MHRD finalizes scheme for interest subsidy for education loans June 24, 2010

New Delhi: The ministry of Human Resource Development (HRD) has finalized the modalities for the implementation of a new central scheme to provide full interest subsidy during the period of moratorium on educational loans for students belonging to economically weaker sections (with parental family income from all sources of less than Rs.4.5 lakh annually). The loans will be provided by scheduled banks under the Educational Loan Scheme of the Indian Banks' Association (IBA) for pursuing courses in professional or technical streams from recognized institutions in India. The modalities have been finalized in consultation with IBA. The scheme is effective for all IBA approved educational loans sanctioned in the form of eligible students' in respect of approval course of studies from the academic year 2009-10. "Under the scheme, proof of income is required to be certified by authorities to be designated by the state governments. Accordingly, the ministry has written to all Chief Secretaries of states and union territories to intimate the designated authority/authorities (at the district/sub-district/block etc. levels) to the District Level Consultative Committee (DLCC) so that banking authorities at the branch level where students would be approaching for availing the benefit of the scheme would be aware of the same," an official press release said. All scheduled member banks of the IBA have also been advised to take necessary action to adopt and implement the scheme so its benefits accrue to the eligible students. Canara Bank is the nodal bank, for the member banks of IBA, for claiming reimbursement of interests credited to student accounts. All eligible students who wish to avail of the benefits of the scheme are advised to approach the respective bank branch from where they availed of the education loan and complete the necessary formalities. These include obtaining the certification in respect of annual family income from the competent authority at the block, tehsil or district level, so that the individual student accounts can be credited with the interest due on the loan for the academic year 2009-10 onwards.