Loans
Students in 28 states fail to get interest subsidy on education loans

In the absence of an authority to issue income certificates, students from several states are finding it difficult to get interest subsidy on education loans offered by the union government. This has also hampered banks from disbursing loans to needy students

Nearly a year after the central government finalised a scheme to provide interest subsidy on education loans for students from the economically weaker sections, many states and union territories have still not designated the income certificate issuing authority.

Canara Bank is the nodal bank for member banks of the Indian Banks' Association (IBA) to claim reimbursement of the interest amount. The scheme was planned and the details worked out by the Ministry of Human Resource Development over a year ago. But according to data on the Canara Bank website, as many as 28 states and union territories are yet to designate the income certificate issuing authority.

According to the ministry, under the scheme formulated by the IBA, full interest subsidy will be provided during the period of moratorium on education loan for students from families with an annual income of less than Rs4.5 lakh.

The ministry said recently, "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/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 apply for the loans, would be aware of the same. The eligible students may get the details of designated authorities from the concerned branch of the bank where they have availed of the loan."

Several banks have been trying to help students avail of the scheme, but their efforts have been hampered as students have not been able to find the authority that will issue an income certificate.

"We have already sent the claims to the nodal banks. But many of the states are yet to designate the income certificate issuing authority," said a senior official at a public sector bank that has its headquarters in Mumbai.

An Indian Bank official, who requested anonymity, told Moneylife that, "We have received and credited claims of more than 50,000 students. We forwarded these claims on the interest subsidy on education loans to Canara Bank for 2009-10. But a few states are yet to identify the authority to issue income certificate."

Students have complained they cannot identify the authority. One such complaint on the www.conumercourt.in reads: "I had taken education loan for my son studying in BITS Pilani, Hyderabad Campus. When the Central government decided to give interest subsidy for EWS, I applied for the same. However, the SBI authorities asked me to get an income certificate signed by MRO (tehsildar). On approaching my tehsildar, he said that there is no go which authorises me to sign income certificate. I had shown the memo issued by principal secretary to government to all collectors, but the MRO insists that he will not sign the income certificate and the SBI are not willing to accept my application. I am caught between the devil and deep sea (state and central governments)."

Meanwhile, the ministry has announced that 20 July 2011 is the last date to submit certificates to their respective branches, so that interest could be credited with interest due on the loans taken during the academic year 2009-10 onwards.

The current scheme on education loans also allows a deduction under section 80E of the Income-Tax Act for interest paid on the loan.

User

COMMENTS

shankar

2 years ago

I have taken education loan from canara bank in 2009-2010 and i have finished all formalities in order to get education loan subsidy. But subsidy not yet deposited to my a/c. i asked bank people but they don't give correct information....

hariom mishra

2 years ago

Dear Sir,
I am Hariom mishra from Madhya pradesh i had taken education loan from union bank aof india in 2009 -10 and i am eligible for that subsidy but till now i have not receive right subsidy by bank kindly guide me for feature.

naga

2 years ago

Hi sir
I have a education loan in state bank of india in 2008(1.4lk), some period i didn’t pay the interest now in my account my outstanding amount is 2.2lk, i hope you aware of the interest subsidy 2014, till now i didn’t get any amount from interest subsidy, account shows same outstanding amount. Once i have got 6k for interest subsidy. At this situation am i eligible for get this interest subsidy 2014 ?

naga

2 years ago

Hi sir
I have a education loan in state bank of india in 2008(1.4lk), some period i didn’t pay the interest now in my account my outstanding amount is 2.2lk, i hope you aware of the interest subsidy 2014, till now i didn’t get any amount from interest subsidy, account shows same outstanding amount. Once i have got 6k for interest subsidy. At this situation am i eligible for get this interest subsidy 2014 ?

naga

2 years ago

Hi sir
I have a education loan in state bank of india in 2008(1.4lk), some period i didn’t pay the interest now in my account my outstanding amount is 2.2lk, i hope you aware of the interest subsidy 2014, till now i didn’t get any amount from interest subsidy, account shows same outstanding amount. Once i have got 6k for interest subsidy. At this situation am i eligible for get this interest subsidy 2014 ?

