priya. nikita

PROJECT REPORTON

COMPARIVE STDUY OF EDUCATION LOAN, STATE BANK OF INDIA V/S PANJAB NATIONAL BANKBACHELOR OF COMMERCE

BANKING INSURANCESEMESTER VI (2013-2014)

SUBMITTED BY,

PRIYANKA RAMESH JAMBHALE

BI11-524

CERTIFICATE

This is to certify that Ms. PRIYANKA R. JAMBHAL

Roll No.524 of B.Com. Banking and Insurance Semester V (2013-2014) has successfully completed the project on COMPARITIVE STDUY OF EDUCATION LOAN STATE BANK OF INDIA V/S PUNJAB NATIONAL BANK under the guidance of Prof. VAIDEHI DAPTRDAR.

DateCOURSE COORDINATOR PRINCIPAL (Prof. _________) (Dr. Vaidehi Dapterdar) INTERNAL EXAMINER EXTERNALEXAMINER

(Prof.__________) (Prof .) DECLARATIONI PRIYANKA RAMESH JAMBHALE, the student of B.Com. Banking & Insurance Semester V (2013-2014) hereby declare that I have completed the project on Comparative STUDY OF EDUCATION LOAN STATE BANK OF INDIA V/S PUNJAB NATIONAL BANK.The information submitted is true and original to the best of my knowledge.

SIGNATURE OF STUDENT

(MS PRIYANKA RAMESH JAMBHALE)

ACKNOWLEDGEMENTI would like to THANK PROF Mrs. VAIDEHI DAPTRDAR. our coordinator who has helped me to know the concept ofCOMPARITIVE STUDY OF EDUCATION LOAN, STATE BANK OF INDIA V/S PUNJAB NATIONAL BANK.I am extremely thankful and would like to express deep GRATITUDE TO my project guide PROF. MISS. VAIDEHI DAPTRDAR. WHO has helped me to study the vast ocean ofCOMPARITIVE STUDY OF EDUCATION LOAN, STATE BANK OF INDIA V/S PUNJAB NATIONAL BANK. & helped me to over come all the difficulties that came in the course of completion of the project.

I would also like to thank my friends, my family and all the seen and unseen hands that have helped me to complete the project.

Comparative study of education loan

V/S

INTRODUCTION

The IBA Model Educational Loan Scheme for pursuing higher studies in India & Abroad was formulated initially in the year 2001 and modified subsequently from time to time with the objective of facilitating pursuit of higher studies by meritorious students. The focus was mainly on technical and professional courses in recognised Colleges and Universities. The vocational courses offered by ITIs, ITCs, Polytechnics and other technical institutions / bodies were not covered in the Model Educational Loan Scheme (some banks do provide loans for pursuing 3 year diploma courses offered by Polytechnic Institutes). However, in view of the initiatives being taken by the Govt. of India in skill development in recent years, a need was felt for providing institutional funding for the students undergoing specialized skill development programs in recognized institutions. The Government has estimated that the country would require 10 to 15 million skilled workers every year to support the development process. The initiatives being taken by the Govt. are for setting upnew training facilities, modernization of existing centres and intensive faculty development. The Model Educational Loan Scheme for Vocational Courses has been developed as an extension of the existing Model Educational Loan Scheme for pursuing higher education in India & Abroad, to support the national initiatives for skill development.

Definition A loan offered to a student which is used to pay off education-related expenses, such as college tuition, room and board at the university, or textbooks. Many of these loans are offered to students at a lower interest rate, such as the Perkins loan or Stafford loan. In general, students are not required to pay back these loans until the end of a grace period, which usually begins after they have completed their education Importance of Student Loans

Only because of student loans, most of the students are able to achieve their higher education goals. The students need not ask for monetary help from others while they continue their education. Student loans come to their rescue in meeting with the essential college fees and other educational expenses. The student may be able to repay the loan borrowed after he gets a job after completion of his studies. His pride also is improved when he is able to repay his loan properly. His credit rating also improves.

There are two types of student loans which the students can avail. Those are:1. Private student loans

2. Federal student loans

Private student loans are given by private lenders or by the educational institutions where the student undergoes education. The rate of interest will be higher than the federal student loan. Federal student loans are provided by the federal government and the rate of interest may be low or free. So, the federal Government student loans are more beneficial to the students looking for a student loan than the private student loan which has high interest rate.

Student loans play a vital role in helping the students come out of financial crisis in pursuing their educational dreams. In this economic situation, the parents of the students find it very difficult to fund their childrens education. Due to the finance problem, many of the meritorious students have to quit their education. So, taking student loan can help them in coming out of this crisis. So, without worrying for their educational expenses, students can fulfil their educational dreams

OVERVIEW OF EDUCATION LOANEver fancy your son attending the Harvard business school? Or, you, young lady, want to fly an aircraft? Perhaps, you have the admission letter from your dream university across seven seas; you now only need the dough...

If the obstacle is cash, an education loan is the answer. The icing on this cake is that such education loans not only cover the cost of the tuition fee but also almost all the expenses involved in the pursuit of academics. You just need a set of eminently gettable documents and a guarantor to set yourself on the road to academia.

