Download - A Dissertation Report On
ADISSERTATION REPORT
ON
“COMPARATIVE STUDY OF EDUCATION LOAN WITH REFERENCE TO SBI,PNB AND HSBC”
SUBMITTED BY:
SAURABH SHUKLA SEMESTER: MBA IVth
ENROLLMENT NUMBER: 040387008219
INSTITUTE OF TECHNOLOGY AND SCIENCEMOHAN NAGAR GHAZIABAD 201007
U.P
BATCH (2004-2006)
Declaration by the Candidate
I SAURABH SHUKLA student of MBA IV of Institute of Technology &
Science (I.T.S), Ghaziabad (2004-06) bearing enrollment number
040387008219 hereby declare that the research project report titled
COMPARATIVE STUDY OF EDUCATION LOAN WITH REFERENCE
TO STATE BANK OF INDIA (SBI), PUNJAB NATIONAL BANK (PNB)
AND HSBC.
Is the outcome of my own work and same has not been submitted to any
university/ institutions for the award of any degree or any professional diploma.
Date: ( )
Sign of candidate
ACKNOWLEDGEMENT
It has been a great learning experience on this project entitled “Comparative
Study Of Education Loan With Reference TO SBI, PNB, And HSBC”.
I would like to thank Prof. Girish Jain for imparting knowledge and guidance to
me in the field of Finance.
I would like to thanks Prof. Asif Haleem for his able guidance and support
through out my project completion.
Table of Content
1. Introduction of Education Loan
2. Research Methodology
3. PNB Education Loan Scheme
4. SBI Education Loan Scheme
5. HSBC Education Loan Scheme
6. Findings
7. Conclusion
8. Recommendations
9. Appendix
10. Bibliography
INTRODUCTION
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.
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 want
to 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 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.
RESEARCH METHODOLOGY
RESEARCH METHODOLOGY
PROJECT TITLE: “Comparative Study of Education Loan with
Reference to PNB, SBI and HSBC”.
To compare education loan schemes & policies of the Punjab National Bank (PNB),
State Bank of India (SBI) and Hong-Kong Shanghai Banking Corporation (HSBC)
METHODOLOGY :
In this research I have adopt the Exploratory Research method only for PNB, SBI
and HSBC Education loan schemes for just compare the offer document of these three
banks.
DATA SOURSE:
Primary data is taken from various internal documents and circulars issued by the
banks from time to time and Secondary data is taken from different books and
financial information published in newspapers and from the banks websites and other
related websites.
SCOPE:
Research scope is only three banks and these three banks are State Bank of India
(SBI), Punjab National Bank (PNB),and Hong-Kong Shanghai Banking Corporation
(HSBC).
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.
PUNJAB NATIONAL
BANK (PNB)
EDUCATION LOAN
SCHEAMES
“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.
• 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.
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.
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. 7.50 lacs.
• Studies abroad - Maximum Rs. 15.00 lacs.
4. MARGIN
Upto Rs. 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.
5. SECURITY
No Security may be insisted upon for loans upto Rs. 4.00 lacs. 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., :-
Upto Rs. 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.
In addition to above assignment of future income of the student for payment
of instalments (stands included in the Agreement).
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.
6. RATE OF INTEREST
Upto Rs.4.00 lacs PTLR
Above Rs.4.00 lacs PTLR + 1%
• The interest to be debited monthly on simple basis during the Repayment
holiday / Moratorium period.
• Penal interest @ 2% be charged for above Rs. 2.00 lacs for the overdue
amount and overdue period.
7. LONING POWERS
As per loaning Power Chart in force from time to time .
• No application for educational loan received should be rejected without
the concurrence of the next higher authority.
8. REPAYMENT
-
The loan 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
Repayment Holiday / Moratorium Course period + 1 year OR 6 months
after getting job, whichever is earlier.
completion of course may be permitted for a maximum period of 2 years. If the
student is not able to complete the course for reasons beyond his control, sanctioning
authority may at his discretion consider such extensions as may be deemed necessary
to complete the course.
• The accrued interest during the repayment holiday period to be added to
the principal and repayment in Equated Monthly Instalments (EMI) be fixed.
• 1% Interest concession may be provided by Incumbents to lonees if the
interest is serviced by them during the study period when repayment holiday
is specified for interest / repayment under the Scheme.