Gopi k

2 years ago

Hi sir, i have taken loan(1.17 L) during 2007-2011 batch(b.tech). Already i got subsidy of 10000 last year(2013), whether i will eligible for 2014 interest subsidy scheme . my family income below 3L only. please reply me.

karthikraja

2 years ago

sir,my name is karthik.i studing BE civil by education loan on uco Bank.i already get CCIS for last 1 year.but now the Bank manager is changed.New bank manager said me to pay my intrest(this month+last 1 year) within three days.when i ask about the CCIS she said "its an gov scheme they less this amount on future".(repaying time after my course completed)now u pay it or u will not get the next year(4th year) loan.pls tell me the detail about CCIS.give me a suggetion on this problem.now i am studing 3rd year.is that i need to pay my intrest or ......
thanking u i'm waiting for ur reply

Ashiqu

2 years ago

I am Ashiqu from ernakulam and studying for B.Tech and taken education loan from UBI, W/Island Branch. I got only 2% susidy eventhough I am below the income group 4.5 lakhs per year

Suresh Kothari

2 years ago

Dear Sir/Madam

My name is Suresh Kothari and I have taken loan for 1.60 lacs in Nov 2008 of Higher Studies from SBI Shaibhaug Branch. Government of India has announced Interest subsidy for weaker students. My parental income is below 4.50 lacs and I do not have job right now. My interest subsidy claim has been rejected due to irregular payment. I have paid lum sum amount many times but I haven't paid 3 EMI on time. Is this such criteria to not grant subsidy. This is not my case but same case with other students. Out of 367 figure only 14 students is benefited from this subsidy. I also refereed to Canara Bank criteria who is transferee of 3000 Cr Subsidy but in that I haven't found such a irregular criteria.

Please re asses your criteria as it is not benefited to many students. This criteria is set like manipulation which is not benefited my students.

With Regards
SURESH KOTHARI
Loan Account Number--- 30458402162
SBI Shahibhaug Branch--- Ahmedabad

9427067127

REPLY

Pramod

In Reply to Suresh Kothari 2 years ago

There is not any criteria that your account should be regular during moratorium period.You are eligible for CSIS.But it was not eligible for abroad studies.
You were eligible for New CSIS as announced by P.Chidambaram recently.Check whether your branch has claimed this or not?
P.N.Sharma
Officer SBI
8055114949

Nagesh Kini

In Reply to Suresh Kothari 2 years ago

Try approaching the Banking Ombudsman.

Saikiran

3 years ago

I have taken education loan in august 2010.I am eligible for CSIS.But i have not applied for it,as i got to know regarding this Interest Subsidy one week back.Now if i apply for this,can i get the interest subsidy for 2010-2013 years.Please reply me.
thank you

cn mukherjee

3 years ago

My son had availed education loan from bank of india and when he received one installment of interest subsidy the a/c was closed after full & final as he felt for overseas job assignment. Now will he received the rest subsidy due and how ?

gourav

3 years ago

where i can find the list of student who got their interest subsidy on education loan..

is there any official website for those who actually pays our interest..
i m an engineering student i applied for the same in SBI as i am studying in KIIT university and my loan is of 6 lack interest is increasing very fast.
i applied for interest subsidy of edu. loan but didn't got anything till now, where can i make query. bank officers are saying that if it will come we will let u know..
please suggest me what to do.

REPLY

nagesh kini

In Reply to gourav 3 years ago

You can possibly file a RTI query to the Customer Services Dept. of the RBI, Amar Building, PM Road, Mumbai 400 001. They may not disclose the individual names of students.

nagesh kini

In Reply to gourav 3 years ago

You can possibly file a RTI query to the Customer Services Dept. of the RBI, Amar Building, PM Road, Mumbai 400 001. They may not disclose the individual names of students.

gourav

3 years ago

where i can find the list of student who got their interest subsidy on education loan..

is there any official website for those who actually pays our interest..
i m an engineering student i applied for the same in SBI as i am studying in KIIT university and my loan is of 6 lack interest is increasing very fast.
i applied for interest subsidy of edu. loan but didn't got anything till now, where can i make query. bank officers are saying that if it will come we will let u know..
please suggest me what to do.

cn mukherjee

4 years ago

Would be obliged to know the address of CIC of H R department to place a RTI regarding some points on interest subsidy on higher education loan.