Qualification Most college students in the United States qualify for federal student loans. Students can borrow the same amount of money, at the same price, regardless of their own income or their parents' income, regardless of their expected future income, and regardless of their credit history. Only students who have defaulted on federal student loans or have been convicted of drug offenses are excluded.

The amount students can borrow each year depends on their education level (undergraduate or graduate), and their status as dependent or independent. Undergraduates may receive lower interest rates than graduate students, but graduate students can typically borrow more per year.Private lenders may use different underwriting criteria, including income level, parents' income level, and other financial considerations. Students will generally only borrow from private lenders when they exhaust the maximum borrowing limit under federal loans. Several scholars have advocated eliminating the borrowing limit on federal loans and enabling students to borrow according to their needs (tuition plus living expenses) and thereby eliminating high-cost private loans RepaymentFederal student loan interest rates are established by Congress and listed in $ 20 U.S.C. $ 1087E (b). Because the interest rates are established by Congress, interest rates are a political decision. The federal student loan program currently runs a multibillion dollar "negative subsidy", or profit, for the federal government. Some scholars have suggested that federal student loan interest rates should be tailored to particular courses of study and reflect the riskiness of those different courses of study. They have also suggested that the program should be run at cost, or below cost, because of the benefits an educated workforce provides to society-lower burdens on public services, lower health costs, higher wages and tax revenues and lower unemployment.

Repayment typically begins anywhere from six to twelve months after a student leaves school, regardless of whether or not they complete their degree program. In some cases, repayment begins if course load drops to half time or less, so it is important to check the exact terms and conditions of any student loan.

The student may have multiple options for extending the repayment period, although an extension of the loan term will likely reduce the monthly payment, it will also increase the amount of total interest paid on the principle balance during the life of the loan. Extension options include extended payment periods offered by the original lender and federal loan consolidation. There are also other extension options including income sensitive repayment plans and hardship deferments. Extensions and consolidation will also add to the principal, many times unpaid interest and penalties become capitalized.

The Master Promissory Note is an agreement between the lender and the borrower that promises to repay the loan. It is a binding legal contract.

CRITICISM Since 2001, India has seen a sharp rise in the number of banks providing loans to students. There is no longer any need to shelve your plans for studying in India or abroad if you are a deserving student. You need to be enrolled in a university of repute or one that is sanctioned by the UGC/All India Council of Technical Education or any government institute. Loans usually depend on the chosen course, reputation of the institute, family assets and past academic record. A Comprehensive Educational Loan Scheme has been framed by the University Grants Commission in association with the Reserve Bank of India. Under this scheme, a deserving candidate

May get up to Rs. 7.5 lakhs as loan for studying in India and Rs. 15 lakhs for studying abroad.

Will not have to pay interests exceeding Prime Lending Rate for loans up to Rs. 4 lakhs. For loans beyond Rs. 4 lakhs, the student will have to pay PLR plus one percent. Banks will not ask for collateral or guarantee either for loans up to 4 lakhs.

Can repay the loan over a span of 5 to 7 years with a grace period of one year after the completion of studies.

Once you decide to apply for bank loans in India, here are a few points you should note:

Make sure to choose a bank near your campus

Documents to be submitted

1. Attested mark sheet of last qualifying examination for school and graduate studies in India. Proof of admission to the course.

2. Schedule of expenses for the course.

3. Copies of letter confirming scholarship, etc.

4. Copies of foreign exchange permit, if applicable.

5. 2 passport size photographs.

6. Statement of Bank account of the last six months.

7. Income Tax Assessment order not more than 2 years old.

8. Brief statement of assets and liabilities of borrower.

9. If you are not an existing bank customer, you would also need to establish youridentity and give proof of residence.

10. Copies of passport, air tickets, in case of admission to foreign university.

EDUCATION LOAN IN INDIANow, Education Loans are easily available from various banks in India. Many Nationalized banks are coming up with various Educational Loan schemes and more students can take up higher education despite of their financial problem.

Students Loan: Because of Students Loan the student can follow higher education will get the good degree for better job in their future. This is very encouraging step for the students who want to learn and their brighter future.

The list of banks provides education loan in Indian banks are:1) Bank of India

2) State Bank of India

3) Bank of Baroda

4) Dena Bank

5) HDFC Bank

6) Union Bank of India

7) UCO Bank and so many more banks are giving Educational Loans.

The list of bank provides education loan in abroad banks are:1) Axis Bank

2) IDBI Bank

History of state bank of india

Seal ofImperial Bank of India.

The roots of the State Bank of India lie in the first decade of 19th century, when theBank of Calcutta, later renamed theBank of Bengal, was established on 2 June 1806. The Bank of Bengal was one of three Presidency banks, the other two being the Bank of Bombay(incorporated on 15 April 1840) and theBank of Madras(incorporated on 1 July 1843). All three Presidency banks were incorporated asjoint stock companiesand were the result of theroyal charters. These three banks received the exclusive right to issue paper currency till 1861 when with the Paper Currency Act, the right was taken over by the Government of India. The Presidency banks amalgamated on 27 January 1921, and the re-organised banking entity took as its nameImperial Bank of India. The Imperial Bank of India remained a joint stock company but without Government participation.