Interest concession is to be provided to borrowers only at the time of final
repayment of the loan.
9. 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.
10. UPFRONT FEE
NIL
11. 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.
12. 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.
13. LOAN APPLICATION
Form No. PNB 813.
14. 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.
15. 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).
16. DOCUMENTATION
i) Agreement (Annexure -1) duly stamped, to be taken in case where the
student is minor. Further, in case of Minor student, on attaining his/her
majority confirmation from student be obtained as per Annexure III.
ii) Agreement (Annexure –II) duly stamped , to be taken in case where the
student is Major.
iii) Letter of Guarantee (PNB 785) duly stamped as an Agreement to be
taken in case of loan amount is above Rs. 4 lacs.
iv) In case of collateral security is to be taken is mortgage, procedure given
in Book of Instruction on Loans to be followed.
The documents should be executed by the student and parent / guardian.
17. 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.
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. 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 :-
• Loan application on Bank’s format.
• Passport size photograph.
• Proof of Address.
• Proof of having secured pass marks in last qualifying examination.
• Letter of admission in professional, technical or vocational courses.
• Prospectus of the course wherein charges like Admission Fee, Examination
Fee, Hostel Charges etc. are mentioned.
• Details of Assets & Liabilities of parents.
• In case loan amount is above Rs. 4.00 lacs :
Particulars of Guarantors and details of their Assets & Liabilities.
If immovable property offered as Collateral Security – copy of Title
Deed, Valuation Certificate and Non-encumberance Certificate from
approved Lawyer of the Bank.
• Photocopy of Passport & Visa, in case of study abroad.
• Any other document / information, depending upon the case and purpose
of the loan.
20. POST SANCTION SUPERVISION
The Bank will reserve the right of giving loan under this Scheme to any scholar or
continue / discontinue the yearly disbursement to a borrower under the Scheme,
depending upon whether or not he / she shows good results at the institution he
/she has joined for studies and whether of not reports about his / her conduct are
satisfactory.
Such reports will be required to be produced to the Incumbents Incharge of the
lending office before the start of each academic year subsequent to the first year.
Loan pass book (PNB589) be issued to the borrower containing details such as date
of sanction of loan, amount of loan, amount of loan sanctioned, subsidy received
(if any) rate of interest, amount due under each instalment, due date of instalment
etc.
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.
STATE BANK OF
INDIA (SBI)
EDUCATION LOAN
SCHEAMES
SBI EDUCATION LOAN
A term loan granted to Indian Nationals for pursuing higher education in India or
abroad where admission has been secured.
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.
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
• Travel Expenses/Passage money for studies abroad
• Purchase of computers considered necessary for completion of course
• Cost of a Two-wheeler upto Rs. 50,000/-
Any other expenses required to complete the course like study tours, project work etc.
3. AMOUNT OF LOAN
• For studies in India, maximum Rs. 10 lacs
• Studies abroad, maximum Rs. 20 lacs
4. INTEREST RATE
For loans upto Rs. 4 lakh 10.50% p.a.
For loans above Rs. 4 lakh 11.50% p.a.
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 AmountRepayment Period
in Years
In IndiaUp to Rs. 7.5 lacs 5-7
Above Rs. 7.5 lacs 5-10
AbroadUp to Rs. 15 lacs 5-7
Above Rs. 15 lacs 5-10
Security
Amount Studies In India Studies AbroadUpto Rs. 4 lacs No Security No SecurityAbove Rs. 4 lacs to Rs. 7.50
lacsThird Party Guarantee Third Party Guarantee
Above Rs. 7.50 lacs to Rs. 10
lacs(India)/ Rs. 15
lacs(Abroad)
Tangible Collateral
security for full value
of loan
Tangible Collateral security of
suitable value of loan or third
party guarantee
Rs 15 lacs to Rs. 20 lacs ___Tangible Collateral security for
full value of loan
7. MARGIN
For loans up to Rs.4.0 lacs : No Margin
• For loans above Rs.4.0 lacs:
o Studies in India: 5%
o 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
• Brief statement of assets and liabilities, of the Co-borrower
• Proof of Income (i.e. Salary slips/ Form 16 etc)
* Conditions Apply
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
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 Time 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
ChargesForeclosure Charges
Nil.
