Minutes of the meeting of the Working Group on Education Loan Scheme held on 31st January 2014 at Canara Bank, Bangaloru. In this minutes the working group has discussed the problems relating to the disbursement of interest subsidy.
Indian Banks’ Association
Minutes of the meeting
of the Working Group on
Educational Loan Scheme
held on 31st
January, 2014 at Canara Bank, Bengaluru
The Nodal Bank under the
Scheme viz. Canara Bank had convened a meeting of the Working Group on
Educational Loan Scheme on Friday, 31st January, 2014 at 10.00 a.m. at
Canara Bank, Head Office, Bengaluru to discuss the issues related to submission
of claims by Member Banks under the scheme.
The meeting was chaired by Mr. S S Bhat, General Manager, Canara Bank
and Mr. Sahdev Singh, Under Secretary, MoHRD, Govt. of India along
with the special invitee, the following were present:
1. Mr.
Sahdev Singh, Under Secretary, Ministry of HRD, Government of India
2. Mr.
S.S. Bhat, General Manager, PC & FI Wing, Canara Bank
3. Ms.
Prabhuta Vyas, Sr. Vice President, Indian Banks’ Association
4. Mr.
C S Vasantha Kumar, General Manager, Indian Overseas Bank
5. Mr.
M Balakrishnan, General Manager, Indian Bank
6. Mr.
K S Prabhakara Rao, Advisor, Financial Inclusion, Canara Bank
7. Mr.
S Ramesh, General Manager, RRB & LB wing, Canara Bank
8. Mr.
K R Basava, Dy. General Manager, State Bank of India
9. Mr.
Rakesh Luthra, Dy. General Manager, Punjab National Bank
10. Mr.
G Anantharam, Dy. General Manager, Syndicate Bank
11. Mr.
Narender Singh, Dy. General Manager, Central Bank of India
12. Mr.
M V Narasimha Rao, Dy. Zonal Manager, UCO Bank
13. Mr.
I C Amruth Kumar, Dy. General Manager, Union Bank of India
14. Mr.
A K Das, Dy. General Manager, PC&FI Wing, Canara Bank
15. Dr.
M Jayadev, Associate Professor, IIM, Bangalore
16. Dr.
D Geetha Rani, Associate Professor, NUEPA, Delhi
17. Mr.
K R Badrinath, Asst. General Manager, Canara Bank
18. Mr.
Purushotham, Manager, Canara Bank
19. Mr.
Sankar San, Manager, Canara Bank
20. Ms.
Juihathi, IIM, Bangalore
Mr. S.S. Bhat, General Manager welcomed all the
participants to the Working Group meeting on Central Sector Interest Subsidy
Scheme on Education Loans. He highlighted the following points in his opening
remark:-
·
There is lack
of awareness among some Branch Managers about CSIS Scheme which has led to lot
of complaints from the student community.
·
Interest
subsidy amount is credited to the accounts of SC Candidates in full and only a
partial amount is credited to the accounts of ST and other General
Candidates. This partial credit of
interest subsidy has led to complaints to Ministry of HRD, Indian Banks’
Association, the concerned Bank, Nodal Bank and
Education Loan Task Force.
Ministry of HRD to expedite settlement of claims.
·
FAQs can be
developed based on the analysis of the complaints and other issues that are
raised by the students, and the same can be placed in the CSIS Web Portal as
well as in the web site of the individual Banks.
·
Lot of queries
is coming under RTI. The applicants send
a copy of the same to the Ministry and the Nodal Bank and IBA. Queries to be sent directly to the concerned
Bank from the Ministry instead of sending it to Nodal Bank so that the
concerned Bank can send replies to the queries at the earliest possible time to
the applicants.
·
Issue of refund interest subsidy claims
of various Member Banks:
Ministry is very serious about this aspect. He requested all the Member Banks not to
give scope for refunds in future and ensure proper checks at the branch
level. Refund of claims is to be reduced
to the minimum extent.
·
With regard to
share of SC/ST and Minority Communities under CSIS Scheme on Education
Loans, utilization under these
categories is less and not upto the budgeted extent. Banks should pro-actively
propagate the Scheme among SC/ST and Minority Communities. There is an apprehension in the minds of
Ministry of HRD, Government of India that the EL applications of SC/ST and
Minority Communities are not considered sympathetically at branch level.
