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COMPARATIVE STUDY OF EDUCATION LOAN

WITH REFERENCE TO SBI,PNB AND HDFC”

A DISSERTATION SUBMITTED TO

AMITY BUSINESS SCHOOL

AMITY UNIVERSITY LUCKNOW CAMPUS

Under the Guidance of : Submitted by :

Assit Prof. Mahesh Kumar RohitNandan

(Faculty Guide) MBA(G)- 4TH

Sem.

ABS,Lucknow A7001910043

(Finance)

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CONTENTS

TITLE PAGE NO.

1. STUDENT’S CERTIFICATE 3

2. FACULTY CERTIFICATE 4

3. ACKNOWLEDGEMENT 5

4. SYNOPSIS OF THE REPORT 6

5. INTRODUCTION 7-10

6. RESARCH METHODOLGY 11-13

7. PUNJABN NATIONAL BANK (PNB) 14- 28

7. STATE BANK OF INDIA (SBI) 29- 40

8. HOSING DEVELOPMENT FINANCE CORPORATION (HDFC) 41- 53

9. FINDINGS 54-58

10. CONCLUSION 59-61

11. RECMONDATION 62-63

12. APPENDIX 64-73

13. BIBLOGRAPHY 74-75

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STUDENT’S CERTIFICATE

Certified that “COMPARATIVE STUDY OF EDUCATION LOAN WITH

REFRENCE TO SBI, PNB AND HDFC BANK” is prepared based on the

dissertation project undertaken by RohitNandan under the able guidance ofMr

Mahesh Kumar, Asstt.Professorin partial fulfillment of the requirement for award

of degree of Master of Business Administration (MBA-G) from Amity University,

Uttar Pradesh.

Date.______________

Signature Signature Signature

RohitNandan Mr.Mahesh Kumar Mr.V.P.Sahi

Student Asstt.Prof.(Faculty Guide) Director (ABS)

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FACULTY CERTIFICATE

Forwarded here with a Dissertation report on “COMPARITIVE STUDY OF

EDUCATION LOAN WITH REFRENCE TO STATE BANK OF INDIA (SBI), PUNJAB

NATIONAL BANK (PNB) AND HOUSING DEVELOPMENT FINANCE CORPORATION

INDIA (HDFC) submitted by ROHIT NANDAN Enrollment NO. A7001910043,

student of MBA

(G )4th Semester (2010-12).

This project work is partial fulfillment of the requirement for the degree of Master

in

Business Administration from Amity University Lucknow Campus, Uttar Pradesh.

Mr. Mahesh Kumar

(ASSTT. PROFESSOR)

……………………………………

AMITY UNIVERSITY,

LUCKNOW CAMPUS

UTTAR PRADESH

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ACKNOWLEDGEMENT

Behind every study there stands a myriad of people whose help and contribution

make it successful. Since such a list will be a prohibitively long, I may be excused

for important omissions.

I feel great pleasure in submitting this report as a part of practical studies in the

professional course of management. This training has helped me a lot in acquiring

valuable knowledge regarding the practical implementation of the theoretical

learning. This report is a joint venture of a number of experts. Their sincere and

scholastic guidance has provided me a source of constant inspiration during my

training.

It has been a great learning experience on this project entitled “Comparative

Study Of Education Loan With Reference TO SBI, PNB, And HDFC”.

I would like to thanks Assistant Prof. Mr. Mahesh Kumar for his able guidance and

supportthrough out my project completion.

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SYNOPSIS OF THE REPORT

Title - COMPARATIVE STUDY OF EDUCATION LOAN WITH

REFRENCE TO SBI , PNB , HDFC BANK

OBJECTIVE-

The objective of this research is to compare education loan schemes & policies of the Punjab National Bank (PNB), State Bank of India (SBI) and Housing Development Finance Corporation INDIA (HDFC) , and which bank provide better service of education loan .

In this we study , that what are the term and condition of the education

loan , how much the rate of interest charge against the loan and what extra

beneficial service they provide . What is the procedure of getting education

loan , what are the documentation required for the getting the loan .

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EXECUTIVE SUMMARY

The main of the project is to throw light on what is education loan- why is it

important in today’s life and what are the benefits of getting education loan with

the banks . Beside this there are many banks in India who provide education loans

and each bank has its own rules and policies regarding education loan and this

help in making comparison of plans and policies .

The project is totally focusing on the consumer behavior toward types of

education loan of different banks , and as well as the what is current scenario of

education loan in the country .In India education loan are provided by almost

every bank such as Private Bank , Public Bank and Foreign Bank. Every sector of

banks have different policies regarding education loan .

So to know that which sector of bank has good enough to attract more consumer

in to their bank , we have done the study of education loan of different bank and

collect the important information .

After collecting all the related information about education loan , then we

compared it with three banks i.e SBI, PNB , and HDFC. And on the basis of this

comparison , result is concluded , which bank is providing better and good facility

of education loan .

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INTRODUCTION Education loans can augment the boundaries of what you can achieve Education never ends – it is not said without reason. We are educated all our lives and getting an education not only is a great achievement but something that gives you the tools to find your own way in the world. Education is indispensable; little do we realize how much more it can bring to us in terms of worldly amplifications. Anyone can have propensity and the natural endowment for education. But one might not have the resources to finance their education. You certainly can’t let lack of resources impede you from advancing your prospects through education. Then you accidentally stumble upon the word ‘education loans’. Loans for education – you have never thought about it as a feasible arrangement. Education loans can open newer panoramas in regard to your education aspirations. Education loans are open to all people in all its myriad forms. Education loans can realize your education plans or the education plans of your children. You can strengthen you own future and the future of your son or daughter with education loans. An extensive range of student and parent loans are presented under the category of education loans. There are many types of education loans. Discerning about the types of education loans will help you in making the accurate decision. The single largest resource of education loans is federal loan. The two main federal education loan programs are the Federal Family Education Loan Program and the Federal Direct Loan Program. In the Federal Family Education Loan Program the bank, credit union or the

school is the lender. While the federal direct loans program, the department of education is the lender. Private education loans are offered to people so that they can provide financial backup to their education plans. Private education loans are not endorsed by other government agencies but are provided by other financial institutions. Private education loans program are optimum for both undergraduate and graduate studies.