Pursuant to the provisions of the State Bank of India Act of 1955, theReserve Bank of India, which isIndia's central bank, acquired a controlling interest in the Imperial Bank of India. On 1 July 1955, the Imperial Bank of India became the State Bank of India. The government of Indiarecently acquired the Reserve Bank of India's stake in SBI so as to remove any conflict of interest because the RBI is the country's banking regulatory authority.

In 1959, the government passed the State Bank of India (Subsidiary Banks) Act, which made eight state banks associates of SBI. A process of consolidation began on 13 September 2008, when theState Bank of Saurashtramerged with SBI.

SBI has acquired local banks in rescues. The first was the Bank of Behar (est. 1911), which SBI acquired in 1969, together with its 28 branches. The next year SBI acquired National Bank of Lahore (est. 1942), which had 24 branches. Five years later, in 1975, SBI acquired Krishnaram Baldeo Bank, which had been established in 1916 inGwalior State, under the patronage of MaharajaMadho Rao Scindia. The bank had been theDukan Pichadi, a small moneylender, owned by the Maharaja. The new banks first manager was Jall N. Broacha, a Parsi. In 1985, SBI acquired the Bank of Cochin inKerala, which had 120 branches. SBI was the acquirer as its affiliate, theState Bank of Travancore, already had an extensive network in Kerala.

The State Bank of India and all its associate banks are identified by the same bluekeyholelogo. The State Bank of Indiawordmarkusually has one standard typeface, but also utilises other typefaces.

On October 7, 2013, Arundhati Bhattacharya became the first woman to be appointed Chairperson of the bank

Scheme of education loan from state bank of India

Eligible Coursesa. Studies in India: Graduation, Post-graduation including regular technical and professional Degree/Diploma courses conducted by colleges/universities approved by UGC/ AICTE/IMC/Govt. etc Regular Degree/ Diploma Courses conducted by Autonomous Institutions like IIT, IIM etc Teacher Training/ Nursing Courses approved by Central Governmentor the State Government Regular Degree/Diploma Courses like Aeronautical, Pilot Training, Shipping etc. approved by Director General of Civil Aviation/Shipping Vocational Training and Skill Development Study Courses will not be covered under the regular Education Loan Schemes. A separate scheme for Loans for Vocational Education and Training has been launched which covers financing for such Vocational coursesb. Studies abroad: Job oriented professional/ Technical Graduation Degree courses/ Post Graduation Degree and Diploma courses like MCA, MBA, MS, etc offered by reputed universitiesExpenses considered for loan Fees payable to College/School/Hostel Examination/Library/Laboratory fees Purchase of Books/Equipment/Instruments/Uniforms, Purchase of computers- essential for completion of the course (maximum 20% of the total tuition fees payable for completion of the course) Caution Deposit/Building Fund/Refundable Deposit (maximum 10% tuition fees for the entire course) Travel Expenses/Passage money for studies abroad Cost of a Two-wheeler up to Rs. 50,000/- Any other expenses required to complete the course like study tours, project work etc.

Amount of Loan For studies in India, maximum Rs. 10 lacs Studies abroad, maximum Rs. 30 lacsEDUCATION LOANS SBI Student Loan Scheme Loan AmountRate of Interest*

For loans up to Rs.4 lacs 3.50% above Base Rate, currently 13.30% p.a.

Above Rs.4 lacs and up to Rs.7.50 lacs 3.75% above Base Rate, currently 13.55% p.a.

Above Rs.7.50 lacs 1.75% above Base Rate, currently 11.55% p.a.

*(0.50% concession in interest for girl students) * (1% concession for full tenure of the loan, if interest is serviced promptly as and when applied during the moratorium period, including course duration#)SBI Scholar Loan SchemeROI

List A100bps above base rate i.e., 10.80% p.a. at presentFurther concessions: 25 bps - work experience of more than 2 years 50 bps with parent/ spouse/ guardian as co-borrowers 75 bps - collateral security >= the loan amount(Effective rate of interest with all 3 concessions above not to be lower than 25 bps above base rate, presently 10.05 % p.a.)

List B175bps above Base rate i.e. 11.55% p.a. 1% concession for full tenure of the loan, if interest is serviced promptly as and when applied during the moratorium period, including course duration#

IT exemption under Section 80(E) in respect of interest paid in all Education LoansSBI Loan Scheme for Vocational Education and Training

3.50% above Base Rate, currently 13.30% p.a. 1% concession for full tenure of the loan, if interest is serviced promptly as and when applied during the moratorium period, including course duration#

Note: 1% interest concession for servicing interest is available if interest is serviced promptly soon after application but not later than the following month. ALL INTEREST RATES ARE SUBJECT TO CHANGE, WITHOUT NOTICE.Processing Fees No processing fee/ upfront charges Deposit of Rs. 5000/- for education loan for studies abroad which will be adjusted in the margin money

Repayment TenureRepayment will commence one year after completion of course or6 months after securing a job, whichever is earlier. Maximum Loan LimitRepayment Period

Up to Rs. 4 Lacs5-7 years

Above Rs. 4 Lacs and up to Rs. 7.5 Lacs5-7 years

Above Rs. 7.5 LacsUp to 12 years

SecurityParticularSecurity

Up to Rs. 4 lacs loan amountOnly Parent/ Guardian as co-borrower

Above Rs. 4 lacs to Rs. 7.50 lacs loan amountParent/ Guardian as co-borrower and Collateral security in the form of suitable third party guarantee*. *Third Party Guarantee can be replaced with Parent/Guardian as co-borrower provided the Gross Annual Income of Parent/Guardian (co-borrower) as given in latest Income Tax Return is 3 times of the loan amount.