·
With regard to
the concern expressed by the Government on regional disparities,. he informed that 85% of the claims on
Education Loan Interest Subsidy are from Banks located in the Southern
Regions. In respect of Northern, Eastern
and Western Regions, the amount of interest subsidy is very less. On an analysis, it is observed that the
maximum claims of interest subsidy are in the States of Tamil Nadu and Kerala
followed by Karnataka and Andhra Pradesh.
Locality/ popularity of the Educational Institutions is one of the
reasons for the same. Of late, there has been some improvement in the growth
of Education Loans in the Northern and Eastern Regions also. Regional disparity has to be reduced to a
great extent.
Mr. Sahdev Singh, Under Secretary, Ministry of HRD,
in his opening remarks, stated that for funds to be released by Government of
India, the approval of the Parliament is required. With reference to the request of Nodal Bank
for release of funds to the extent of ₹ 2,500 crores for the claim pertaining to last financial
year and current financial year, Mr. Sahdev Singh informed that Ministry of HRD
will take up this matter with appropriate authority for sanction of the
estimated budget submitted by Nodal Bank.
Ms. Prabhuta Vyas, Senior Vice President, IBA suggested to take up the
issue with Ministry of Finance as Banks are facing lot of problems due to
release of funds in tranches.
Mr. S.S. Bhat, General Manager stated that the
estimate given by Nodal Bank under CSIS is in tune with the claims. He suggested that while finalizing the budget
for 2013-14 and 2014-15, the matter may be discussed with the Nodal Bank and
IBA for finalization of adequate funds.
Member Banks would also inform the required estimated claim amount under
the Scheme to the Nodal Bank to get a fair idea about the estimated
amount. He stated that the figure
relating to amount of claim provided by Nodal Bank is near to the actual claims
submitted by Member Banks.
Official from State Bank of India informed that the
request for Education Loans are on the rise in the State of Bihar and Jharkhand
in the recent past and hence, the demand for interest subsidy will be more in
the coming days. He requested Ministry
of HRD to see that the funds are provided / arranged in full according to the
estimate provided by the Nodal Bank. Mr.
Sahdev Singh assured that MoHRD will try to convince the Ministry of Finance in
this regard.
Ms. Prabhuta Vyas, Senior Vice President, IBA was of
the view that release of interest subsidy in different percentages to different
categories of students by Ministry of HRD is not proper and requested them to
release the funds in such a way that interest subsidy claims are settled in
full for all categories of students. By
doing so, complaints can be reduced to a great extent from the students under
CSIS.
With this, the following Agenda Items were taken up
for discussion.
Agenda Item 1: Opening
of the web portal for submission
for the period from
2009 to 2013
Mr. S. Ramesh, General Manager stated that many
Member Banks have requested for submission of pending claims pertaining to
earlier FYs 2009-10, 2010-11, 2011-12
and 2012-13 as many eligible students have complied with the condition of
submission of Income Certificate obtained from the designated Income
Certificate Issuing Authority. Nodal
Bank has already made a representation to Ministry of HRD during April 2012,
August 2013 and December 2013 to examine the above issue as the problem is
faced by all Member Banks.
However, Mr. Sahdev Singh has intimated that earlier in a
meeting held on 02.04.2012, it was decided that
“All pending claims pertaining to the period 1st
April, 2009 to 31st March, 2010 and 1st April, 2010 to
March 2011 may be submitted by banks to the Nodal Bank during the period 1st
April, 2012 to 30th June, 2012.
All pending claims pertaining to the period 1st
April, 2011 to 31st March, 2012 may be submitted by the banks to the
Nodal Bank during the period 1st April, 2012 to 30th
June, 2012. Supplementary claims, if
any, may be submitted by the banks during the period 1st October,
2012 to 30th November, 2012.”
Again in a meeting held on 10th October,
2012 it was decided that:
“All pending claims pertaining to the period 1st
April, 2009 to 31st March, 2010 and 1st April, 2010 to 31st
March, 2011 may be submitted by banks to the Nodal Bank during the period 1st
November, 2012 to 30th November, 2012.