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Formal education is requisite for future success. Though this is not a hard and fast rule, but education certainly helps you in gaining an upper hand. With universities getting expensive by each day an education loan will certainly give you an incentive to go ahead with your education plans. Each year while contemplating on your education plans the thought of finances almost invariably comes in. While working towards you degree, you are constantly plagued about paying for the education fees, books, and other living expenses. Education loans can provide funding for tuition fees, board and room, books computer, and even student travel. An education loan can help you with all these expenses. Education loans are sufficient enough to take care of all these expenses. If you have been forced to drop your education for any reason, you can still take up your education at any point of time. Irrespective of your age and also where you have left your education. There are no specific eligibility criteria for education loans. Any person who is in need of sponsorship for education can find an education loan that befits his or her financial necessity. Loan amount on education loans vary with the kind of education you wantto pursue. The repayment options with education loans will similarly accommodate your personal financial preferences. You can either repay interest amount while still in school or six months after graduation. Education loans offer up to ten years for repayments. The refund alternatives on education loans also include deferment, forbearance and consolidation. The various sites on education loans can give you innumerable repayment options and monetary remuneration. Education loans will help you in planning your life after graduation. However, an education loan like every loan is a huge financial obligation. An education loans is generally the first substantial loan for most people and therefore the first major expense. Do not be completely dependent on your education loans for the funding of your complete education. Try to apply for any other financial

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sustenance like university grants, scholarships, fellowships, work study programs and assistance ship and any other form of aid. This will certainly encourage a fluid dispensation of your education loans. You can start by going to the financial aid office in your school or university. It will provide you further insight to the kind of education loans, you must apply for. Education is an experience of life. It is so rewarding in itself that it helps you to manage almost everything in your life. Education loans discipline your impulse towards education and training into a fruitful contrivance. The payoff is delicious in terms of improved quality of life. Education is expensive! Is it? With education loans it can’t be. Now, you don’t have to take the road in front of you. Make your own road with education loans.

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RESEARCH METHODOLOGY

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RESEARCH METHODOLOGY

PROJECT TITLE: “Comparative Study of Education Loan with Reference to PNB, SBI and HDFC”. To compare education loan schemes & policies of the Punjab National Bank (PNB), State Bank of India (SBI) and Housing Development Finance Corporation INDIA (HDFC)

METHODOLOGY : In this research I have adopt the Exploratory Research method only for PNB, SBI and HDFC Education loan schemes for just compare the offer document of these three banks.

DATA SOURSE:

Secondary data is taken from different books and financial information published in newspapers and from the banks websites and other related websites.

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SCOPE: Research scope is only three banks and these three banks are State Bank of India (SBI), Punjab National Bank (PNB),and Housing Development Finance Corporation (HDFC).

LIMITATIONS: There are some limitations in this research; these limitations are as follows – · Time limitation · Many banks provide education loan but in this research only three banks are taken for consideration. · Expenditure on research · Some banks are not provided their internal information/circular

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PUNJAB NATIONAL BANK (PNB) EDUCATION LOAN SCHEAMES

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“VIDYA LAKSHYAPURTI – EDUCATION LOAN SCHEME” 1. OBJECTIVE To provide financial support to deserving / meritorious students for pursuing education in India and abroad. The Scheme aims at providing financial assistance to meritorious students with an opportunity including undertaking basic education and to the meritorious students to pursue higher, professional and technical education.

2. ELIGIBILITY 2(i) Courses eligible a) Studies in India · School Education including Plus 2 stage · Graduation courses B.A., B.Com., B.Sc.,etc. · Post Graduation courses : Masters & Ph.D. · Professional courses : Engineering, Medical , Agriculture, Veterinary, Law, Dental, Management, Computer etc.

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· Computer Certificate courses of reputed institutes accredited to Department of Electronics or institutes affiliated to University · Courses like ICWA, CA, CFA etc. · Courses conducted by IIM, IIT, IISc, XLRI, NIFT, etc. · Courses offered in India by reputed foreign University. · Evening Courses of approved Institutes. · Other Courses leading to Diploma / Degree etc. conducted by Colleges / Universities approved by UGC / Govt. / AICTE / AIBMS / ICMR etc. · Courses offered by National Institutes and other reputed Private Institutes.

b) Studies abroad · Graduation – For job oriented professional / technical courses offered by reputed universities. Credentials of the Educational Institution may be got certified from authenticated sources / Embassy in India. · Post – Graduation – MCA, MBA, MS etc. · Courses conducted by CIMA – London, CPA in USA etc.

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2(ii)Student eligibility · Should be an Indian National · Secured admission to Professional / Technical courses through Entrance Test / Selection process. · Secured admission to foreign University / Institutions. · Student should have secured pass marks in the qualifying Examination for admission to Graduation Courses.

2(iii) Expenses considered for Loan · Fee payable to Collage / School / Hostel. · Examination / Library / Laboratory fee. · Purchase of books / equipments / instruments / uniforms. · Caution Deposit / Building Fund / Refundable Deposit supported by Institution Bills / Receipts. · Travel Expenses / Passage money for studies abroad. · Purchase of computers – essential for completion of the Course. · Any other expense required to complete the course – like study tours, project work, thesis, etc.

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3.QUANTUM OF FINANCE Need based finance, subject to repaying capacity of the parents / students with margin and the following ceilings :- · Studies in India - Maximum Rs. 10.00lacs. · Studies abroad - Maximum Rs. 20.00lacs.

