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MR. HORESHWAR DAS,M.Com,M. Phil

Associate Professor

Deptt. Of Accounting & Finance

C.K.B. Commerce College

Jorhat 785001, Assam

CERTIFICATE
This is to certify that the project entitled A study on
education loan provided by STATE BANK OF INDIA with special
reference to Namrup branch. Written and submitted by Miss
Preetileena Kattrayan , a student of B.Com 6 th semester of
C.K.B. Commerce College , specialization on Accounting &
Finance to the Dibrugarh University to words partial fulfilment
of requirement for Bachelor Degree in Commerce is a genuine
record of project work under my supervision. The project report
on a part of it has not been submitted to any other
Institution/University for any degree.

Countersigned By :
Signature By :

(Dr. P.C.BORAH)
(Mr. Horeshwar Das )

Principal

C.K.B. Commerce College

Jorhat
INTRODUCTION
With time higher education is becoming expensive and
unaffordable for the common people and specially for the
people living below the poverty line. It is a burning issue for the
people of the developing country like India for which they face
scatting problems to enrole their wards/sons & daughters in the
higher education institutions to shape the destiny of their
future life which leads to human resource development and
development of the country as a whole. To combat, education
loan is provided to students by several banks, and other alike
financial institutions. A student loan for education purpose is a
type of loan which is designed to help students pay for their
higher education in terms of associated fees such as tution,
books and supplies and living expenses. It differs from other
types of loan in that the interest rate is substantially lower and
the repayment schedule is deferred while the student is still in
the learning process. It also differs in many countries in the
strict laws regulating negotiating and bankruptcy. Since loans
cannot be claimed as a matter of right as it is a debt. Therefore,
the borrower is obliged to pay back or repay the under the
same at later period. Students loan for education purpose i, e
the education loans are classified as priority sector and are to
be encouraged. These loans are to be treated as investment for
future economic development and property. Most of the
developed and developing countries have student loans
schemes and India is not separate from those countries. In
India, the education loan scheme was originally started to help
meritorious student pursue higher education in technical and
professional courses. However, over the years, rules and
regulation got diluted and any student who got admission in a
course became eligible for a loan, irrespective of the marks or
the process employed in admission.

A. Education Loan: Why for?


To provide the much needed financial support to
deserving students for pursuing higher professional,
technical or general education in India and abroad, the
students loan is seem to be very essential now a days to
give right support at right time for ensuring success of
student. The loan would be provided to those students
who have obtained admission to carrier oriented courses
like medicine, engineering ,management and other
general educations , either at the graduate or at the post
graduate level. No deserving students should be stopped
to pursue their dreams due to lack of money because they
are the future of the nation.

B. The eligibility required :


Based on the following eligibility criteria, a student can
apply for the educational loan
1. Indian national of age between 16 to 35 years, pursuing
graduate/ post graduate degree and PG diplomas.
2. Confirmed admission in a college/universities
recognised by UGC/Govt./AICTE etc., such as
management, engineering , medicine, computer
science , architecture , hotels and hospitality ,
agriculture , fine arts and design , pure science/ BA /MA
/B.com /M.com ,some vocational training and technical
training courses such aviation and air- hostess training
are sometimes included too.
3. A collateral security for the loan amount of more than
rupees 7.5 lakh.
4. Mendatory requirement of co-applicant in form of
parent / guardian / spouse/ parent in-law for all full
time programmes.
C. Coverage of educational loan :
The educational loan covers 100 % college tution
fees payable, accommodation charges , exam and library
fees , books and equipment including computer , travelling
expenses abroad , other reasonable expenses required to
complete the courses.
D. The timeline :
The minimum time required to get an approval for
application in the bank to convey its decision to the
applicant is within 15 working days from the date of
receipt of the admission provided the application is
complete in all respects.
E. Quantum of finance and disbursement :
Normally the bank approved an amount of rupees
10 lakhs for studying in India and rupees 20 lakhs for
studying abroad but banks may consider lending higher
amount in special case at their discreation .

The student loan for educational purpose will


be disbursed in full or in suitable instalments taking into
account the requirement of funds and / or fee schedule as
assessed by the bank directly to the educational institutions or
vendor of books or equipment or instruments.