Takeover of Education Loan
from other Banks/ Financial
Institutions for existing
students and alumni
Permissible
Contact Branch Hyderabad University Campus Branch,
Gachibowli, Hyderabad- 500019
Telephone: 040-23011301/289
Fax: 040-23011617
Documents to be enclosed
i. Mark sheet of last qualifying examination for school and graduate studies
in India.
ii. Copies of letter conferring scholarship, freeship, studentship etc.
iii. Documents evidencing the duration of course and commencement thereof
viz. prospectus or certificate from the competent authority of the
institution.
iv. Proof of admission to the course.
v. Schedule of expenses for the course.
vi. Two copies of passport size photograph of the borrower(s) / guarantor(s).
vii. Statement of Bank account for the last six months of the borrower(s)
viii. Signature identification from bankers of borrower(s) guarantor(s).
ix. A copy of Passport/Voters ID Card/Proof of residence.
For salaried persons
i. Latest salary slip showing all deductions.
ii. Employment details for the last 5 years.
iii. Latest TDS Certificate – Form 16.
iv. Statement of assets and outstanding liabilities.
For Self-Employed/Professionals and Businessmen
• 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
HSBCEDUCATION LOAN
SCHEAMES
FEATURES AND BENEFITS
Get financial flexibility with HSBC educational loans
LOAN AVAILABILITY
Educational loans are available for studies in India or abroad. Avail of loan
amounts ranging from a minimum of Rs. 50,000 to a maximum of Rs.
25,00,000*.
SMOOTH REPAYMENT
Our Equated Monthly Installments (EMIs) scheme allows for easy repayment
and saves you from hassles.
Flexibility
Our loans are tailor-made to your needs. Opt for tenures up to 4 years for
unsecured loans and 7 years for secured loans (against security of a residential
property / shares).
COMPREHENSIVE COVERAGE
Educational loan also covers expenses for boarding and lodging.
HSBC banking benefits
Take advantage of HSBC's banking benefits; let us help you open a Savings
account or avail of a debit card.
LOW INTEREST RATES
Bank offer you competitive interest rates on your educational loans. Bank also
give you the option of choosing between a fixed or floating rate of interest (the
floating rate option is available only in case of secured loans).
Special Relationship Discounts
You are also eligible for special discounts exclusively designed for HSBC
customers (of 6 months or more).
* Loans above Rs.500,000 are available against security of residential
property/shares. Loans to value ratio to be less than or equal to 50% of the
property valuation.
Loans available for study at select institutes, based on their accreditation.
The interest rate on your floating rate Home loan is linked to HSBC's Mortgage
Lending Rate (MLR) and any revision in the MLR would impact your interest
rate. The MLR is currently 9.5%.
Terms and conditions apply. All loans at the sole discretion of The Hongkong
and Shanghai Banking Corporation Limited, India. Loans available for
applicants and properties in and around the limits of cities where HSBC has
branches and is subject to change from time to time.
Please be advised that vide Finance (No.2) Act 2004, w.e.f. 10 Sep 2004, a
service tax of 10% + 2% education cess thereon will be applicable on our fees
and charges.
ELIGIBILITY
To qualify for an Educational Loan, the following criteria apply.
1 Applicant should be a resident Indian
2 Minimum net annual income of Rs 150,000 for secured loan and Rs
75,000 for unsecured loan
3 Student must have secured admission to a recognised college/university
in India or abroad*
* Loans available for study at select institutes, based on their accreditation
The interest rate on your floating rate Home loan is linked to HSBC's Mortgage
Lending Rate (MLR) and any revision in the MLR would impact your interest
rate. The MLR is currently 9.5%.
Terms and conditions apply. All loans at the sole discretion of The Hongkong
and Shanghai Banking Corporation Limited, India. Loans available for
applicants and properties in and around the limits of cities where HSBC has
branches.
Vide Finance (No.2) Act 2004, w.e.f. 10 Sep 2004, a service tax of 10% + 2%
education cess thereon will be applicable on our fees and charges.
FINDINGS
FINDINGS
Sl. Parameter Private Banks Public Banks
No.
1. Beneficiaries Economically affluent Economically weaker
sections of society. Sections also.
2. Objective Commercial National and social
3. Aimed at Profit earning Not profit alone
4. Margin money Must Flexible
5. Security Necessary Less important
6. Interest rate High Reasonable
7. Attitude Rigid and strict Flexible and liberal
Sl. No.