Above Rs. 7.50 lacs loan amountParent/ Guardian as co-borrower and tangible collateral security

In case of married person, co-obligator can be either spouse or the parent(s)/ parents-in-law

Margin For loans up to Rs.4.0 lacs : No Margin For loans above Rs.4.0 lacs: Studies in India: 5% Studies Abroad: 15%Documentation Required

Completed Education Loan Application Form.

Mark sheets of last qualifying examination

Proof of admission scholarship, studentship etc

Schedule of expenses for the specified course

2 passport size photographs

PAN Card of the student and the Parent/ Guardian Borrower's Bank account statement for the last six months

Income tax Returns/ IT assessment order, of last 2 yrs (If IT Payee) Brief statement of assets and liabilities, of the Co-borrower

Proof of Income (i.e. Salary slips/ Form 16 etc. if applicable)

MOST IMPORTANT TERMS AND CONDITIONS

SBI-STUDENT LOAN SCHEME 1. Purpose for which the loan can be availed:

The loan will be sanctioned for extending financial assistance to deserving/meritorious students for pursuing higher education in India and abroad.

2. Courses Eligible:

a. Studies in India:

( Graduation, Post-graduation including regular technical and professional Degree/Diploma courses conducted by colleges/universities approved by UGC/ AICTE/IMC/Govt. etc

( Regular Degree/ Diploma Courses conducted by autonomous institutions like IIT, IIM etc

( Teacher training/ Nursing courses approved by Central government or the State Government

( Regular Degree/Diploma Courses like Aeronautical, pilot training, shipping etc. approved by Director General of Civil Aviation/Shipping

( Vocational Training and skill development study courses will not be covered under the Education Loan Scheme,

A separate scheme for

Loans for Vocational Education and Training has been launched Which covers financing for such Vocational courses

b. Studies abroad:

( Job oriented professional/ technical Graduation Degree courses/

Post Graduation Degree and Diploma courses like MCA, MBA, MS, etc offered by reputed universities

( Courses conducted by CIMA (Chartered Institute of Management

Accountants) -London, CPA(Certified Public Accountant) in USA etc.

3. Student Eligibility:

( Should be an Indian National

( Secured admission to Professional/Technical courses through entrance Test/Selection process.

( Secured admission to foreign university/Institutions.

( No minimum qualifying marks stipulated in the last qualifying examination

4. Expenses Considered for Loan:

(Fee payable to college/school/hostel: Where the student will be making his own boarding and lodging arrangements, the sanctioning authority is authorized to fund boarding and lodging expenses on the basis of estimate submitted by the student/ parent, provided such expenses are not more than those charged by the educational institution for boarders.

( Examination/Library/Laboratory fee.( Purchase of books/ equipments/ instruments/ uniforms, Purchase of computers-essential for completion of the course.

( Any other expense required to complete the course-like study tours, project work, thesis, etc. considered for loan is capped at

20% of the total tuition fees payable for completion of the course.

( Caution deposit /building fund/refundable deposit supported by Institution bills/receipts the amount considered for loan should not exceed 10% of the tuition fees for the entire course.

( Travel expenses/passage money for studies abroad.

( Cost of a two-wheeler up to Rs. 50,000 can be included in the expenses considered eligible for finance where the loan amount is secured by a suitable third party guarantee and/or tangible collateral security. Two-wheeler can be necessary in some cases where hostel and college are far apart

( Premium of the insurance policy covering the life of the borrower for loan

5. Maximum Loan Amount:

Studies in India -Maximum Rs. 10.00 lacs

Studies Abroad -Maximum Rs. 30.00 lacs

6. Margin: Up to Rs.4 lacs: Nil

Above Rs.4 lacs: Studies in India: 5 %

Studies Abroad: 15 %( Scholarship/assistantship to be included in margin.( Margin may be brought in on year-to-year basis as and when as and when disbursements are made, on a pro-rata basis.

7. Security:

a) Up to Rs. 4 lacs

( Co-obligation of parents

( No security

b) Above Rs. 4 lacs and up to Rs.7.50 lacs

( Co-obligation of parents together with collateral security in the form of suitable third party guarantee.

( The sanctioning authority can replace Third Part Guarantee with Parent/ Guardian as co-borrower provided the Gross Annual income of Parent/ Guardian (co-borrower) as verified by the latest

Income Tax Return is 3 times the loan amount.c) Above Rs.7.50 lacs

( Co-obligation of parents together with tangible collateral security of suitable value, along with the assignment of future income of the student for payment of instalments. 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

in the name of student/ parent/ guardian or any other third party.

(The documents should be executed by both the student and the parent/guardian as joint-borrower. We clarify that if the student is a minor, the documents will be signed by the guardian acting `for self as well as `for and on behalf of the minor.

The co-obligator should be parent(s)/guardian of the student borrower.

In case of married person, co-obligator can be spouse or the parent(s)/parents in-law.

8. Processing Charges:

No processing/upfront charges may be collected on educational loans.

