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8/10/2019 Comparative Study on Education Loan With Referance to Sbi & Abhyudaya Co Operative Bank
Education loan is the most important aspect from all points of view whether fromthe point of student or from the point of banks. Education helps the students to study
further. 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.
It help the student to achieve great knowledge. The student who can’t pay the fees
of college they take this type loan.
The objective of this project
To know the process of education loan in public sector bank &co operative bank.
To find out which bank is more prefer by student.
The research is done by both methodsprimary method as well as secondary method.
Means doing survey, having a questioner, referring books, as well as the news paper
and the search engine.
8/10/2019 Comparative Study on Education Loan With Referance to Sbi & Abhyudaya Co Operative Bank
Education is central to the Human Resources Development and empowerment in anycountry. National and State level policies are framed to ensure that this basic need of
the population is met through appropriate public and private sector initiatives. While
government endeavours to provide primary education to all on a universal basis, higher
education is progressively moving into the domain of private sector. With a gradual
reduction in government subsidies higher education is getting more and more costly and
hence the need for institutional funding in this area.
1.2 Objective of study
To know the process of education loan in public sector bank &co operative bank.
To find out which bank is more prefer by student.
8/10/2019 Comparative Study on Education Loan With Referance to Sbi & Abhyudaya Co Operative Bank
Primary data is a term for data collected from a source. Raw data has not beensubjected to processing or any other manipulation, and are also referred to as
primary data.
Qutionnaire with student & customer of both the bank.
Secondary data
Secondary data is data collected by someone other than the user .
1. Websites
2. Newspaper
3. Reference books
8/10/2019 Comparative Study on Education Loan With Referance to Sbi & Abhyudaya Co Operative Bank
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
tool to find your own way in the world. Education is indispensable little do were alike
how much more it can bring to us in term of worldly amplifications. Anyone can have
propensity and the natural endowment for education. But one might not have the
resources to finance their education. Education is indispensable; little do were alike 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 cannot let lack of resources impede
you from advancing your prospects through education. Then you accidentally stumble
up on the word education loan. 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 back up to their
education plans. Private education loans are not endorsed by other government
agencies but are provided by other financial institutions. Private education loansprogram 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
8/10/2019 Comparative Study on Education Loan With Referance to Sbi & Abhyudaya Co Operative Bank
collecting cheques deposited to customers' current accounts. Banks also enablecustomer payments via other payment methods such as Automated ClearingHouse(ACH), Wire transfers or telegraphic transfer, EFTPOS, and automated tellermachine(ATM).
Banks borrow money by accepting funds deposited on current accounts, by acceptingterm deposits, and by issuing debt securities such as banknotes and bonds. Banks lendmoney by making advances to customers on current accounts, by making Installmentloan, and by investing in marketable debt securities and other forms of money lending.
Banks provide different payment services, and a bank account is consideredindispensable by most businesses and individuals. Non-banks that provide paymentservices such as remittance companies are normally not considered as an adequatesubstitute for a bank account.
8/10/2019 Comparative Study on Education Loan With Referance to Sbi & Abhyudaya Co Operative Bank
Cash certificates are issued to the public for a longer period of time. It attracts the
people because its maturity value is in multiples of the sum invested. It is an attractive
and high yielding investment for those who can keep the funds for a long time.It is avery useful account for meeting future financial requirements at the occasion of
marriage, education of children etc. Cash certificates are generally issued at discount to
face value. It means a cash certificate of Rs. 1, 00,000 payable after 10 years can be
purchased now, say for Rs. 20,000.
2. Demand Deposits:
These are the deposits which may be withdrawn by the depositor at any time without
previous notice. It is withdraw able by cheque/draft. It includes the following:
(a) Savings Deposits:
The savings deposit promotes thrift among people. The savings deposits can only be
held by individuals and non-profit institutions. The rate of interest paid on savings
deposits is lower than that of time deposits. The savings account holder gets the
advantage of liquidity (as in current a/c) and small income in the form of interests.But
there are some restrictions on withdrawals. Corporate bodies and business firms are not
allowed to open SB Accounts. Presently interest on SB Accounts is determined by RBI.
It is 4.5 per cent per annum. Co-operative banks are allowed to pay an extra 0.5 per
cent on its savings bank deposits.
(b) Current Account Deposits:
These accounts are maintained by the people who need to have a liquid balance.
