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Thursday, November 8, 2012

Education loan: HRD Ministry sets deadline for banks to submit interest subsidy claims

Education loans taken by students belonging to the economically weaker sections on or after April 1, 2009, would do well to submit their parents’ income certificate from designated competent authorities to banks.

Else, they will lose the interest subsidy benefit they get on their education loans.

The reason: The Ministry of Human Resource Development (MoHRD) has set a deadline for banks to submit all pending interest subsidy claims pertaining to the period FY2010 and FY2011 to the nodal bank (Canara Bank) before November-end 2012.

For FY12, the claims have to be submitted between December 1 and end-December 2012.

The Indian Banks’ Association (IBA), in a circular to banks, said member-banks have to ensure that the interest subsidy claims are submitted within the aforementioned time slots. The MoHRD and the nodal bank will not entertain claims if not submitted within the stipulated period.

Eligible students can get the details of designated authorities from the branch they have taken the loan.

The students can complete the necessary formalities, including obtaining the certification in respect of annual family income, from the competent authority at the Block/Tehsil/District Level so that their accounts can be credited with the interest due on the loans.

The MoHRD had launched a scheme to provide full interest subsidy during the period of moratorium on educational loans for students belonging to economically weaker sections (annual parental family income from all sources of less than Rs 4.5 lakh) from scheduled banks under the Educational Loan Scheme of the IBA.

The loans are for pursuing of studies in professional/ technical streams from recognised institutions in India, subject to a loan ceiling of Rs 10 lakh. Under IBA’s updated model education loan scheme, even loans in excess of Rs 10 lakh qualify for interest subsidy.


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