For loans to students going abroad:

All those students who approach us for an education loan of more than Rs.4.00 lacs for studies abroad will be required to make a deposit of Rs.5000/-which will be adjusted against the contribution of margin money or the interest payable on the loan, in case the loan is availed by the applicant. If the applicant does not avail the loan within a period of 4 months of sanction of the loan, the amount will be forfeited.

9. Interest Charges: Loan Amount

Rate of Interest*

For loans up to Rs.4 lacs 3.50% above Base Rate, currently 13.20% p.a.

Above Rs.4 lacs and up to Rs.7.50 lacs 3.75% above Base Rate, currently 13.45% p.a.

Above Rs.7.50 lacs 1.75% above Base Rate, currently 11.45% p.a.

a.0.50% concession in interest rate for girl students availing

Education Loans with effect from 2nd March 2009

b.1% concession in rate of interest to be provided for full tenure of the loan if full interest is serviced during the moratorium period (including course duration). The interest should be serviced promptly soon after application but not later than the following month to avail the concession

c. As the concession of 1% is available for servicing interest during moratorium, interest in the loan a/c should be reset when the repayment starts and excess interest of 1% p.a. pertaining to the study period and moratorium period should be refunded/ credited to the loan a/c.

d. Simple interest to be charged during moratorium period.

e. Penal interest @ 2% to be charged for loans above Rs. 4 lacs for the overdue amount and overdue period.

10. Sanction & Disbursement:

(The loan is generally sanctioned at the branch nearest to the permanent residential address/place of domicile of the student/parents.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.

(For studies in India, in genuine cases, the tuition fee already paid to the institute by the borrower from their own sources for first semester at the time of counselling/ admission may be considered for reimbursement provided the reimbursement is claimed within 6 months of the payment.11. Repayment:

Repayment Holiday/ Moratorium: Course period + 1 year, or 6 months after getting job, whichever is earlier.

Maximum Loan Limit

Repayment Period Up to Rs. 4 Lacs5-7 years

Above Rs. 4 Lacs and up to Rs. 7.5 Lacs 5-7 years

Above Rs. 7.5 Lacs Up to 12 years

(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.

(The accrued interest during the moratorium period/repayment holiday period to be added to the principal and repayment to be fixed in Equated Monthly Installments (EMI).

12. Top Up Loan

Second loan (Top Up) Loan within the overall limit is permitted to pursue a professional course in India or abroad provided such further studies are commenced during the moratorium period of the first loan and subject to the second loan being allowed with the security requirements as applicable to the aggregate loan limit. The projected income of the student, after placement, should be sufficient to cover full loan repayment. As the student will not be able to take up a job after completion of the first course, his obligation to repay the loan after one year of completion of the first course would also need to be deferred. In such cases, the moratorium period may be extended for the duration of the second course and the combined repayment shifted to one year after the completion of the second course, or 6 months after

taking up a job whichever is earlier

13. Timeline for Disposal of Loan Application Maximum15 days, after the receipt of duly completed application with supporting documents.

Customer Service:

For any service related issue, customer can get in touch with SBI:

(Calling Customer Help Line Numbers

(Contact Customer Grievance Cell at our Local Head Offices

(Write to Grievance Cell at our Local Head Offices

(Details on Help line Numbers and Grievance Cell available on www.sbi.co.in)

In case a customer is not satisfied with the handling of grievance by the

Local Head Office, a communication may be sent (enclosing the message sent earlier to Local Head Office) to the-Deputy General Manager (Customer Service), Customer Service Dept, State Bank of India;

State Bank Bhawan, 4th floor; Madame Cama Road,

Mumbai-400 021,

Telephone No: 22029456, 22740431, 22740432, 22740433

Fax no. (022) 22742431

E-mail address [email protected].

Credit Information Report.Terms & Conditions mentioned herein are subject to change without prior notice.

History of Punjab National BankPunjab National Bank was registered on 19 May 1894 under the Indian Companies Act , with its office inAnarkali Bazaar,Lahore. The founding board was drawn from different parts of India professing different faiths and a varied back-ground with, however, the common objective of providing country with a truly national bank which would further the economic interest of the country. PNB's founders included several leaders of theSwadeshimovement such asDyal Singh Majithiaand Lala Harkishan Lal, Lala Lalchand, Shri Kali Prosanna Roy, Shri E.C. Jessawala, Shri Prabhu Dayal, Bakshi Jaishi Ram, and Lala Dholan Dass.[2][3]Lala Lajpat Raiwas actively associated with the management of the Bank in its early years. The board first met on 23 May 1894. Ironically, the PNB Website now claims Lala Lajpat Rai to be the founding father, surpassing Rai Mul Raj and Dyal Singh Majithia.[4]The bank opened for business on 12 April 1895 inLahore.

PNB has the distinction of being the first Indian bank to have been started solely with Indian capital that has survived to the present. (The first entirely Indian bank, Commercial Bank, was established in 1881 inFaizabad, but failed in 1958.)

PNB has had the privilege of maintaining accounts of national leaders such asMahatma Gandhi, ShriJawahar Lal Nehru, ShriLal Bahadur Shastri, ShrimatiIndira Gandhi, as well as the account of the famousJalianwala BaghCommittee.

scheme of education loan from punjab national bank

The Scheme aims at providing financial assistance to deserving / meritorious students (Indian Nationals) for pursuing higher professional and technical education in India or abroad.