4. MARGIN UptoRs. 4.00 lacs: Nil Above Rs. 4.00 lacs: Studies in India 5% Studies in Abroad 15% · Scholarship / assistantship to be included in Margin. · Margin may be brought in on year-to-year basis as and when disbursements are made on a pro-rata basis.

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5. SECURITY No Security may be insisted upon for loans up to Rs. 4.00 lakhs. However, for loans above Rs. 4.00 lacs, Collateral Security of Suitable value (atleast equal to loan amount) or co-obligation of parents / guardian / third party alongwith assignment of future income of the student for payment of instalment may be obtained viz., :- UptoRs. 4.00 lacs: No Security. Above Rs. 4.00 lacs: Collateral Security of Suitable value (equivalent to 100% of the amount of loan) or co-obligation of parents / guardian / third party. Above Rs. 7.5 lacks : Co-Obligation of Parents. Collateral Security of suitable value along with Assignment of future income of the student for payment of instalment.

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NOTE: The document should be executed by both the student and the parent/ guardian. · 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 the student parent / guardian or any other third party with suitable Margin. · Wherever the land / building is already mortgaged, the unencumbered portion can be taken as security an II charge basis provided it covers the required Loan amount. · In case the loan is given for purchase of Computer, the same to be Hypothecated to the Bank.

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6. RATE OF INTEREST

Interest rates of PNB Pratibha#

Repayable in less than 03 yrs Repayable in 03 yrs& above

Loans up to Rs 15 lac BR+1.50 BR+1.50%+TP

BPLR System Base Rate System

Repayable in less than 03

yrs

Repayable in 03 yrs& above

Repayable in less than 03

yrs

Repayable in 03 yrs& above

a. Vidyalakshyapurti

i. Loan upto Rs.4 lac BPLR – 0.50% BPLR - 1.00 + TP BR+3.00% BR+2.50%+ TP

ii. Loan over Rs.4 lac to upto 7.50 Lacs

BPLR + 0.25% BPLR -0.25% + TP BR+4.00% BR+3.50%+ TP

iii. Loan over Rs. 7.50 lac

BPLR + 0.25% BPLR -0.25% + TP BR+3.50% BR+3.00% + TP

SarvottamShiksha ** (For Existing A/cs only)

i. Loan upto Rs.4 lac BPLR – 0.50% BPLR - 1.00% + TP BR+2.50% BR+2.00%+TP

ii. Loan over Rs.4 lac BPLR BPLR -0.50% +

TP BR+3.00% BR+2.50%+TP

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7.REPAYMENT - Repayment Holiday / Moratorium Course period + 1 year OR 6 months

after getting job, whichever is earlier.

The Principle and interest is to be repaid in 5-7 years after commencement of repayment. 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.

8. POST SANCTION FOLLOW UP Branches to contact college / university authorities to send the progress report at regular intervals in respect of students who have availed loans.

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9.UPFRONT FEE

NIL

For Study abroad - @ 0.50% with a maximum of Rs. 5000/-(refundable on availment of the loan amount)

10. TIME NORMS Loan applications have to be disposed of within a period of 15 days to one month but not exceeding the time norm stipulated for disposing of loan applications under Priority Sector Lending.

11. CAPABILITY CERTIFICATE Since, some of the foreign universities require the students to submit a certificate from their bankers about the sponsors solvency / financial capability, with a view to ensure that the sponsors of the students going abroad for higher studies are capable of meeting the expenses till completion of studies, capability certificate may be issued in such cases. For this financial and other supporting documents may be obtained from the applicant.

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12. LOAN APPLICATION Form No. PNB 813.

13.MODE OF APPLICATION OF INTEREST Interest on Education Loan accounts shall be worked out at the end of each month and recorded on a separate sheet in the ledger but not debited to the borrower’s account. Instead, it should be debited to a separate account opened in the Subsidiary General ledger titled ‘Interest Accrued on Advances under Education Loan Scheme’ forming one of the components of the main head of General Ledger. ‘Interest Accrued on Advances’ and credited to Revenue Head Income ‘Interest on term loan’ till the commencement of repayment of first instalment. On the date fixed for commencement of repayment, the whole amount of interest so far worked out and recorded as above should be debited to the borrower’s account by corresponding credit to the ‘Interest Accrued on Advances under Education Loan Scheme’. Repayment of loan and interest may be determined keeping in view the above procedure for charging of interest.

14. CONFIDENTIAL REPORTS

On Borrower(s): No confidential report on the borrower will be required as the application for loan will indicate the information required to be furnished in the confidential report. On Guarantor(s) / Co-obligants : Form No. PNB 905 /282(C).

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15. DOCUMENTATION UptoRs. 4 lacs

Rs.270/- + Service Tax & Education Cess

Above Rs.4 lacs

Rs.450/- + Service Tax & Education Cess

16. DISBURSEMENT Education loan is to be disbursed in the form of term loan. A limit upto which advance is to be allowed during each year will be set up. Each time the borrowing scholar is in need of funds to pursue his studies; he will approach the lending office and will explain his needs to the Incumbents. Incharge will permit drawing on the borrower’s account within the limit fixed. This will also enable the Incumbent In charge to remain in close touch with the borrowing students’s activities. · 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. · LOAN TO BE SANCTIONED BY THE BRANCH NEAREST TO THE PLACE OF DOMICILE OF THE STUDENT.

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In case of , purchase of stationary and books, loan may be disbursed in cash on declaration by the applicant and production of bills. 18. CLASSIFICATION Advances allowed under the Scheme will be classified under Priority Sector.

19. Additional Benefits provided to the students by PNB

A rebate of 0.50% in rate of interest permitted to women beneficiaries for loans up to Rs. 10 lac for studies in India and Rs 20 lac for studies abroad for existing as well as new girl student borrowerswef. 08.03.2009.