Basis of Difference
PNB SBI HSBC
1 Max. loan for studies in India
Rs. 7.50 Lacs Rs. 10.00 Lacs Min. Rs. 50,000 to a Max. of Rs. 25,00,000
2 Max. loan for studies in Abroad
Rs. 15.00 Lacs Rs. 20.00 Lacs Not Available
3 Interest Rates Upto Rs.4.00 lacsPTLR
Above Rs.4.00 lacsPTLR + 1%
Upto Rs. 4 lakh 10.50% p.a.Above Rs. 4 lakh 11.50% p.a.
9.5% p.a + 10% service tax + 2% education
cess4 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.
Not Available
5 Repayment Period
To be repaid in 5-7 years after commencement of repayment
In India : Up to Rs. 7.5 lacs - 5-7 yearsAbove Rs. 7.5 lacs -5-10 yearsIn Abroad : Up to Rs. 15 lacs – 5-7 yearsAbove Rs. 15 lacs – 5-10 years
up to 4 years for unsecured loans and 7 years for secured loans (against security of a residential property / shares).
6 Margin Upto Rs. 4.00 lacs: Nil
Above Rs. 4.00 lacs:Studies in India5%Studies in
Abroad 15%
Upto Rs. 4.00 lacs: Nil
Above Rs. 4.00 lacs:Studies in India5%Studies in
Abroad 15%
Not Available
7 Processing Fees No processing fee/upfront charges
No processing fee/upfront charges
Deposit of Rs. 5000/-for education loan for studies abroad which will be adjusted in the margin money
Not Available
8 Security Upto Rs. 4.00 lacs : No SecurityAbove 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.
Upto Rs. 4.00 lacs : No SecurityAbove 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 loanAbove Rs. 7.50 lacs to Rs. 15 lacs(Abroad) : Tangible Collateral security of suitable value of loan or third party guaranteeRs 15 lacs to Rs. 20 lacs (Abroad) : Tangible Collateral security for full value of loan
Not Available
CONCLUSION
Conclusion
On the basis of above findings and comparison among PNB, SBI and HSBC 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. 15-20 lacs by public banks and in the case of private banks,
they provide minimum Rs. 50,000 to a maximum of Rs. 25,00,000 lacs.
Interest rates are vary from 9.5% to 11.5% 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 and it is 4-7 years on the basis of
unsecured and secured education loan taken from private banks.
Margin is same in PNB and SBI i.e.
Upto Rs. 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
RECOMMENDATIONS
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 suitable
for 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.
APPENDIX
FOR PNB : (To be taken in case where the student is Minor)
ANNEXURE I
AGREEMENT FOR EDUCATION LOAN
This Agreement is made at_____________on this_______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, Bhikhaji Cama 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 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 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
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 PTLR rate /_____% over the
PTLR 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.
(PTLR means Prime Term Lending Rate of the bank prescribe by the
bank form time to time. The PTLR as on date is ______% p.a.)
In the event of there not being any PTLR, 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 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)
ANNEXURE II
AGREEMENT FOR EDUCATION LOAN
This Agreement is made at_____________on this_______day of _____20 __ between
Shri / Smt / Km. ____________________________, son / daughter of Shri _________
______ ___ r/o ________ ________ ______ (hereinafter referred to as ‘student’) and
Sh. / Smt. _____________________ son / daughter of____________________ r/o
______________________________ (hereinafter referred to as ‘parent’), (parent and
student collectively hereinafter called the ‘borrowers’ which expression shall unless
repugnant to context include their 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, Bhikhaji Cama 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) 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
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
1. 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
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 PTLR rate /_____% over the
PTLR 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.
(PTLR means Prime Term Lending Rate of the bank prescribe by the
bank form time to time. The PTLR as on date is ______% p.a.)
In the event of there not being any PTLR, 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.
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.
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:-_______________________
EDUCATIONAL LOAN APPLICATION FORM FOR HSBC
First Name
Middle Name
Last Name
Address
City
Telephone
Mobile
Date of Birth
Convenient time to contact you
Between and
Are you interested in a free session on overseas studies with an Educational Counsellor
Details of the Educational Institute you are planning to study at :
Name
Country
Are you an existing HSBC customer?
If yes, please provide us the Card No or Account No
Account No.
Credit Card No.
BIBILIOGRAPHY
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