Studies in India 1. Approved courses leading to Graduate/ Post Graduate degree and PG Diplomas conducted by recognized colleges/ universities recognized by UGC/ Govt./ AICTE/ AIBMS/ ICMR etc.

2. Courses like ICWA, CA, CFA etc.

3.Courses conducted by IIMs, IITs, IISc, XLRI. NIFT, NID etc.

4. Regular Degree/Diploma courses like Aeronautical, pilot training, shipping, nursingetc., approved by Director General of Civil Aviation/Shipping, if the course is pursued in India.

5. Approved courses offered in India by reputed foreign universities.

6.Admission under Management Quota may also be considered.

7. for studying part-time job oriented courses (evening classes or otherwise), which are approved/recognized by the regulatory body/ authority.8. Job oriented specialized programmes like maritime courses which are offered in collaboration with foreign institutions and may not be having recognition in India.

Studies abroadi)Graduation: For job oriented professional/technical courses offered by reputed universities.

ii)Post graduation: MCA, MBA, MS, etc.

iii)Courses conducted by CIMA- London, CPA in USA etc.

iv)Degree/Diploma courses* like aeronautical, pilot training, shipping etc. provided these are recognized by competent regulatory bodies in India/abroad for the purpose of employment in India/abroad.

*Diploma Course and certificate courses shall not be covered under the eligible courses for study abroad except as mentioned above.

Eligibility:

Student eligibility

a) Should be an Indian National.

b) Should have secured admission to a higher education course in recognized institutions in India or Abroad through Entrance Test/ Merit Based Selection process after completion of HSC(10 plus 2 or equivalent). OR Where the admission is purely based on marks scored in qualifying examinations, there is a cut off percentage of marks of 50% for SC/ST and 60% for General category.

Expenses considered for Loan

1.Fee payable to College / School / Hostel

2.Examination / Library / Laboratory fee.

3.Purchase of books / equipments / instruments / uniforms.

4.Caution Deposit / Building Fund / Refundable Deposit supported by Institution Bills / Receipts,

5.Travel Expenses / Passage money for studies abroad.

6.Purchase of computersat reasonable cost, if required for completion of the course.

7.Insurance premium for student borrower, if applicable

8. Any other expense required to complete the course- like study tours, project work, thesis etc.

Quantum of Finance

Need based finance, subject to employability and earning potential of the student with prescribed marginas per the following ceilings :-

For studies in India: Maximum Rs.10.00 lacs.

For studies abroad: Maximum Rs.20.00 lacs.

MarginUp to Rs.4.00 lacsNil.

Above Rs.4.00 lacsStudies in India5%

Studies Abroad15%

Security

Up to Rs.4.00 lacs:Parent(s)/guardian be made joint borrower (s). No Security

Above Rs 4.00 lacs and Up to Rs 7.5 lacs:Besides the parent(s)/guardian executing the documents as joint borrower(s), collateral security in the form of suitable third party guarantee will be taken

Above Rs 7.5 lacs:Parent(s)/guardian be joint borrower(s).Tangible collateral security of suitable value acceptable to bank along with the assignment of future income of the student for payment of installments

The security can be in the form of land / building / Govt. Securities / Public Sector Bonds / Units of UTI, NSC, KVP, LIC Policy, Gold, Shares/ Mutual Funds/ Debentures, Bank Deposit in the name of the student parent / guardian or any other third party or any other tangible security acceptable to the bankwith suitable Margin.

Repayment

Repayment of loan will be in equated monthly instalments (EMIs) for period as under:

For loans up to Rs.7.50 lakh- up to 10 years

For loans above Rs.7.50 lac - upto 15 years

Repayment holiday/Moratorium:

Course period + 1 year or 6 months after getting job, whichever is earlier.

Note : No prepayment penalty is levied for prepayment of loan.

Sanctioning Authority may consider telescoping of the repayment with stepped up installment with passage of time over the repayment period in cases where salary levels at the start of the career do not facilitate comfortable payment of EMI (e.g. professionals like Doctors)

Upfront Fee

For Study in India - Nil

For Study abroad -1% with a minimum of Rs. 10,000/-(refundable onavailment of the loan amount)

Documentation Charges

Up to Rs. 4 lacs Rs.270/- + Service Tax & Education Cess

Above Rs.4 lacsRs.450/- + Service Tax & Education Cess

Additional Benefits provided to the students by PNB

Simple interest is charged during theStudy period +Moratorium period. A rebate of 0.50% in rate of interest permitted to women beneficiaries for loans up to Rs. 10 Lakh for studies in India and Rs 20 Lakh for studies abroad for existing as well as new girl student borrowers. 1% interest concession may be provided for loaners if the interest is serviced during the study period/moratorium period and regular repayment of monthly installments during repayment period.

The loan be disbursed in stages as per the requirement/ demand directly to the Institutions/ Vendors of equipments/ instruments to the extent possible.

Second time Education Loan can be sanctioned to the same student borrower for completion of next higher course.