All pending claims pertaining to the period 1st
April, 2011 to 31st March, 2012 may be submitted by the banks to the
Nodal Bank during the period 1st December, 2012 to 31st
December, 2012.”
Accordingly,
due to budget constraints, again it is not possible to allow to submit
the pending claims for FY 2009-10, 2010-11, 2011-12 and 2012-13 during FY
2013-14.
An official from Syndicate Bank suggested to open
the Window exclusively for the above purpose during November-December of this
year.
Ms. Prabhuta Vyas of IBA suggested that as the CSIS
was launched effective 1st April, 2009 and as the RRBs and
Co-operative Banks were since made aware of the scheme in 2012 only, hence it
is logical for MoHRD to consider claims received from RRBs and Co-operative
Banks with effect from 1st April, 2009. Also there are chances of left out claims by
the student borrowers because of non-submission of income proof certificate /
non issuance of proof by the State officials to students. The MoHRD is requested to permit as a One Time measure for banks to
submit all their pending claims from all
Scheduled Commercial Banks with a
pre-derived cut-off date to be decided by the Ministry of HRD.
This would definitely go a long way in generating
good will among the students community
and will encourage the cause of education of students belonging to economically
weaker section and will serve the Nation’s cause.
(Action: MoHRD)
Mr. A.K. Das, Deputy General Manager, Canara Bank
suggested to give advertisement and wide publicity providing an opportunity to
the students to prefer their claims pertaining to the earlier years and giving
a date as the deadline beyond which no claim will be entertained.
Ms. Prabhuta Vyas, Senior Vice President, IBA
suggested to Ministry of HRD, Government of India to give advertisement through DAVP mentioning the salient features
of the Scheme on behalf of all the Member Banks as the cost of advertisement
incurred by each individual Member Bank would be enormous if they take up the
above task on their own.
(Action: MoHRD)
Agenda Item II: Release of funds in tranches by Ministry
of HRD:
Ms. Prabhuta Vyas stated that students/parents are
coming with queries/complaints that while the Scheme itself is not
discriminating the eligibility criteria, why at the time of release of interest
subsidy, there is discrimination.
Moreover, Bank branches are
facing operational difficulties in this regard and hence this issue needs to be
resolved. She opined that Bank’s problems would be solved to a great extent if
the funds are released in equal proportions to all categories of students.
(Action: MoHRD)
Official from State Bank of India also agreed with
views of Ms. Prabhuta Vyas and informed that their branches are also facing
similar problems with regard to the above aspect.
Agenda Item III: Guidelines for refund of claims under CSIS
Scheme:
Mr. S. Ramesh, General Manager opined that refund of
claims under CSIS Scheme is one issue which is prevalent in almost all
Banks. He suggested Member Banks to
put in place a proper mechanism to submit the claims properly. He felt that this sort of problems are
creeping in due to manual intervention.
He stated that Nodal Bank is receiving lot of objections from Ministry
of HRD in this regard.
Mr. S. Ramesh requested Member Banks to advise the
branch officials to ensure that this type of instances is avoided to a maximum
extent.
(Action:All CSIS participating Banks)
Official from Syndicate Bank informed that letters
are being issued to the Branch Managers that they would be accountable for such
type of instances and any penalty imposed by the Ministry of HRD would be
recovered from them only.
Ms. Prabhuta Vyas, Senior Vice President, IBA
requested the Member Banks to make sure that Branch Managers are aware of the
Scheme. Many students are not aware
that they have to submit Income Certificates for availing interest subsidy
under the Scheme. Many students are of
the view that EL under CSIS Scheme is an interest free loan. Students should be made aware that they have
to pay interest first and then claim the interest subsidy from the branch by
submitting Income Certificate.
Mr. K.S. Prabhakara Rao, Advisor, Canara Bank
requested Member Banks to obtain Income Certificates from the students at the
time of sanction of Education Loans itself instead of calling for Income
Certificates at the time of submission of interest subsidy claims as it will
save lot of time to the Bankers.
Ms. Prabhuta Vyas suggested to put FAQs – Dos and Don’ts
for the student borrowers and for the Bank branches in the website of the Banks
which will be helpful for the Branch Managers as well as the student community.