F. Margin money , moratorium period for repayment ,


security and tenure :
The margin money is nil for loan upto rupees 4
lakhs , 5% for study in India on loan above rupees 4 lakhs
and 15 % for study in abroad on loan above rupees 4
lakhs.
The moratorium period for repayment of loan is
the course period plus 1 year or 6 month after getting job ,
whichever is earlier.
The security for availing such loan are as
follows
Upto rupees 4 lakh no security , but in this case
parents needs to be a joint borrower.
Between 4-7.5 lakhs a long with parents collateral
security in form of third party guarantee.
Above 7.5 lakhs parents to be joint borrowers plus
tangible collateral security of suitable value
required.
Security for the loan is determined by the
quantum of amount required and the credit
worthiness of the principal borrower. Following types
of collateral are accepted :
i. Residential property (house/flat/apartment)
ii. Fixed deposit.
iii. Life insurance (sum assured being at least 100% of the
education loan amount).
iv. Non agricultural land.
Loan tenure upto rupees 7.5 lakh is normally upto
the level of 15 years and above respectively based on the
amount of loan.
G. Documents required:
The following documents are required to get the
opportunity of availing students loan for educational
purpose :
Letter of admission.
Detailed break up of the cost of the course.
Completed loan application formed and photographs.
KYC ( know your customer ) document.
Academic : mark sheets / pass certificate of S.S.C
,H.S.C ,degree courses.
PAN card of the student and parent / guardian.
AADHAR card of the student and parent / guardian.
Proof of the identity ( driving licence / pass port /
electricity bill/telephone bill ).
Student / co-borrower / guarantors bank account
statement for last 6 months .
IT return /IT assessment order , of previous 2 years of
parent /guardian / other co-borrower ( if IT payee ).
Brief statement of assets and liability of parent /
guardian / other co borrower .
Proof of income ( i, e salary slips /form 10 ) parent/
guardian /other co borrower ).
H. Interest rates :
Different bank have different bank interest
rates on the study loan. These interest rate is equivalent
to the addition of base rate and the mark up where the
base rate ranges between 9.5 lakhs to 10 %. The total
interest rate comes between 11.75 % and 14.75 %
depending on the bank, loan amount and the college
concern. Girls student may avail of slightly cheaper rates
by upto 0.50 % .
IMPORTANCE OF THE STUDY:
Since on the basis of present educational scenario ,
students educational loan in the developing country like India is
an inevitable requirement of the future generation of the
country. Therefore it is felt that the analysis of student
educational loan provided by SBI which occupies lion share of
the Indian banking system is necessary. It is also felt that the
analysis will help the needy student of our region / area .

OBJECTIVES OF THE STUDY:


The prime objective of present study is to

a) Look into the details of student educational loan provided


by the SBI of namrup branch .
b) Analyse the pros and cons of the educational loan
providers and its beneficiaries.
c) Put suggestions towards concluding marks based on the
basis of the study.

METHODOLOGY OF THE STUDY:


The methodology of the study is both descriptive and
analytical. Both primary and secondary data are collected. The
study covers latest 3 years from 2014 -15 to 2016 17 both
years inclusive. Data and information are collected from various
books , journals , magazines , periodical newspapers etc.
Discussions were also made with the senior officials of the SBI .
To make this study realistic and fruitful , a questioner was
drafted. Based on the data source and to get a general idea on
the subject matter the methodology for analysis using basic
statistical tools is considered here. These are percentages,
averages, standard deviation etc which can easily pin point the
most significant feature of the data source on the basis of
which general conclusion towards suggestive remarks can be
made possible.

*About SBI educational loan :

The State Bank of India (SBI ) is one of the top


education loan providers in India. Every year the bank
rents loan to the students who wants to get enrole in
various recognised universities and institutions in India
and abroad with no processing fee. The candidates who
take educational loan upto rupees 4 lakh or between
rupees 4 lakh and 7.5 lakh will get 10 years to repay the
amount . The repaymet period for the loan amount above
7.5 lakh is 20 years .

State bank of India is an Indian multinational


financial services company that was founded in 1921.State
bank of India has an operational presence of over 14,000
branches in India serving millions of happy customers. The
bank has a much diversified portfolio that includes services in
personal banking, business banking and international banking
services.

SBI education loan is of three categories-for


studies in India and abroad, for studies in premier Indian
institutions and loan for pursuing vocational education and
training.

Features of SBI education loan:

Purpose:

SBI student loan scheme is offered to Indian nations for


pursuing higher studies in India or at a foreign institution. SBI
scholar loan scheme is offered to students who have secured
admissions in premier Indian institutions. A separate loan
scheme is offered for pursuing vocational education training in
India.
Expenses considered for SBI education loan:

The following expenses are covered for both the student loan
scheme and loan for vocational education.