1% interest concession may be provided for loans if the interest is serviced during the study period/moratorium period.

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

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19. CHECK LIST To facilitate expeditious disposal of applications, a check-list regarding documents, security etc. alongwith application forms for Education Loans be provided to intending borrowers. An illustrative check-list enabling a ready reference, so that intending borrowers can furnish all related documents / papers in one lot, is given below :- ·

o Loan application on Bank's format.

o Passport size photograph

o Proof of Address(Permanent) / ID Proof.

o Proof of Age.

o Proof of having secured pass marks in last qualifying examination.

o Letter of admission in professional, technical or vocational courses.

o Prospectus of the course wherein charges like Admission Fee, Examination

Fee, Hostel Charges etc. are mentioned.

o Details of Assets & Liabilities of parents.

o In case loan amount is above Rs.4.00 lacs :

o Detail of Assets & Liabilities of parents/co-obligants/ guarantors.

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o In case loan is to be collaterally secured by mortgage of IP, Copy of Title

Deed, Valuation Certificate and Non Encumbrance Certificate from approved Lawyer of the Bank to be obtained at the cost of the borrower.

o Photocopy of Passport & Visa, in case of study abroad.

Any other document/information, depending upon the case and purpose of the loan.

21. OTHER CONDITIONS Zonal Managers and above may consider relaxation with regard to Eligibility, Margin and Security norms on merits of each case. No Due Certificate need not be insisted upon as a pre-condition for considering educational loan. However, Branches may obtain a declaration / an affidavit confirming that no loans are availed from banks.

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STATE BANK OF INDIA (SBI) EDUCATION LOAN SCHEAMES

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SBI EDUCATION LOAN A term loan granted to Indian Nationals for pursuing higher education in India or abroad where admission has been secured. SBI offers education loan for eligible courses , graduation courses , PG courses , Professional courses approved by UGC/Government / AICTE etc. Interest rate , documents required , expenses considered for loan and repayments option of education loan . 1. ELIGIBLE COURSES

All courses having employment prospects are eligible.

Graduation courses/ Post graduation courses/ Professional courses

Other courses approved by UGC/Government/AICTE etc.

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2. EXPENSES CONSIDERED FOR LOAN

Fees payable to college/school/hostel

Examination/Library/Laboratory fees

Purchase of Books/Equipment/Instruments/Uniforms

Caution Deposit/Building Fund/Refundable Deposit (maximum 10% of tuition fess for the entire course )

Travel Expenses/Passage money for studies abroad

Purchase of computers considered necessary for completion of course

Cost of a Two-wheeler uptoRs. 50,000/- Any other expenses required to complete the course like study tours, project work etc.

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3. AMOUNT OF LOAN

For studies in India, maximum Rs. 10 lacs

Studies abroad, maximum Rs. 20 lacs

4. INTEREST RATE

for loan upto 4 lacs - 0.50% below SBAR i.e 12.25% pa Floating

for loan above 4 lacs and uptoRs 7.50 lacs - 1.00 % above SBAR 13.75 % floating

for loan above RS 7.50 LACS - SBAR – 12.75% pa floating

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5. 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

6. REPAYMENT TENURE Repayment will commence one year after completion of course or 6 months after securing a job, whichever is earlier.

Place of Study Loan Amount Repayment Period

in Years Studies in India Rs. 10.0 lacs 5-7 Years

Studies Abroad Rs. 20.0 lacs 5-7 Years

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7. SECURITY

Amount For loans up to Rs. 10.00 lacs for Studies in India and up to Rs. 20.00 lacs for studies abroad

Up to Rs. 4 lacs No Security Above Rs. 4 lacs to Rs. 7.50 lacs Collateral security in the form of suitable

third party guarantee. The bank may, at its discretion, in exceptional cases, weive third party guarantee if satisfied with the net-worth/means of parent/s who would be executing the documents as "joint borrower".

Above Rs. 7.50 lacs. Tangible collateral security of suitable value, along with the assignment of

future income of the student for payment of installments.

All loans should be secured by parent(s)/guardian of the student

borrower . In case of married person , co obligation can be either

spouse or the parent(s) / parent in law .

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8. 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%

8. 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

Borrower's Bank account statement for the last six months

Income tax assessment order, of last 2 years

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Brief statement of assets and liabilities, of the Co-borrower

Proof of Income (i.e. Salary slips/ Form 16 etc) * Conditions Apply 9. Documents to be enclosed

Mark sheet of last qualifying examination for school and graduate studies in India.

Copies of letter conferring scholarship, freeship, studentship etc.

Documents evidencing the duration of course and commencement thereof viz. prospectus or certificate from the competent authority of the institution.

Proof of admission to the course.

Schedule of expenses for the course.

Two copies of passport size photograph of the borrower(s) / guarantor(s).

Statement of Bank account for the last six months of the borrower(s)

Signature identification from bankers of borrower(s) guarantor(s).

A copy of Passport/Voters ID Card/Proof of residence.

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EDUCATION LOAN SCHEME FOR STUDENTS OF ISB Loan amount : Upto 95% of all costs upto a maximum of Rs.14.50 lac. (Taking into account expenditure of married students and cost of a laptop, which is essential for students.) Margin : 5% Rate of Interest : 9% (Floating). EMI*: Rs.1287/-per lac.

8.5% (Floating), if tangible security equivalent to 50% of loan amount is furnished. EMI*: Rs.1260/- per lac.

Should a tangible collateral security equivalent to 50% of outstanding loan amount be furnished midway through the tenure of the loan, the concession of 50 basis points in the rate of interest shall become applicable from the month following the month in which such security is furnished.

Only Simple Interest will be charged during the course and moratorium period.

The rate of interest will not change during the complete tenure of the loan.