Ranjith Kumar

4 years ago

I have taken loan from Canara bank for pursuing B.tech IT in chennai.(2009-56,500 and 2010-56,500. total -1,13,000 ).Completed my course in 2011 and got employed in nov 2011. I was eligible for interest subsidy. so i have submitted all the documents.I have got interest subsidy for the period of duration of my course(2009-2010, 2010- 2011). But as per the scheme it is mentioned that interest subsidy will be provided for the moratorium period, which is duration of the course plus 1 yr or 6 months from the date of employment whichever is earlier. But when i contacted the bank manager he is telling that interest subsidy will be provided oly for the period of study and not for the additional 1 yr after the duration of the course. He is not taking any step to claim for interest subsidy for that 1 year after the course. Looking for someone who can advise and help on this.

REPLY

nagesh kini

In Reply to Ranjith Kumar 4 years ago

Write to the CMD at Bengaluru and their Grievances Cell there.
Obtain a copy of the interest subsidy scheme from Canara Bank or the Customer Services Dept. RBI nearest Regional Office
.We'll try to make enquiries here too.

Ranjith Kumar

In Reply to nagesh kini 4 years ago

Hi Nagesh,
I have tried writing to regional manager of chennai, but no response as of now. Dont know what to do? also i am not sure clear if the interest will be provided for that additional 1 yr after the course. Can you please advice/help me on this.

nagesh kini

In Reply to Ranjith Kumar 4 years ago

m reply stands. write or mail the cmd's office of canara bank and customers services of rbi chennai ro listing all your efforts.they are bound to respond.

Agents’ community angry over small savings committee’s recommendations

Committee, headed by RBI deputy governor, proposes reducing or abolishing agent’s commission on various schemes such as PPF, NSC

The finance ministry's committee on small savings has, in its recent report, recommended either reducing or completely abolishing the commission paid to agents on various schemes, saying that it adds to the overall cost of the schemes. This has aggrieved many agents who feel that the recommendations are 'unfair'.

The committee, chaired by Shyamala Gopinath, deputy governor of the Reserve Bank of India, has made its recommendations in the "Report of the Committee on Comprehensive Review of National Small Savings Fund" on the commission paid in the Standardised Agency System (SAS), Mahila Pradhan Kshetria Bachat Yojana (MPKBY) and Public Provident Fund Agents (PPFA). Agents are paid for these schemes from the National Small Savings Fund (NSSF) on the basis of gross small savings collections.

The committee says that under PPF, the commission should be abolished. Under PPF, 90% of the transactions are happening through banks, and for banks commission is not payable for any other scheme of theirs. The committee feels that 4% commission under MPKBY is very high and is affecting the viability of NSSF.

"The committee recognises that the RD (recurring deposits) scheme requires considerable effort on the part of agents in mobilising monthly deposits. However, 4% commission is distortionary and expensive. The committee recommends that this should be brought down to 1% in a phased manner in a period of three years, with a 1% reduction every year. Under SAS, while the commission for the senior citizen saving scheme is 0.5%, it is 1% on other schemes. The committee recommends that while commission should be abolished on the Senior Citizen Saving Scheme, on other schemes, it should be brought down to 0.5%."

According to the report, there are over five lakh small agents in the country. Over Rs2,000 crore is paid annually as commission to the agents of the small savings schemes. This, the report says, adds to the overall cost of the schemes and is "agent driven".

Industry experts have two views on this, even as the agents' are protesting. Experts feel that 4% is a high commission to be paid, but not paying anything is not the right approach.

It has recently been reported that UK Sinha, chief of the Securities and Exchange Board of India (SEBI), is planning to incentivise distributors in order to provide "organised and sustainable growth of the mutual fund industry". In August 2009, then SEBI chief, CB Bhave, had banned all entry loads on mutual fund schemes.

Mumbai-based PPF agent, Shrigopal Jhunjhunwala told Moneylife, "These recommendations are against the customers. They (government) think that the bank is providing PPF service, so agents are not required. This is a wrong perception. We make the customers understand about the scheme, new rules and regulations, take timely payments from them, deposit in banks, maintain their records. We earn just 1% anyways, which is for our service. Such recommendations will make agents give up their profession and eventually affect customers who are already confused about the schemes."