Mr. Sahdev Singh opined that as per the analysis
made by the Nodal Bank (Canara Bank), the major reasons for refunds are on
account of-
·
non-submission of Income Certificates by the student borrowers,
·
Account not eligible for subsidy,
·
Excess claimed, Wrongly
included/erroneous claimed,
·
study abroad,
·
Non-compliance of scheme guidelines,
·
Disbursement prior to eligible period,
·
Income less than ₹ 4.5 lacs p.a.,
·
Subsidy claimed after moratorium period, Excess interest charged and
claimed,
·
Course completed,
·
Second loan,
·
Repayment already commenced,
·
Subsidy claimed for 2008-09 which
is not eligible,
·
Loan under Management Quota,
ineligible courses,
·
double claim submitted and
calculation error, etc.
He requested that all bankers should ensure that
refunds are not made on account of the
above mentioned reasons.
Mr. S. Ramesh, General Manager suggested all the
Member Banks to send the details of refund, if any, as per the format which
will be made available in the web portal, shortly by Nodal Bank.
(Action: Canara Bank)
Agenda Item IV: Display
of list of eligible courses that are covered under CSIS Scheme:
Mr. S. Ramesh, General Manager stated that IBA has
given the list of eligible courses and the list given by them is not the final
one as the same is dynamic. Banks are
including some other Courses under CSIS Scheme.
It is only an indicative list.
He requested that Ministry of HRD may come out with a list of eligible
courses under CSIS Scheme.
Ms. Prabhuta Vyas opined that there will not any
problem if Ministry of HRD continuously updates the list of eligible courses as
new courses are being introduced every year and innovation has become the order
of the day.
In this regard, Mr. Sahdev Singh has intimated that Ministry is
regularly writing to UGC, AICTE, MCI, DCI, PCI and the respective Central
Government Ministries such as, Agriculture, H&FW, Tourism, Civil Aviation,
Social Justice, Labour, Law, Commerce, Coal, Petroleum, Chemical, S&T and Shipping,
etc. for displaying the names of accredited Universities/Institutions and
recognized professional courses on website.
Agenda Item V: Guidelines
for inclusion of Co-operative banks under the purview of CSIS Scheme (Banks
which are not featuring in the Schedule II list of RBI):
Mr. S. Ramesh, General Manager informed that there
is a huge demand from the Co-operative Banks which are financing Education
Loans that they should also be included for claiming the interest subsidy under
CSIS Scheme. He enquired with the
Ministry of HRD and IBA as to whether the scope can be enlarged for covering
the interest subsidy.
Ms. Prabhuta Vyas, Senior Vice President, IBA reiterated
its earlier Managing Committee decision and informed that IBA will be in a position to advise only
its members for uploading all information relating to CSI Scheme. As regards, Co-operative Banks which are not
member of the IBA, the MoHRD may workout
a separate dispensation for submission / payment of claims under the scheme as
well as uploading of information relating to students entitlement benefits in
the web portal. She further informed that Co-operative Banks
which are in the Schedule II List of RBI and are implementing IBA’s Model
Education Loan Scheme only are covered and eligible for claiming interest
subsidy under CSIS Scheme. She further clarified that in the year, 2011-12, the
Ministry of HRD had advised that the Interest Subsidy Scheme would be
applicable also to all Co-operative Banks which are listed in the Schedule II
of Reserve Bank of India Act, 1934 and as amended from time to time and for the
purpose of extending the Interest Subsidy Scheme to Co-operative Banks. Official
from Syndicate Bank made a request to Ministry of HRD to seek the views of
NABARD in this regard.
However, Mr. Sahdev Singh also requested to all for
making / give suggestions that - which entities/Cooperative Societies/Banks
(i.e. Scheduled/Non-scheduled / State Co-operative / Distt. Co-operatives,
etc.) can be covered under the scope of CSIS. Accordingly, MoHRD will write to
NABARD for further future course of action, in this respect.
Agenda Item VI: Income
Criteria for Economically Weaker Sections (EWS):
With regard to enhancing the income limit from ₹.4.5
lakhs to ₹.6.00 lakhs, Mr. Sahdev Singh stated that there is already a huge
burden on the part of the Ministry and the same can be thought of , after some
years.
