Professional Documents
Culture Documents
ON
Educational Loan
Of
Central Bank of India
Submitted by:
ACKNOWLEDGEMENT
2. Introduction to loans
• Loans
• Types of loans
• History
• Recent news/initiatives
10.Bibliography
Title of the Study
Loans are the most versatile form of lending. That’s why I take the title of
the study of my project as “Analysis of loans in India with special reference
to “CENTRAL BANK OF INDIA”.
Scope of loans
The scope of the loans is vast. It deals with that topic of income eligibility,
Annual or monthly installments, late payment charges, interest rates. In this
Study above points are taken to compare the loan of cbi bank with respect to
Other issuers of loans. By this way of studying we can find out the image of
the cbi educational loan with other financial institutions.
Type of Research:
This is basically an analytical study. The study aims at analyzing the impact
of loans on the consumers.
A loan is a type of debt. Like all debt instruments, a loan entails the
redistribution of financial assets over time, between the lender and
the borrower.
In a loan, the borrower initially receives or borrows an amount
of money, called the principal, from the lender, and is obligated
to pay back or repay an equal amount of money to the lender at a
later time. Typically, the money is paid back in regular installments, or
partial repayments; in an annuity, each installment is the same
amount. The loan is generally provided at a cost, referred to
as interest on the debt, which provides an incentive for the lender to
engage in the loan. In a legal loan, each of these obligations and
restrictions is enforced by contract, which can also place the borrower
under additional restrictions known as loan covenants. Although this
article focuses on monetary loans, in practice any material object
might be lent.
Acting as a provider of loans is one of the principal tasks for financial
institutions. For other institutions, issuing of debt contracts such
as bonds is a typical source of funding.
Types of loans
Secured
Unsecured loans are monetary loans that are not secured against the
borrower's assets. These may be available from financial institutions
under many different guises or marketing packages:
Demand
Demand loans are short term loans that are atypical in that they do not have
fixed dates for repayment and carry a floating interest rate which varies
according to the prime rate. They can be "called" for repayment by the
lending institution at any time. Demand loans may be unsecured or secured.
Loan payment
The most typical loan payment type is the fully amortizing payment in
which each monthly rate has the same value overtime. It varies with
the type if loan
Education Loans
Educational loans work like any other debt. That is, loans
are simply specific money that you borrow from a bank, a
private lender, or some other type of lender. Afterwards,
you must repay your debts with interest. However, unlike
other types of loans, educational loans are different in
several respects
The lending sector has commendably recognized the hurdle for these
students and has acted upon the issue to make higher education
feasible by introducing the facility of easy loans for students. The
most beneficial feature of the creation of these types of loans is that
They are easy to acquire. Student usually have a very liberalized set
of terms and conditions governing them, which hence makes them
apt for the purpose for which they have been created - grant of loan
assistance for education.
Scholarships were one of the traditional grants that were provided to
students who had a greater strength to assimilate knowledge. The
scholarships were of formal and informal nature in the earlier times,
and it was also viable for rulers, governments, nobility and
universities to nurture the process of learning within the intelligence of
the selected few, by the provision of scholarships. The advancement,
expansion and spurt of science, commerce and arts after the
Renaissance has made the sphere of learning and education so
extensive that it is beyond the reach of the government to provide
fiscal assistance to all scholars who wish to embark upon a voyage of
scholastic learning.
The fast, easy student loans have thus increased the probability of
more and more students undertaking higher education. The credit
reach of lenders who are willing to induct new loan schemes into their
already existing segments have started taking up new student loans
based in the seed of time. To name a few we may state loans such
as, 'Easy Private Student Loans' or 'Quick and Easy Student Loans'
or 'Easy Student Loans with Bad Credit'.
In a quick sweep it can be said that as these loans are student loans,
easy approval is the most evident feature. The approval of this type of
loan basically depends upon the meritorious records of the applicant.
The other two factors that play a deciding role are the credit history of
the student and the fiscal consideration that has to be paid for the
higher education. The current credit rating and scores are not deeply
assessed, which makes the process faster and hassle free.