Mr Jhunjunwala says, "These recommendations will make PPF scheme the same as the New Pension Scheme, in which only a few people are investing."
Blog Galaxy of independent financial advisors says, "I feel that (there are) large number of fellows (who are) also engaged in distribution of small savings schemes (post office schemes - NSC, MIS, SCSS 2004, RD, etc.) The proposed changes will adversely affect the business models of all such fellows."

Snehal More, post office savings scheme agent from Mumbai, echoed the view. "This is unfair. People are themselves unaware of their investments. We get commission, but there is equal amount of hard work to earn this. We have to collect money on a monthly basis, track clients' maturity dates, and so on. Many people don't pay on time and at times we have to pay the defaults. Already, many agents are giving up because of such hassles. These recommendations will lead more agents to give up the work."

Currently, under SAS, there is a commission of 0.5% or 1% of the total collection on schemes like Kisan Vikas Patra, Post Office Monthly Income Scheme, Post Office Time Deposits, National Savings Certificates, National Savings Scheme and Senior Citizens Savings Scheme. In the case of PPF also the commission is 1%.

The report says that the revised estimate of such commissions paid out in 2010-11 was Rs2,400 crore. Mumbai-based agents have planned meetings to protest against the recommendations.

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COMMENTS

RAHUL YADAV

5 years ago

POST OFFICE MAI SMAL SAVING AGENT BANANE KE LIYE KANHA PER APPLLY IYA JA SAKTA HAI

Geetaben S Shah

5 years ago

More trouble for PPF A\c Holder
for Deposite in this a\c
All Such A\c In SBI And Big No Customer So he could not manage

srinivasan

5 years ago

Govt should give the comm.Many depositors the sound people only pay PPF.Interest is not a bother for them.Since it is exemption from court attachement they do more.

AIMSA

5 years ago

AS PER THE GOVERNMENT / NSI ADVERTISEMENTON 20 DECEMBER IN ALL LEADING NEWS PAPERS - "CONTACT SMALL SAVING AGENT FOR MORE INFORMATION",

WHAT THE GOVERNMENT WANTs FROM SMALL SAVING AGENTS?

ITS REALLY SHAMEFUL.


http://www.facebook.com/AIMSAORG

rubia

5 years ago

government has ruined the lives of the agents..grow uP govt.!!!!!

shashi jindal

5 years ago

reducing commission of sas ppf agent affecting service to small savers of middle & lower middle class families so pls govt. should increase the commission

CHANDRESH BOGHANI

5 years ago

REMOVING COMMISSION IN SMALL SAVINGS SCHEME WHAT THEY WANT TO PROVE ? GOVT.DECISION ARE TOWARDS UNEMPLOYMENT AND IF YOU WANT TO LIVE THEN WORK UNDER US.DON'T GROW IN YOUR WAY BUT DO SERVICE AS WE WANT. NOTHING ELSE BUT TOWARDS WESTERN COUNTRY SYSTEM.RICHER BECOME MORE RICHER .

gourav jain

5 years ago

if the branches of tree is cut then no one tree are live the same condition in fue time same condition are in p.o.

A K SHAH

5 years ago

This is very shocking news for our PPF Agent community if ministry of finance take decision completely abolishing PPF commission then it is a wrong step,as we are in there sector from last 55 yrs by visiting each & every door we had discuss scheme rule with them ,time to time we had remind A/C holder for depositing money in PPF& giving other service like change of address,
nomination,maturity & death claim ,my request to Ministry of Finance pl restore our commission as 1% only

REPLY

Geetaben s shah

In Reply to A K SHAH 5 years ago

ppf commission start it

Sudhir Singhal

5 years ago

PPF agent motivates an investor with the promise to investor that he will be provided services by the agent for the next 15 years which is the maturity period of PPF account. Is not it cheating by the Ministry of Finance by abolishing the commission on PPF accounts which have been opened by the PPF agents and have maturity in coming 15 years? This is like getting your job done without paying to the employee. While it should have been like Insurance sector if an agent introduces a policy to insurance company an agent is assured of getting commission by the insurance company on all the subsequent subscription till maturity/survival of the policy.

PNB housing, SBI housing Finance and many more are subsidiaries of their respective parent banks, and they too appoint agents for collection of funds and pay commission to agents.