Interest is calculated on daily reducing

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balance.EMI of 9 years & 9 months Repayment : Up to 10 years. A customised repayment schedule taking into account individual repayment capacity of the student is permissible Moratorium Period : Up to 3 months after completion of course Co-borrower : Yes. The loan will be granted jointly with the parent/ guardian Security : Lien on the original Certificate and Marks Sheet of the student. The Certificate will remain in custody of SBI during the currency of the loan.

Third party guarantee (TPG), preferably of earning sibling of the student or a person known to the Bank i.e., a person who is our customer or he/she is a reputed person or a guarantor of one of our borrowers. Application Processing : Loans will be sanctioned and disbursed within three days, after submission of application form, complete in all respects except where mortgage of immovable property is to be created. Processing Fees/ Prepayment : NIL ChargesForeclosure Charges

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Takeover of Education Loan : Permissible from other Banks/ Financial Institutions for existing students and alumni Contact Branch : Hyderabad University Campus Branch, Gachibowli, Hyderabad- 500019 Telephone: 040-23011301/289 Fax: 040-23011617

For salaried persons

Latest salary slip showing all deductions.

Employment details for the last 5 years.

Latest TDS Certificate – Form 16.

Statement of assets and outstanding liabilities. For Self-Employed/Professionals and Businessmen

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Proof of income.

Income Tax/Wealth Tax (if applicable) assessment orders not more than 2 years old.

Assets and Liabilities.

If Collateral Security is Mortgage of Landed Property

Original Sale Deed

Original receipt of payment made for registrar

Society share certificate

Non encumbrance or certificate from advocate

Valuation Report

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HDFC EDUCATION LOAN SCHEAMES

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HDFC Education Loan

HDFC gives loans to students to partly meet their educational expenses / costs for pursuing specific higher educational courses at institutes approved by HDFC. With HDFC bank student education loans, pursue your dream higher studies without worrying for financial assistance. We provide student education loans for all Graduate, Post-Graduate, Engineering, Medical, MBA , Vocational Courses (Multi-Media, ERP) offered by recognized institutions in India. No more running from pillar to post for availing student loans! Our friendly sales managers will guide you in every step to make your dreams into reality.

Eligibility: Students enrolled with an approved Educational Institute and desirous of availing the education loan can make an application, with the earning parent / guardian being the co-applicant to the loan. Currently, new entrants and existing students of only select leading national educational institutions are eligible to apply for education loans. Please check with your nearest HDFC Office for the list of approved institutions.

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Maximum Loan:

Loans are given to students who are citizens of India. The student should have a consistently good academic record, and admission to an approved Educational Institute for pursuing a recognized course.

Loans can be availed upto a maximum of 90% of the total cost as determined by HDFC. The costs would generally cover expenses incurred towards the course fee, library charges, hostel and mess charges, cost of books and equipment.

HDFC lends upto a maximum of Rs. 2,00,000 on an Education Loan. The repayment period of the loan is determined on the merits of each case but would not exceed 5 years. The Rate of Interest (with Security) is 12.00% p.a and without security is 13.00% p.a. The repayment can be accelerated on completion of the course, considering the earning capacity of the student. HDFC's main concern is to help individuals comfortably repay the borrowed amount. Interest Rates are calculated on a monthly rest basis.

You repay the loan in Equated Monthly Instalments (EMIs) comprising principal and interest. EMIs commence three months after the completion of the course.

Pending commencement of EMI, you pay simple interest on the portion of the loan disbursed. This is payable every month from the date of each disbursement upto the date of commencement of EMI. This interest is called pre-EMI interest.

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Prepayment of the loan in full or parts is possible. In the event where the student plans to leave the country for any reason, the loan would generally be required to be repaid in full, however, the same would be considered on a case-to-case basis depending on the merits of each case and on such terms as may be required. The security for the loan would normally comprise personal guarantees and such other security acceptable to HDFC.

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Expenses does the loan cover

Fee Payable to College/School/Hostel

Exam/Library/Lab fees

Caution deposit / Refundable deposit asked by the institution/Building fund - supported by Institution bills/receipts

Purchase of Books/equipments/instrument/uniforms

Travel expenses/passage money for studies abroad

Purchase of computers - essential for completion of the course

Insurance

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

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Need of a co-applicant :

Study Abroad Study India

Course Graduation Graduation

Loan Type Term Loan Term Loan

Loan Purpose Loans are also provided for studying abroad for job oriented courses at degree level and advanced studies in all areas for post-graduation. For payment of fees to school/college and for purchase of books, hostel fees, examination fees, etc.

The Educational Loan Scheme outlined below aims at providing financial support from the bank to deserving/ meritorious students for pursuing higher education in India and abroad. The main emphasis is that every meritorious student is provided with an opportunity to pursue education with the financial support on affordable terms and conditions. No deserving student is denied an opportunity to pursue higher education for want of financial support

Loan Amount Min. - Rs 50000 Max. - Rs 2000000

Unsecured Lending Upto INR 7.5 Lakhs Student Loans UptoRs.

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15 Lakhs for education In India

Margin Money 15 % 5 %

Tenure Min. - 1 Yrs. Min. - 1 Yrs.

Interest Rate 14 % Interest rate: 14% Charges for late payment of EMI: @ 24 % p.a. on amount outstanding from date of default

Time to Process Loan 7 days 7 days

Exclusive Offer For Premier Institutes

HDFC Bank education loans pleased to offer student loans with special features for the students who have secured admission in Premier Institutes.