Full interest subsidy is provided during the moratorium period to students, who have taken education loan and belong to Economically Weaker Section (EWS), with an annual gross parental family income upper limit of Rs.4.50 lakh per year from all sources. Detail is as under:

Central Scheme to provide Interest Subsidy- (CSIS)

The scheme provides full interest subsidy during the period of moratorium on education loans taken by EWS students for pursuing any of the approved courses of studies in technical / professional streams from recognized institutions in India.

Applicability

Linked with the existing education loan scheme of IBA and is restricted to students enrolling in recognized professional courses ( after class XII) in India, in educational institutions established by Act of Parliament, other institutions recognized by the concerned statutory body, IIMs and other institutions set up by the Central Government.

Also applicable to the students of accredited universities/ institutions and recognized professional courses, as per Annexure I, which is administered by the Ministry of Tourism.

Moratorium Period

Course Period plus one year or six months after getting job, whichever is earlier.

Income Limit / Proof

To avail the benefit, Income certificates issued by designated state authorities to be submitted. Details available with branches. List of issuing authority as per Annexure II

Eligibility for Subsidy

The interest subsidy shall be available to the eligible students only once, either for the first undergraduate degree course or the post graduate degrees / diplomas in India inclusive of integrated courses (graduate + post graduate).

Interest subsidy under this scheme shall not be available for those students who either discontinue the course midstream or who are expelled from the Institutions on disciplinary or academic grounds.

However, the interest subsidy will be available for the actual period of study, only if the discontinuation was due to medical grounds for which necessary documentation to the satisfaction of the Head of educational institution will have to be given.

Interest Rates- Loans & Advances

BPLR - 14 % ( w.e.f. 01.05.2012)

BASE RATE - 10.25 % ( w.e.f from 09.02.2013)

Existing borrowers have the option to continue with the existing BPLR System till expiry of their existing contract with the bank or shift to the Base Rate System for which they may contact the concerned branch.

Educational interest rate

BPLR SystemBase Rate SystemRepayable in less than 03 yrsRepayable in 03 yrs & aboveRepayable in less than 03 yrsRepayable in 03 yrs & abovea. Vidyalakshyapurtii. Loan up to Rs.4 lacsBPLR 0.50%BPLR - 1.00 + TPBR+3.00%BR+2.50%+ TPii. Loan over Rs.4 lacs to up to 7.50 LacsBPLR + 0.25%BPLR -0.25% + TPBR+4.00%BR+3.50%+ TPiii. Loan over Rs. 7.50 lacsBPLR + 0.25%BPLR -0.25% + TPBR+3.50%BR+3.00% + TPSarvottam Shiksha ** (For Existing A/c s only)i. Loan up to Rs.4 lacsBPLR 0.50%BPLR - 1.00% + TPBR+2.50%BR+2.00%+TPii. Loan over Rs.4 lacsBPLRBPLR -0.50% + TPBR+3.00%BR+2.50%+TP(** Scheme since being merged with Vidyalakshayapurti w.e.f. 20.12.08)

Interest rates of PNB

Repayable in less than 03 yrsRepayable in 03 yrs & above Loans up to Rs 15 lacBR+1.50BR+1.50%+TPInterest Rates - Loans & Advances

BPLR: 14.00% w.e.f. 01.05.2012

BASE RATE: 10.25% w.e.f. 09.02.2013

Interest Rate on Advances Linked to BPLR and Base Rate

Interest Rate on Advances - Retail Segment LoanDisclosure: State Bank of India is authorized to disclose from time to time any information relating to the loan to any credit bureau (Existing or Future) approved by Government of India and Reserve Bank of India without any notice to the borrower. State Bank of India is also authorized to make inquiries with any Credit Bureau and get the applicants

DATA ANALYSIS&INTERPROTATION 3.1COMPARITIVE STUDY OF EDUCATION LOAN SANCTIONED PANJAB NATIONAL BANK & STATE BANK OF INDIA IN 2010-11

bankintrest rate up to 4 lacs

sate bank of india12.50%

punjab national bank10.50%

In the above table we can see the intrest rate of education loan PUNJAB NATIONAL BANK & STATE BANK OF INDIA. Punjab national bank is 10.50% & SBI is 12.50% p.a...The intrest rate of loan amount up to 4 lacs there is no security required. The actual interst rates at which an individual will be able to get a education loan depend on individual financial profile & negotiating ability. COMPARITIVE STUDY OF EDUCATION LOAN SANCTIONED PANJAB NATIONAL BANK & STATE BANK OF INDIA IN 2010-11

bankintrest rate up to 4 lacs TO 7.5 LACS



In the above table we can see the intrest rate of education loan PUNJAB NATIONAL BANK & STATE BANK OF INDIA. Punjab national bank is 11.25% & SBI is 13.25% p.a...The intrest rate of loan amount above Rs.4lacs & up to Rs.7.5 lacs there is no security required. The actual interst rates at which an individual will be able to get an education loan depend on individual financial profile & negotiating ability.

COMPARITIVE STUDY OF EDUCATION LOAN SANCTIONED PANJAB NATIONAL BANK & STATE BANK OF INDIA IN 2010-11.

bankintrest rate ABOVE 7.5 lacs



In the above table we can see the intrest rate of education loan PUNJAB NATIONAL BANK & STATE BANK OF INDIA. Punjab national bank is 11.25% & SBI is 13.25% p.a...The intrest rate of loan amount above Rs.7.5lacs there is security required. The actual interst rates at which an individual will be able to get an education loan depend on individual financial profile & negotiating ability.