REC (A Navratan Company of Govt. of India), NHAI also appoint agents to collect funds from public under long term capital gain scheme u/s 54EC and pay commission to agents.

Look at National Pension scheme; it is not being sold through agents and look at the fate of the scheme of Government. Without agents it has failed to create a positive response among people, same will happen with PPF scheme

sunil pathak

5 years ago

as such many more sas ppf aents are going in financial depression whose service more then 15 years of post offices

vinod navale

5 years ago

large number of familiesi of sas ppf agents faicing financial hardship mulitinational companies and govt.employee got good salaries increasing mod.e

vsraval

5 years ago

reducing commission of sas ppf agents affecting service to small savers of middle and lower middleclass families

SUDHIR SINGHAL

5 years ago

As mentioned in the report that a sum Rs.2,200 crore was paid to agents in the last financial year. True, but agents also collected more than 2,20,000 (Two Lacs Twenty Thousand crores) crore rupees for the Govt., which is more than 100 times of the commission paid to small savings agents. If Rupees 2,200 crore (Commission) divided by 5,00,000 small savings agents all over India, means that an agent only earned Rs.44,000/- per annum, which is by far less than a laborer who earns Rs.250/- per day and Rs.78,250=00 P.A. (excluding holidays).

SUDHIR SINGHAL

5 years ago

As stated in Shyamla Gopinath report Banks do not pay commission on its any scheme is false. Smt Shyamla Gopinath being the Deputy Governor, should have been aware of the fact that RBI which is the father of the other banks pays 1% commission on its scheme known as “8% Savings Bonds” erstwhile known as RBI Relief Bonds, and it is being sold through State Bank of India who is also handling PPF accounts. Mr. R. Sridharan, Managing Director, State Bank of India, who was an elite member of this committee, should have brought this fact to the notice of Smt. Shyamla Gopinath. But, he did not. Why? Hence, it proves the influence and lobbying of the banks to abolish the agent’s commission, and it is quite evident that commission has been abolished only on these two schemes which are being handled by banks.

SBI Mutual Fund plans global emerging market fund

This open-ended fund of funds will invest in emerging market funds like Amundi, which has given good return over the past one year. But the long-term story is not encouraging

SBI Mutual Fund has filed an offer document with the Securities and Exchange Board of India (SEBI) to launch SBI Global Emerging Market Fund, an open-ended fund of funds. The primary investment objective of the scheme is to seek capital appreciation by investing predominantly in Emerging Market equity funds like Amundi Funds Emerging Internal Demand. The scheme may also invest a certain portion of its corpus in money market securities in India, in order to meet liquidity requirements from time to time. The new fund offer price is Rs10 per unit.

The scheme would invest 80% to 100% of assets in units/securities issued by overseas mutual funds investing in emerging market equity, with a medium- to high-risk profile. Up to 20% of assets will be invested in domestic debt and money market instruments with a low-risk profile, and up to 20% of assets in listed equity securities of emerging market countries with a medium- to high-risk profile.

Investors will have the choice of growth or dividend (payout) options.

The objective of Amundi Funds Emerging Internal Demand is to achieve long-term capital appreciation by investing at least two-thirds of the assets in equities and equity-linked instruments of companies in developing countries. Such investments can be made through P-Notes, in case of limited access to a stock market, or for the purpose of efficient portfolio management. The scheme performance will be benchmarked against the MSCI EM Index.

The one-year and three-year return of Amundi Funds Emerging Internal Demand is 19.90% and 3.14%, respectively. The return since inception is 0.80%. On the other hand, the one-year and three-year return of MSCI EM (emerging markets) is 21.44% and 3.02%, respectively, while its return since inception is 0.57%.

The entry load is nil, whereas a 1% exit load will be charged for exiting within a year from the date of allotment. The total recurring expense would be 2.5% per annum and the minimum application amount on the regular plan is Rs10,000 and in multiples of Rs1, thereafter.

The fund manager of the scheme is Anup Upadhyay, who has been with SBI Mutual Fund for the past four years. He has been an equity analyst in the technology, telecom and education sectors with SBI Mutual Fund since May 2007. He previously worked with Tata Consultancy Services for a year. 

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