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Institute Category

Programme Special Features

Management Institutes

Post-Graduate Diploma In Management( Two-Year)

1. Unsecured Lending Upto 12 Lakhs- No Third Party Guarantee Or Collateral 2. Loan Tenure Upto 84 Months Including Moratorium

Management Institutes- ISB,IIM’S

Post-Graduate Programme In Management For Executives(One-Year)

1. Unsecured Lending Upto 15 Lakhs-No Third Party Guarantee Or Collateral Required. 2. Loans Above INR 15 Lakhs will be secured by adequate collateral. a. Residential Property b. HDFC Bank Fixed Deposit c. LIC/KVP/NSC 3. Loan Eligibility Based On Applicant Last Drawn Salary or Co-Applicant Income or combination of both. 4. Loan Tenure Upto 72 Months Including 15 Months of Moratorium. Important Document 1. Lien On Certificate and Transcripts.

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Fees & Charges for Educational Loan

Description of Charges Education Loan

Loan Processing Charges Upto a maximum 2% of the loan amount

Prepayment (upto 6 months of repayment )

No pre-payment permitted

Pre-payment charges (after 6 months of repayment)

Upto 4% of the Principal Outstanding

No Due Certificate / No Objection Certificate (NOC)

Nil

Solvency Certificate Not applicable

Charges for late payment of EMI @ 24 % p.a. on amount outstanding from date of default

Credit assessment charges Not applicable

Non standard repayment charges Not applicable

Cheque swapping charges UptoRs. 500/- per event

Loan Re-Booking / Re-Schedulement Charges

UptoRs. 1000/-

Bounce Cheque Charges UptoRs. 450/- per Bouncing

Legal / incidental charges At actual

Stamp Duty & other statutory charges

As per applicable laws of the state

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Quantum of the loan :

Studying in India - Max Rs. 15 Lakhs

Studying abroad - Max Rs. 20 Lakhs

Collateral for availing education loan:

For Loans Upto INR 7.5 Lakhs – NO – Nil Collateral nor Third-Party Guarantee For Loans Above INR 7.5 Lakhs- Yes, Any of the following wide range of collaterals Acceptable Collaterals

Residential Property .

HDFC Bank Fixed Deposit

LIC/NSC/KVP

Mode of repayment :

Customer has the option of paying through Standing instructions/ ECS/Post

datedcheques.

Tenure of the loan :

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Maximum tenure of the loan can be 7 years including moratarium period.

Moratorium period

Repayment holiday/ moratorium would be for the course period + 1 year or

6 months after the student gets a job/start earning whichever is earlier.

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Documentation

Category Applicant (Student)

Academic Institute Admission Letter with Fee break-up

SSC,HSC,GraduationMarksheets

KYC(Know Your Customer)

Age Proof

Signature Proof

Identity Proof

Residence Proof

Income Documents Salaried

Latest 2 Salary Slips carrying date of joining details

Latest 6 Months Bank Statement of the Salary Account.

Self Employed

Last 2 Year ITR with Computation of Income

Last 2 Years Audited Balance Sheet

Last 6 Months Bank Statement

Proof of Turnover (Latest Sales / Service Tax Return)

Self Employed - Professional

Last 2 Year ITR with Computation of Income

Last 2 Years Audited Balance Sheet / P& L

Last 6 Months Bank Statement

Proof of Qualification

Others Completed Application Form

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Latest Photograph (Signed Across)

If appointment letter does not mention Joining Details, then applicant has to submit appointment letter of the current employer. Proof of continuity from previous employer is required if co-applicant is in current job for less than 1 year at the time of loan application

Documentation ( Post Sanction )

Is there any documentation required post the sanction of the loan ?

Category Applicant ( Student )

Loan Agreement Completed Loan Agreement to be Signed by Applicant and Co-applicant *

Repayment Instructions

PDCs / ECS or SI Mandate

3 Security PDCs in case of ECS and SI mode of repayment

* Stamp duty to be paid by the customer as per the relevant state laws.

E-mail this page

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FINDINGS

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FINDINGS SI Parameter NO

Private Banks Public Banks

1BeneficiariesEconomically affluent Economically weaker

sections of society. Sections also. 2 ObjectiveCommercialNational and social 3 Aimed atProfit earningNot profit alone 4 Margin moneyMustFlexible 5 SecurityNecessaryLess important 6 Interest rateHighReasonable 7AttitudeRigid and strictFlexible and liberal

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Sl. No

Basis of Difference

PNB SBI HDFC

1 Max. loan for studies in India

Rs. 10.00 Lacs Rs. 10.00 Lacs

Min. Rs. 50,000 to a Max. ofRs. 20,00,000

2 Max. loan for studies in Abroad

Rs. 20.00 Lacs Rs. 20.00 Lacs

Rs. 20.00 Lacs

3 Interest Rates Upto Rs.4.00 lacs BPLR-1 + TP Above Rs.4.00 lacs BPLR -0.25% + TP

UptoRs. 4 lakh 11.25% p.a. Above Rs. 4 lakh 12.75% p.a.

Interest rate: 14% Charges for late payment of EMI: @ 24 % p.a. on amount outstanding from date of default

4 Repayment Period starts From

one year after completion of course or 6 months after securing a job, whichever is earlier

one year after completion of course or 6 months after securing a job, whichever is earlier

one year after completion of course or 6 months after securing a job, whichever is earlier

5 Repayment Period

To be repaid in 5-7 years after commencement of repayment

In India : Up to Rs. 7.5 lacs - 5-7 years Above Rs. 7.5 lacs -5-

.Loan available upto tenure of 7 years including moratorium

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10 years In Abroad : Up to Rs. 15 lacs – 5-7 years Above Rs. 15 lacs – 5- 10 years

period

6 Margin UptoRs. 4.00 lacs : Nil Above Rs. 4.00 lacs: Studies in India 5% Studies in Abroad 15

UptoRs. 4.00 lacs : Nil Above Rs. 4.00 lacs: Studies in India 5% Studies in Abroad 15%

margin money ranging from 5-15 % of the total loan amount applied for courses in India & Abroad .