*.Tuition and course fee

*.Examination , library and laboratory fees

*.Caution deposit

*.Cost of books, equipment and other instruments.

The following expenses are considered only for the student loan
scheme and not for the vocational training loan.

*.Cost of two wheeler up to Rs.50,000

*.Travel expenses and passage money for abroad studies

*.Caution deposit, building fund and other refundable deposit


which amounts up to10% of the tuition fees for the entire
semester

*.Any other expenses required to complete the coursework like


study tours, thesis, project etc.

Amount of Education Loan:

*.SBI student loan scheme

A maximum of Rs.10 lakhs is offered for studies in India. For


studies abroad, a maximum of Rs. 30 lakhs is offered as loan.

*.SBI scholar loan scheme


Category
of the Maximum loan
educatio limit
nal
institutio
n

Without With security


security
List AA Rs.30 lakhs NA

List A Rs.20 lakhs Rs. 30 lakhs

List B Rs. 2o lakhs NA

List c Rs. 7.5 lakhs Rs. 30 lakhs

*.Loan scheme for vocational education and training

For courses of period up to 6 months loans up to Rs.


50,000 are provided. A maximum of Rs. 1 lakh is
provided as loan for courses of duration above 6
months.

INTEREST RATE :

*.SBI Student Loan Scheme

Loan Amount Rate of Interest

Up to Rs. 5 lakh 3.50% above base rate

Above Rs.4 lakhs and up 3.75% above base rate


to

Rs.7.5 lakhs
Above 1.75 % above base rate
Rs.7.50
lakhs
The base
rate is fixed at 9.85 %. Do make an enquiry with the bank about
the prevailing base rates. A concession of 0.50 % is provided
for girl students and a 1 % concession is offered for full tenure
of loan, if the interest is serviced promptly during moratorium
and course period.

*.SBI Scholar loan scheme


Type of institution Interest rate per
annum
List AA 25 bps above the base
rate(10.10% at For list B
present) institutions,
the interest
List A 25 bps above base
rate is 25
rate(10.10% at
bps if the
present)
collateral
List B For unsecured loan up security
to Rs.20 lakhs, 50 bps provided is
above base equal to or
rate(10.35% at greater
present) than the
loan
List C 175 bps above base
amount or
rate(11.60% at
if the
present)
applicants
work experience is greater than two years. Do contact the bank
for a comprehensive classification of the educational
institutions as per the type AA, A, B or C.

*.SBI Loan for vocational Education and Training

The rate of interest is fixed at 3.50% above the base rate of


9.85%

Processing Fee:

No processing fee is charged for SBI education loans.


Repayment Tenure:

*.SBI Student Loans


Maximum Loan Repayment
Amount Period
Up to Rs.4 Up to 10 years
lakhs

Above Rs.4 Up to 10 years


lakhs to up to
Rs.7.5 lakhs
Above Rs.7.5 Up to 12 years
lakhs

*.SBI Scholar Education Loan

The maximum repayment tenure is 12 years. The


repayment period starts after 6 months of course completion.

*.SBI Loan for Vocational Education and Training

For course of duration up to 1 year, the repayment period


can be up to 3 years. For course of duration above 1 year, the
repayment period can extend up to 5 years.

Security:

*.SBI student Education Loan

Loan amount Security

Up to Rs.4 lakhs Parent or guardian


as co-borrower

Above Rs.4 lakhs Parent or guardian


and to Rs.7.50 as co-borrower and
lakhs collateral security in
the form of a third
party guarantee

Above Rs.7.50 Parent or guardian


lakhs as co-borrower and
tangible collateral
security
*.SBI Scholar Loan Scheme

Tangible collateral security of full value is to be provided


and parent or guardian should sign up as co-borrower only to
avail extra loan amount for list A and list C institutions. Loans
can be availed without security also under the scholar scheme.

*.SBI Loan for Vocational Education and Training

No collateral or third party guarantee is taken. But,


parents or guardian will have to execute the loan documents as
co-borrower.

Margin:

For SBI student Loan Scheme, there is no margin for loans


up to Rs.4 lakhs. For loans above Rs.4 lakhs, the margin is 5%
for studies in India and 15% for studies abroad.