Upon the use of the easy loans for students. The Ministries of
Education also maintain a strict check on the approval process of
these loans which makes student loans easy to get
The third merit is the privilege of installments of the easy loans for
students. The installments of these loans start after the student
successfully completes his/her education. The total amount of the
loans is repaid over a reasonably spanned time period and a minimal
rate of interest is levied.
1. Interest rates
the first and the foremost is the interest rates charged on
the education loan. This interest rate is the primary factor
that earns money for banks and so they want it to be
higher, but the competition in the loan market makes the
bank keep it to a level where the education loan seems
affordable to the customer, while it earns money for the
banks too. Whether the interest rate charged on your
education loan is fixed or floating is also a matter of
concern. Generally, the value of fixed interest rates is higher
than the floating interest rates. Going for floating interest
rates in this low interest regime is always a better option.
1. INTRODUCTION:
4. ELIGIBILITY CRITERIA :
4.1 Student eligibility:
b. Studies abroad :-
5. QUANTUM OF FINANCE:
6. MARGIN :
7. SECURITY :
Note:-
8. RATE OF INTEREST :
Upto Rs 4
BPLR
lacs
Above Rs. 4 BPLR +
lacs 1%
Simple interest to be charged during the Repayment
holiday/ Moratorium period.
Penal interest to be charged as applicable to individual
banks.
10. REPAYMENT:
Repayment Course period + 1 year or 6 months
holiday/Moratorium after getting job, whichever is earlier.
11. INSURANCE
Bad credit
Having bad credit simply means that you had trouble in the
past paying your bills on time. You may have bad credit
because you have been the victim of identity theft, because
you have taken out too many loans, or, most likely, you
simply have not paid all your bills promptly. While bad credit
can make it harder for you to get the best loan rates -- or
even any credit at all - today's bad credit education loans
allow you to borrow money for your education. A bad credit
education loan typically has different applications standard
and eligibility standards, making it easier for even those with
an imperfect credit history to get the best education
possible. Education loans for bad credit are widely available
from private lenders and from other sources. When it comes
to bad credit education loan, student options are numerous,
allowing almost anyone to get the money they need for
school.
Banks
Introduction of CBI
Central Bank of India, a government-owned bank, is one of the oldest and
largest commercial banks in India. The bank currently has 3,168 branches
and 270 extension counters across 27 Indian states.
Mr. S Sridhar [Ex CMD National Housing Bank] has been appointed as the
Chairman and Managing Director of state-run Central Bank of India as on 2
March 2009. The post had been lying vacant and the appointment was
cleared by the government, the Bank said in a statement. To improve the
Bank's capital adequacy ratio and enable it to support the credit requirements
of the productive sectors of the economy, the Centre has recently decided to
infuse Rest 1,400 core in the Bank. Under the proposed capital infusion
plan, Central Bank of India will get Rs 700 crore by this month-end, while
the balance amount will be made available to the Bank in next fiscal.
As on March 31, 2006, the bank's reserves and surplus stood at Rs. 1,810.19
crore. Its total business at the end of the last fiscal amounted to Rs. 1,05,677
crore.The bank had a staff strength of 37,241 as on Nov 2006.
Central Bank of India partnered with TCS[ Tata Consultancy Services ] for
its Core Banking Solution. The solution set to be implemented will include
B@NCS from Sydney-based Financial Network Solutions (FNS), Exim
Bills Trade Finance software from China Systems and eTreasury from TCS.
With 703 banks in the core banking system (CBS), it was planned that by
the end of March 2008 a total of 1,000 branches would be brought under the
CBS.As of 31 March 2006, the bank achieved a landmark: crossing a
business mix of Rs. 1,05,000.00 crores. The next target has been fixed at
doubling this figure in the next three years. Krishnan Subharamaniam,
Executive Director of the bank, in his message to staff members, has called
upon them to achieve the target and suggested some steps. One of these
steps is to change the manner in which employees extend service to
customers across different delivery channels. He has advocated the adoption
of the '3R' principles when dealing with customers - recognition, respect and
response. This is asserted to be the path to make customers experience
'Customer
History
It was established in 1911 by Sir Sorabji Pochkhanawala and claims to have
been the first commercial Indian bank completely owned and managed by
Indians.