Agenda Item VII: Monitoring
of beneficiaries (SC/ST/Minority/Disabled etc.) of the Scheme:
With regard to Monitoring of beneficiaries (especially,
women, SCs/STs/Minority (Muslims in particular)/Disabled, etc.) of the Scheme, Ms. Vyas opined that keeping
in mind the national objective, banks should strive to increase the no. of
beneficiaries and that the Bank branches
can be sensitized in this regard. Nodal
Managers can be designated by the Member
Banks for the purpose of monitoring and ensuring maximum coverage of the students belonging to
the above category besides crediting the interest subsidy amount to these
students’ accounts in time.
Agenda Item VIII: RTI
Applications/FAQs/Complaints/Grievance Redressal Mechanism/Problem of Customer
Management (Agenda included as per the directions from Ministry of HRD):
Mr. S. Ramesh, General Manager, Nodal Bank stated
that lot of RTI queries are being received not only by branches of our Bank but
also branches of other Banks. He
stated that Ministry of HRD, Government of India is forwarding RTI applications
pertaining to other Banks also to the Nodal Bank which is not having the
required information for disposal of such applications. He also requested the Member Banks to share
the good practices adopted by their Banks for administering the Scheme and the
initiatives taken by them with regard to recovery of EL/follow up under the
Scheme.
Ms. Vyas suggested that the complaints / queries may
be resolved through robust grievance redressal mechanism within the
organisation. The arrangements need to
be widely publicised with details of contact persons / escalation matrix etc.
All banks are required to sensitise their branches to have these facilities
made available / make awareness among students approaching the banks for
sanction of the education loan.
All banks may provide a toll free line for receipt
of complaints and the Number may be prominently displayed in the branch
premises. Also, she highlighted that IBA
has been constantly receiving an average of 10-15 complaints on non-availability
of Interest Subsidy from student community in this regard. Also, MoF, MoHRD, MPs and MLAs also forward
various representations received by them and requesting us to take action in
the matter. Apart from this, we are
receiving a large number of telephone calls / emails on education loan queries
/ guidance and complaints.
However, to simplify the procedure, she requested Ministry
of HRD to send the RTI applications / Complaints pertaining to other Banks directly for
redressal of the same at the earliest to the concerned banks and not to IBA or
Nodal Bank.
(Action:
MoHRD)
Later, the special invitees from NUEPA, New Delhi and IIM, Bangalore were requested
to inform the outcome of their study of the CSIS Scheme.
Ms. Geetha Rani, Associate Professor, NUEPA, speaking
on the occasion, stated that the sanctity of submission of Income Certificate
by the students for availing interest subsidy under CSIS Scheme needs to be
looked into. Further, she stated that
though the number of students availing interest subsidy in Tamil Nadu is high,
but the per student interest subsidy is less.
She requested the Member Banks to provide them the
details of Education Loan availed by the students under different categories
and the interest subsidy sanctioned by them so that NUEPA can make an effective
study on the same and come out with suggestions.
Mr. Jayadev, Asst. Professor, IIM, Bangalore,
speaking on the occasion, stated that they have already collected data from
Canara Bank about CSIS Scheme and are analysing
the various aspects of the Scheme. He
stated that Government is trying to increase the Gross Enrolment Ratio in the
Educational Institutions, due to which Educational Loans have been increasing.
He opined that Branch Managers in the Banks must be
aware of the eligible courses as well as the recognized Educational
Institutions so that it becomes easy for them at the time of claiming interest
subsidy. He stated that there should be
more clarity with regard to eligible courses and recognized Educational
Institutions from Ministry of HRD.
When it comes to identification of the potential
candidates, Educational Institutions can also play a vital role. Local Banks can have a meeting with the
Educational Institutions at the beginning of the calendar year and an Office
can be opened in the Educational Institutions with the assistance of one or two
persons. He also made a suggestion not
to sanction Educational Loans to those SC/ST students who have already been
sanctioned Scholarship. Official from
IIM, Bangalore further opined that good co-ordination between Banks and
Educational Institutions will go a long way in recovery of the Educational Loan
from the students.
The meeting ended with the
vote of thanks to the chair.
*********
l.eduiss.Finalminutes 31012014
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