the Passport, Visa, details of scholarships/assistance if any and the necessary evidence of admission to the institution abroad, etc. to be obtained and verified with the originals. 

10.          Standard forms:

a.     F. No: 600 (A)- Demand Promissory Note

b.    F.No.83 (R) - Letter of undertaking for repayment of instalment.

c.     F. No. 451-Letter of authority.

d.    F. No. 353- Educational term loan agreement (Stamped form)

e.     F.No.200 (R) - Letter of Guarantee (Stamped form).

f.     F.71 – Memorandum of deposit of title deeds.

OTHER CONDITIONS

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 student borrower may consider taking whole-life insurance policy to cover their liability under the loan and assign the same in favour of the Bank. 

5. The student borrower should be required to submit progress reports issued by the institution at regular intervals of time.

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 dues 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 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.

9. No application for education loan received should be rejected without the concurrence of the next higher authority.

10. 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.

SANCTIONING AUTHORITY

Branch Managers in Scale-II    : Rs.  4.00 lacs

Branch Managers in Scale–III  : Rs.  7.50 lacs

Chief Managers                        : Rs.15.00 lacs

AGMs & above                          : Rs.20.00 lacs