In 1923, it acquired the Tata Industrial Bank in the wake of the failure of
the Alliance Bank of Simla.
Established in 1911, Central Bank of India was the first Indian commercial
bank which was wholly owned and managed by Indians. The establishment
of the Bank was the ultimate realisation of the dream of Sir Sorabji
Pochkhanawala, founder of the Bank. Sir Pherozesha Mehta was the first
Chairman of a truly 'Swadeshi Bank'. In fact, such was the extent of pride
felt by Sir Sorabji Pochkhanawala that he proclaimed Central Bank of India
as the 'property of the nation and the country's asset'. He also added that
'Central Bank of India lives on people's faith and regards itself as the
people's own bank'.
During the past 98 years of history the Bank has weathered many storms and
faced many challenges. The Bank could successfully transform every threat
into business opportunity and excelled over its peers in the Banking
industry.
1976 The Merchant Banking Cell was established. 1980 Centralcard, the
credit card of the Bank was introduced. 1986 'Platinum Jubilee Money Back
Deposit Scheme' was launched. 1989 The housing subsidiary Cent Bank
Home Finance Ltd. was started with its headquarters at Bhopal in Madhya
Pradesh. 1994 Quick Cheque Collection Service (QCC) & Express Service
was set up to enable speedy collection of outstation cheques.
Further in line with the guidelines from Reserve Bank of India as also the
Government of India, Central Bank has been playing an increasingly active
role in promoting the key thrust areas of agriculture, small scale industries as
also medium and large industries. The Bank also introduced a number of
Self Employment Schemes to promote employment among the educated
youth.Among the Public Sector Banks, Central Bank of India truly described
as an All India Bank, due to distribution of its large network in 27 out of 28
States as also in 4 out of 7 Union Territories in India. Central Bank of India
holds a very prominent place among the Public Sector Banks on account of
its network of 3413 branches and 237 extension counters.
.
Loans offerered BY
cbi
3. Cent buy
7. Cent jewel
8. Cent kalvani
Introduction
Central bank of India provides loan to poor and needy so that they can take
up basic education and to the student/ employed persons to pursue higher
education. Loan can be applied for studies in India and abroad for
graduation, post graduation, diploma / degree courses, etc.
Cent Vidyarthi Loan. It is offered to meritorious students willing to
pursue their higher education in India or abroad. Central Bank of
India established in the year 1911 was regarded as the first
commercial bank of India entirely managed and owned by Indians.
Being the first Swadeshi Bank of India, it was nationalized in the
year 1969. In order to know more about Central Bank student loans,
scroll down the page.
Candidate's Eligibility
Candidates applying for the education loan need to satisfy
certain eligibility criteria as specified by the bank.
Students applying for the Central bank of India student loan are considered
eligible if they get admission to various professional or technical courses
through merit based selection process or entrance examination.
Objective
The scheme aims at providing financial assistance on reasonable
terms :
Eligibility
• Studies in India :
• School education including plus 2 stages.
• 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 course of reputed institutions accredited
to
• Department of Electronics or Institutions 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 Universities.
• Evening courses of approved institutions.
• Other courses leading to Diploma/Degree etc. conducted by
Colleges/Universities approved by UGC/Govt./AICTE/ICMR
etc.
• Courses offered by National Institutes and other reputed
private institutions. Any other institution courses depending
on future prospects/recognition by user institutions deemed
proper by the Bank.
For graduation
Studies in India
• School education which includes +2 standard, graduation, post
graduation and professional courses in the areas of
Agriculture, Law, Engineering, Veterinary Science, Medicine,
Management, Dental Science, Computer and others.
• The courses should be offered by reputed colleges or
institutions approved by Department of Electronics or
Institutions certified by the University.
• IIM, NIFT, XLRI, IIT offered courses, reputed regular diploma
and degree courses, evening courses and courses that are
conducted by foreign universities in India.
Studies Abroad
Quantum of Finance
The maximum amount of loan offered is Rs.7.50 lacs and Rs.15 lacs
for studies in India and abroad respectively.