3.2COMPARITIVE STUDY OF EDUCATION LOAN SANCTIONED PANJAB NATIONAL BANK & STATE BANK OF INDIA IN 2011-12.

bankintrest rate up to 4 lacs



In the above table we can see the intrest rate of education loan PUNJAB NATIONAL BANK & STATE BANK OF INDIA. Punjab national bank is 10.25% & SBI is 12.00% p.a...The intrest rate of loan amount up to 4 lacs there is no security required. The actual interst rates at which an individual will be able to get a education loan depend on individual financial profile & negotiating ability. COMPARITIVE STUDY OF EDUCATION LOAN SANCTIONED PANJAB NATIONAL BANK & STATE BANK OF INDIA IN 2011-12.BANKRATE OF INTREST ABOVE 4 LACS UP TO 7.5 LACS

SBI13.05%

PNB10.75%


COMPARITIVE STUDY OF EDUCATION LOAN SANCTIONED PANJAB NATIONAL BANK & STATE BANK OF INDIA IN 2011-112bankintrest rate ABOVE 7.5 lacs




3.3 COMPARITIVE STUDY OF EDUCATION LOAN SANCTIONED PANJAB NATIONAL BANK & STATE BANK OF INDIA IN 2012-13bankintrest rate up to 4 lacs



In the above table we can see the intrest rate of education loan PUNJAB NATIONAL BANK & STATE BANK OF INDIA. Punjab national bank is 10.50% & SBI is 13.30% p.a...The intrest rate of loan amount up to 4 lacs there is no security required. The actual interst rates at which an individual will be able to get a education loan depend on individual financial profile & negotiating ability. 3.2 COMPARITIVE STUDY OF EDUCATION LOAN SANCTIONED PANJAB NATIONAL BANK & STATE BANK OF INDIA IN 2012-13BANKRATE OF INTREST ABOVE 4 LACS UP TO 7.5 LACS

SBI13.55%

PNB11.25%


3.3 COMPARITIVE STUDY OF EDUCATION LOAN SANCTIONED PANJAB NATIONAL BANK & STATE BANK OF INDIA IN 2012-13bankintrest rate ABOVE 7.5 lacs




Summary of findings bank strategy of education loan 1. Frequent changes in regulation made by central bank affect the banks to a larger extent because banks has to follow according to the directions given by the central bank which reduces the profit of the bank. 2. Now a days banks cannot charge their own management interest rates they are force to look the market and follow according to the RBI rules and regulations, this has unable them to balance both the income and expenses ,for eg., now the fixed deposit interest rate is 10.5% and is housing loan interest rate is 8.5%, they have the bear the loss of -2% which the banks have to pay themselves. 3. Middle class people cannot afford to the current interest rate, it is too expensive for them. 4. Procedures for applying the loan is very time consuming , lengthy and very complicated. 5. Inflation has also affected the banks indirectly. 6. Political pressures. 7. Sanctioning of loan is not easy, it takes longer time. 8. Misappropriation in the bank. Suggestion and recommendationSuggestion and recommendation Banks should go for advertisement Campaign from Scratch. Banks should try to cash its brand image. Strong branch network should be made and staff personnels incentives should be increased. Banks should increase its product line in education loans. Special scheme for non-professional students as well as for professional students should be increased. Banks should introduce some new model keeping in mind the loan suitable for medium income group customer. Presence of some famous personality in Advertisement or in Pamphlets insuring better retention in the mind of customers. In this age of information, the customer before taking loans collects all the information about various brands. The banks should provide a combined booklet of the product range in order to upgrade the knowledge of future takings of loans.ConclusionConclusion On the basis of above findings and comparison among PNB & SBI it is clearly observe that public banks have more reach, variety and flexibility in their education loan schemes Maximum loan for studies in India is ranging from Rs. 7.50 lacs to 10.00 lacs and for studies in Abroad it is Rs. 15-20 lacs by public banks Interest rates are vary from 10.25% to 13.25% p.a and PNB uses PTLR system. All banks have same repayment facility i.e. one year after completion of course or 6 months after securing a job, whichever is earlier. Repayment period is also vary from 5-7 year after commencement of repayment in the case of education loan is taken from public banks Margin is same in PNB & SBI i.e. Upto Rs. 4.00 lacs : Nil Above Rs. 4.00 lacs : Studies in India 5% Studies in Abroad 15% PNB & SBI charge processing fees .Deposit of Rs. 5000/-for education loan for studies abroad which will be adjusted in the margin money. BIBILIOGRAPHYBooks referred:

Dr.P.C.Tulasian, Financial Management, 1st edition, S.Chand Publication, Pg.no.13.13 - 13.15 E.Dharmaraj, Financial Services, 1st edition, S.Chand Publication, Pg.no.65 - 72. K.D. Basava Elements of Indian economics page no 10.5 12th edition of loan compendium- retail banking schemes. Websites:-

www.pnb .com

www.statebankofIndia.com

www.pnb.com www.apnaloan.com www.timesofmoney.com www.pnbhfl.com 71

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