Eligible courses:

*SBI Student Education Loan

For studies in India, graduation and post graduation


technical courses(degree and diploma) conducted by colleges
approved by UGC, AICTE, IMC and the government of India are
covered. Also, teacher training, nursing courses and other
diploma courses like pilot training, shipping etc. as approved by
the concerned regulatory authority are covered under the loan.
For studies abroad, job-oriented professional graduate and
post-graduate courses like MCA, MBA, MS, courses conducted
by CIMA- London, CPA-USA are approved for loan.

*.SBI Scholar Loan Scheme

Regular full-time degree and diploma courses for which


the student is granted an admission through merit based
admission process or entrance test is covered under the loan.
Also, full time executive management courses like PGPX are
approved for loan.
*.SBI Vocational Education and Training Loan

Vocational courses and skill development courses of


duration 2 months to 3 years run by a government department
or an organisation supported by National Skill Development
corporation leading to a recognized Government organization
are approved for the loan.

List of Approved Educational Institutions:

*.For the SBI student scheme, educational institutions in


India recognized by UGC/AICTE/IMC and government of India
are approved. Reputed foreign institutions abroad, CIMA and
CPA courses are also approved for loan.

*.SBI scholar loan scheme is provided for education in 93


premier Indian institutions. Contact the bank for the list of
institutions that fall under the elite category.

*.Vocational, skill development courses offered by the


government or an organisation certified by the government is
approved for loan under the SBI Vocational Education and
training loan category.

Documentation required :

The following documents are to be submitted to complete


the application process.

*.Letter of admission

*.Duly filled and signed loan application form.

*.2 recent passport size photographs.

*.Statement of cost of study.

*.PAN card , AADHAR card of student and parent /


guardian.

*.Proof of identity and proof of residence.


*. IT returns or IT assessment order of previous 2 years
of the co- borrower

*. Statement of assets and liabilities of parent/guardian.

*. Proof of income of parent / guardian.

Eligibility :

The applicant should be an Indian national and should


have secured an admission in a recognized educational
institution. For SBI scholar schemes , the student should have
secured an admission in one of the 93 premier Indian
institutions. Similarly, for vocational education loan , the
student should have obtained an admission in a government
certified training institute.
CONCLUSION :

Based on the data analysis and findings obtained after


analysing the data following conclusions can be made

Though female beneficiaries in comparison to males is


more so far the case of availing loan opportunity is
concerned , still then it is observed that the refusal rate of
female is much more higher than the male to avail such
opportunity.
IN terms of averages and standard deviation of four
different categories it can be concluded that the data
variability is much more higher for females than the
males.
From the analysis of co-efficient of variation it is seen that
the data for female is more efficient , consistent and
reliable. Since , the co efficient of variation of female is
smaller than the co-efficient of variation of male.
After getting the approval student educational loan from
the SBI branch at the particular area it is seen that the
most females student do not opt for the same than the
male student even after getting a relaxation of 0.05 %
interest rate during reimbursement. This might be the
reason that female students in the last few years past
their intermediate level with high percentage than the
male students in the area for which their enhance of
getting educational scholarship given by different
agencies is higher than the male.

DATA ANALYSIS AND INTERPRETATION
The data source shown in the table below is considered for
analysis based on the methodology mentioned earlier.

TABLE NO: 1

Table showing details of student


educational loan
SEX NUMBER OF STUDENTS
Applied for To whom the Bank Who refuse to Beneficiaries
loan provided loan take the loan
opportunity

Male 21 15 4 11

Fema 39 35 11 24
le

TOTA 60 50 15 35
L

From the table 1 we see that the


percentage of male student applied for the education loan at
the aforementioned branch of SBI is 35 % and that of female is
65% . Accordingly the male female percentage rate to whom
the bank provide loan is 30% and 70 % respectively ; the
percentage of male refusal after getting the loan opportunity is
26.67 % and that of female is 73.33 %. Similarly the
percentage of male and female beneficiaries are 31.43 % and
68.57 % respectively.
The mean of male and female students for
the above categories are respectively 12.75 and 27.25. While
their standard deviations are 6.1796 for males and 10.8714 for
females. Co-efficient of variation for male and female
categories are 48.47 % and 39.90 % respectively.t
Preetileena Kattrayan , a student of B.com 6 th semester of
C.K.B. Commerce College , specialization on Accounting &
Finance to the Dibrugarh University to words partial fulfillment
of requirement for Bachelor Degree in Commerce a genuine
record of Project work under my supervision. The project report
on a part of it has not been submitted to any other
Institution/University for any degree.

Countersigned By :
Signature By :

(Dr. P.C. BORAH)


(Mr. Horeshwar Das)

Principal
C.K.B. Commerce College

Jorhat