7 Security UptoRs. 4.00 lacs : No Security Above Rs. 4.00 lacs : Collateral Security of Suitable value (equivalent to 100% of the amount of loan) or co-obligation of parents / guardian / third party.

UptoRs. 4.00 lacs : No Security Above Rs. 4.00 lacs to Rs. 7.50 lacs : Third Party Guarantee Above Rs. 7.50 lacs to Rs. 10 lacs(India) : Tangible Collateral security for full value of loan Above Rs. 7.50 lacs to Rs. 15

N/A

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lacs(Abroad) : Tangible Collateral security of suitable value of loan or third party guarantee Rs 15 lacs to Rs. 20 lacs (Abroad) : Tangible Collateral security for full value of loan

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CONCLUSION

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Conclusion

On the basis of above findings and comparison among PNB, SBI and HDFC it is clearly observe that public banks have more reach, variety and flexibility in their education loan schemes whereas private banks uses some new concepts in their offerings like tailor made repayment system. 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. 15-25lacs by public banks and in the case of private banks, they provide minimum Rs. 50,000 to a maximum of Rs. 20,00,000 lacs. Interest rates are vary from 9.5% to 11.5% p.a and PNB uses BPLR 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 and it is 4-7 years on the basis of unsecured and secured education loan taken from private banks.

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Margin is same in PNB and SBI i.e. UptoRs. 4.00 lacs: Nil Above Rs. 4.00 lacs: Studies in India 5% Studies in Abroad 15% PNB and SBI do not charge any processing fees but SBI takes Deposit of Rs. 5000/- for education loan for studies abroad which will be adjusted in the margin money.

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RECOMMENDATIONS

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RECOMMENDATIONS

Banks should go for advertisement Campaign from Scratch.

Banks should try to cash its brand image.

Strong branch network should be made and staff personnel’s 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 Suitablefor medium income group customer.

Presence of some famous personality in Advertisement or in Pamphlet’s 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.

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APPENDIX

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FOR PNB : (To be taken in case where the student is Minor)

ANNEXURE I AGREEMENT FOR EDUCATION LOAN This Agreement is made at_____________onthis_______day of _____20 __ between Shri / Smt ____________________________, son / wife of Shri _________ _________ r/o ________ ________ ______ (hereinafter referred to as ‘parent / guardian’) Sh./ Kumari _____________________ minor aged ________ years (date of birth_________), S/o / D/o Sh./ Smt. ____________________ r/o ______________________________ (hereinafter referred to as ‘student’), represented by his / her natural / court guardian Sh./ Smt. ____________________ (both parent / guardian and student are collectively called the ‘borrowers’ which expression shall unless repugnant to context include his / her heirs, executors, administrators and assigns) of the One Part and Punjab National Bank a body corporate constituted under the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970 having its head office at 7, BhikhajiCama Place, New Delhi and amongst other a branch office at _______ _______ ______ ______ (hereinafter called the ‘bank’ which term shall unless repugnant to context include its successors and assigns) of the Other Part. WHEREAS

A) Sh. / Smt ___________________ (parent / guardian) represents that his/ her ward Sh. / Kumari _________________(hereinafter called

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the student) is desirous of pursuing / continuing his / her studies at ______________________ for a period of __________ but is unable to do so due to paucity of funds. AND

B) The Borrowers have, with a view to receiving the financial assistance for studies of his/her ward, applied to the bank for a loan of Rs. ____________(rupees_____________________) which the bank has agreed to grant on terms and conditions herein arter appearing.

NOW THIS AGREEMENT WITNESSETH AS UNDER 1. The total amount of the loan amounting to Rs. __________ will be

disbursedby the bank to the borrowers as under :- State the manner of disbursement

2. The amount of loan will be utilized by the borrowers only for the purpose ofpersecuting studies of the ‘student’ , such as payment of fees payable to college / school/ hostel, examination / library laboratory fee , purchase of books / equipment / instruments / uniform caution deposit / building fund /refundable deposit / supported by the institution bills / receipts, travel

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expenses / passage money for studies abroad, purchase of computersessentialfor completion of the course any other expenses required to complete the course- like study tour project work, thesis etc. 3. At the end of each academic year, borrowers will produce a certificate from the head of the institution at which the student is studying testifying the results achieved by the student during and at the end of the year as well as about his conduct. If the said certificate is not produced or the certificate furnished for any year is not considered satisfactory the Bank will (in its absolute discretion) have the right of stop giving any further financial assistance to the borrower in terms of this agreement notwithstanding the fact that the total amount of the loan as agreed to in paragraph above has not been disbursed to him. The Bank will be entitled as its option to recall the loan already , give together with the interested accrued thereon, by a demand in writing. Applicable in case loan is above Rs. 4.00 lac 4. The borrowers will secure the loan by providing a suitable surety an unlesshe has furnished the same he will not avail the loan or any part thereof. 5. The interest on the loan will be payable at the BPLR rate /_____% over the BPLR with ________rest. Provided that the interest payable by the borrowers shall be subject to change in interest rates made by RBI / Bank from time to time.(BPLR means Benchmark Prime Lending Rate of the bank prescribe by the bank form time to time. The BPLR as on date is ______% p.a.) In the event of there not being any BPLR, the borrower agrees to pay interest at the rate as prescribed by the bank. 6. Subject to what is provided in para 3 above, the borrowers will repay the loan together with interest accrued thereon by equal monthly installments in _______ year after commencement of the repayment i.e. one year after the

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course period or 6 months after getting job, whichever is earlier. The extension of the repayment period, if the student is not able to complete the course for reasons beyond his/her control, will be in the absolute discretion of the Bank. 7. In the event of death of any of the borrowers, the bank shall be entitled not only not to disburse further loan but also recall the outstanding under the loan already disbursed, irrespective of the instalments fixed. 8. The borrowers will, during the period of their indebtedness to the bank, keep the Bank informed of the change in their address, vocation and income from time to time. 9. The student-borrower under takes to remit and if need be, give instructions / authorization to his / her employer to remit, the salary to the extent necessary or even more , if the borrower so desires , to the account of the borrower. In witness whereof the parties to these presents have set their hands on the day, month and year first mentioned above. __________________________ BORROWERS FOR PUNJAB NATIONAL BANK (Authorized signatory) (To be taken in case where the student is Major)