Margin
Courses Approved
Highlights of loan
HSBC Bank
HSBC bank helps you to fulfill your dream to get good admission in
good college/ professional institute in India or abroad. Bank gives
education loan for studies in India and abroad. Bank has flexible
tenure, comprehensive coverage, low interest rate, etc. Bank also have
special discount for HSBC customers.
1. Interest rates
The first and the foremost is the interest rates charged on
the education loan. This interest rate is the primary factor
that earns money for banks and so they want it to be
higher, but the competition in the loan market makes the
bank keep it to a level where the education loan seems
affordable to the customer, while it earns money for the
banks too. Whether the interest rate charged on your
education loan is fixed or floating is also a matter of
concern. Generally, the value of fixed interest rates is higher
than the floating interest rates. Going for floating interest
rates in this low interest regime is always a better option.
The interest rates also depend on the amount of education
loan one wants, keeping in mind all the realistic
requirements, a judicious comparison of various offers from
leading banks will certainly help the student find an
education loan that pinches the least.
COMPARE : EDUCATION
LOAN Rates
Study India
-
Central Bank 50000.00 400000.00 10.50
of India
-
HSBC Bank 50000.00 2500000.00 12.00
-
ICICI Bank 50000.00 400000.00 13.75
Study Abroad
Bank Min. loan Max. loan Rate % Eligibiliy
-
Central bank 50000.00 400000.00 10.50
of India
-
ICICI Bank 50000.00 400000.00 13.00
be taken as co-
borrowers (Optional).
CENT Vidyarthi
Studies in India
Coverage of expenses :
Quantum
Need based finance subject to repaying capacity of the
parents/students with margin and the following ceilings:
Margin :
Upto to Rs.4.00 lacs - No margin
Above Rs.4.00 lacs
Security :
Rate of Interest:
As per bank rules
Further details of cent vidayarthi scheme
Purpose of Loan
For pursuing higher studies, in India & Abroad
Eligibility
Student should be an Indian National having secured
admission to Professional / Technical courses through
entrance test / selection process.
Nature of Facility
Term Loan
Margin
Upto Rs. 4 lacs : NIL, Above Rs. 4 lacs:In India - 5%
,Abroad - 15% Margin (scholarship may be included in
margin.)
Incentive
1% interest concession, if interest is serviced during study
period when repayment holiday is specified for interest
repayment. It should be given at the end of Financial Year
i.e. 31st March.
Interest is calculated at simple basis during Repayment
Holiday / Moratorium Period. Interest will be compounded on
monthly rests from due date of first instalment.
Disbursement
Payment directly to college / hostel / mess / airlines etc. In
appropriate cases disbursement to be made to borrowers
subject to satisfactory evidence. Original receipts to be
submitted.
Repayement
Conclusions
Loans play a very important role now a days . central bank of India provides
loans to poor and needy so that they can take up basic education and to the
student /employees person to pursue higher education loan can be applied
for studies in India and abroad for graduation, post graduation , diploma
/degree courses central bank of India provides education loans at different
rates to students studying in India and abroad .there are also various other
loan which central bank of India offers but my focus is on educational loan
of central bank of India .basically loans are of two types secured loans and
unsecured loans . secured loans are those where market value of security is
not less than amount of such loans .unsecured loans are those where there is
no security .loans can also be short term and long term loans but education
loans are long term loans because it is said that loan will be repaid when
student will start earning. Normally a bank keeps several securities in case
the borrower is unable to repay the loan, the bank can take away these
securities . in order to the banker a charge should be created on securities .
creating a charge means the security or the think against which the bank has
taken loan can not be sold.
Recommendation
Loans should be given at reasonable rates to students so that even poor
people can afford it and give education to their children. Government should
take more initiative so that every child in India is educated. The fast easy
student loan has thus increased the probability of more and more
students undertaking higher education. The Ministries of Education
also maintain a strict check on the approval process of these loans
which makes student loans easy to get.
BIBLIOGRAPHY
www.google.com
www.yahoo.com
www.centralbank.net.in