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ANNEXURE II AGREEMENT FOR EDUCATION LOAN This Agreement is made at_____________onthis_______day of _____20 __ betweenShri / Smt / Km. ____________________________, son / daughter of Shri _________ ______ ___ r/o ________ ________ ______ (hereinafter referred to as‘student’) andSh. / Smt. _____________________ son / daughter of____________________ r/o______________________________ (hereinafter referred to as ‘parent’), (parent andstudent collectively hereinafter called the ‘borrowers’ which expression shall unless repugnant to context include their heirs, executors, administrators and assigns) of theOne Part and Punjab National Bank a body corporate constituted under the BankingCompanies (Acquisition & Transfer of Undertakings) Act, 1970 having its head officeat 7, BhikhajiCama Place, New Delhi and amongst other a branch office at ______________ ______ ______ (hereinafter called the ‘bank’ which term shall unlessrepugnant to context include its successors and assigns) of the Other Part. WHEREAS A) The Student and Parent (Borrowers) represents that Sh. / Kumari _________________(student) is desirous of pursuing / continuing his / her studies at ______________________ for a period of __________ but is unable to do so due to paucity of funds. AND

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B) The Borrowers have, with a view to receiving the financial assistance for his/her studied, applied to the bank for a loan of Rs. ____________(rupees_____________________) which the bank has agreed to grant on terms and conditions herein arter appearing:

NOW THIS AGREEMENT WITNESSETH AS UNDER The total amount of the loan amounting to Rs. __________ will be disbursed by the bank to the borrowers as under :- State the manner of disbursement 2. The amount of loan will be utilized by the borrowers only for the purpose of persecuting studies of the ‘student’ , such as payment of fees payable to college / school/ hostel, examination / library laboratory fee , purchase of books / equipment / instruments / uniform caution deposit / building fund /refundable deposit / supported by the institution bills / receipts, travel expenses / passage money for studies abroad, purchase of computers-essential for completion of the course any other expenses required to complete the course- like study tour project work, thesis etc. 3. At the end of each academic year, borrowers will produce a certificate from the head of the institution at which the student is studying testifying the results achieved by the student during and at the end of the year as well as about his conduct. If the said certificate is not produced or the certificate furnished for any year is not considered satisfactory the Bank will (in its absolute discretion) have the right of stop giving any further financial assistance to the borrower in terms of this agreement notwithstanding the fact that the total amount of the loan as agreed to in paragraph above has not been disbursed to him. The Bank will be entitled as its option to recall the loan already , give together with the interested accrued thereon, by a demand in writing. Applicable in case loan is above Rs. 4.00 lac

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4. The borrowers will secure the loan by providing a suitable surety an unless he has furnished the same he will not avail the loan or any part thereof. 5. The interest on the loan will be payable at the BPLR rate /_____% over the BPLR with ________rest. Provided that the interest payable by the borrowers shall be subject to change in interest rates made by RBI / Bank from time to time. (BPLR means Benchmark Prime Lending Rate of the bank prescribe by the bank form time to time. The BPLR as on date is ______% p.a.) In the event of there not being any BPLR, the borrower agrees to pay interest at the rate as prescribed by the bank. 6. Subject to what is provided in para 3 above, the borrowers will repay the loan together with interest accrued thereon by equal monthly installments in _______ year after commencement of the repayment i.e. one year after the course period or 6 months after getting job, whichever is earlier. The extension of the repayment period, if the student is not able to complete the course for reasons beyond his/her control, will be in the absolute discretion of the Bank. 7. In the event of death of any of the borrowers, the bank shall be entitled not only not to disburse further loan but also recall the outstanding under the loan already disbursed, irrespective of the installments fixed. 8. The borrowers will, during the period of their indebtedness to the bank, keep the Bank informed of the change in their address, vocation and income from time to time.

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In witness whereof the parties to these presents have set their hands on the day, month and year first mentioned above. For self and as natural guardian/ guardian of Sh./ Kumari__________________________ BORROWERS FOR PUNJAB NATIONAL BANK (Authorized signatory) ANNEXURE-III Date:_____________________ The Manager, Punjab National Bank, BO:___________________ Reg : My Education Loan For Rs._______ I write to confirm that you were pleased to grant Education Loan of Rs.____________ to me, represented by my guardian, Shri / Smt. _________________ for my education. My said guardian executed the required loaning documents in your favour in consideration of the said loan. I inform you that I have attained majority on ______________ and request you to disburse the remaining amount loan of Rs. _______________ to me out of the loan agreed to be granted by you. I am already and willing to execute any further documents in your favour for the said loan, if so required by you. I also confirm that the amount of loan of Rs. ___________ already disbursed to my benefit and the same is binding on me and I agree to repay the same with interest as agreed.

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I further undertake that I will repay the loan amount granted by the bank for my education, in terms of the agreement dated _______________ as executed by Shri / Smt. ______________________, my parents / guardian representing me , interalia from out of my future income and if need be , I will give instructions / authorization to my employer to remit the salary to the extent necessary or even more. I will keep the bank informed of my address and my profession / employment from time to time. Yours Faithfully ____________________ (Borrower) Address:-_______________________

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BIBILIOGRAPHY

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BIBILIOGRAPHY Books:- Indian Financial System and Commercial Banking , by IIBF mumbai (page no. 259)

Management of Indian Financial - R.L.Gupta

Websites:- www.pnbindia.com www.statebankofindia.com www.hsbc.com