Current account offers high liquidity. No interest is paid on current deposits and there
are no restrictions on withdrawals from the current account.These accounts are
generally in the case of business firms, institutions and co-operative bodies.
8/10/2019 Comparative Study on Education Loan With Referance to Sbi & Abhyudaya Co Operative Bank
Discounting of Bills may be another form of bank credit. The bank may purchase inland
and foreign bills before these are due for payment by the drawer debtors, at discounted
values, i.e., values a little lower than the face values. The Banker's discount is generallythe interest on the full amount for the unexpired period of the bill. The banks reserve the
right of debiting the accounts of the customers in case the bills are ultimately not paid,
i.e., dishonored. The bill passes to the Banker after endorsement. Discounting of bills by
banks provide immediate finance to sellers of goods. This helps them to carry on their
business. Banks can discount only genuine commercial bills i.e., those drawn against
sale of goods on Credit. Banks will not discount Accommodation Bills.
4. Loans and Advances:
It includes both demand and term loans, direct loans and advances given to all type of
customers mainly to businessmen and investors against personal security or goods of
movable or immovable in nature. The loan amount is paid in cash or by credit to
customer account which the customer can draw at any time.The interest is charged for
the full amount whether he withdraws the money from his account or not. Short-term
loans are granted to meet the working capital requirements where as long-term loans
are granted to meet capital expenditure.
Previously interest on loan was also regulated by RBI. Currently, banks can determine
the rate themselves. Each bank is, however required to fix a minimum rate known as
Prime Lending Rate (PLR).
8/10/2019 Comparative Study on Education Loan With Referance to Sbi & Abhyudaya Co Operative Bank
Travelers Cheques are used by domestic travelers as well as by international travelers.
However the use of traveler's cheques is more common by international travelers
because of their safety and convenience. These can be also termed as a modified form
of traveler's letter of credit. A bank issuing travelers cheques usually have banking
arrangement with many of the foreign banks abroad, known as correspondent banks.
The purchaser of traveler's cheques can encase the cheques from all the overseas
banks with whom the issuing bank has such an arrangement. Thus traveler's cheques
are not drawn on specific bank abroad. The cheques are issued in foreign currency and
in convenient denominations of ten, twenty, fifty, one hundred dollar, etc. The signature
of the buyer/traveler is written on the face of the cheques at the time of their purchase.
The cheques also provide blank space for the signature of the traveler to be signed at
the time of encashment of each cheque.
A traveler has to sign in the blank space at the time of drawing money and in the
presence of the paying banker. The paying banker will pay the money only when the
signature of the traveler tallies with the signature already available on the cheque. A
traveler should never sign the cheque except in the presence of paying banker and only
when the traveler desires to encash the cheque. Otherwise it may be misused. The
cheques are also accepted by hotels, restaurants, shops, airlines companies for
respectable persons. Encashment of a traveler cheque abroad is tantamount to a
foreign exchange transaction as it involves conversion of domestic currency into a
foreign currency. When a traveler cheque is lost or stolen, the buyer of the cheques has
to give a notice to the issuing bank so that stop order can be issued against such
lost/stolen cheques to the banks where they are permitted to be encased. It is alsodifficult to the finder of the cheque to draw cash against it since the encasher has to
sign the cheque in the presence of the paying banker. Unused travelers cheques can be
surrendered to the issuing bank and balance of cash obtained. The issuing bank levies
certain commission depending upon the number and value of travellerscheques issued.
8/10/2019 Comparative Study on Education Loan With Referance to Sbi & Abhyudaya Co Operative Bank
A dignified education can change the entire life of a person, leading him towards asuccessful life and financial independence. Education loan enables you to meet the
financial demands of a reputed MBA program or any such professional course. The best
part of these loans is that once you complete your objective and achieve financial
freedom, you can pay back them easily. Hence, the commitment involved with such
loans is very reasonable and appealing.
Financial institutions have made an education loan an easygoing task for the applicants.
One can apply for the loan by visiting the bank in person or through website of the bank.
Majority of the banks provide online application forms and detailed relevant information
for applicants’ convenience.
Student loans are great alternatives as compared to conventional loans. They not only
offer lucrative interest rates but also have easier terms and conditions. Majority of the
nationalized banks generally do not ask for any security and charge no margins for a
loan amount up to Rs. 4 Lacs.
Another key benefit of these loans is the deferment of re-payments. The borrower is not
required to repay the loans while studying as the re-payment process commences after
completion of the said course and attaining a job within a stipulated span of time.
Student loans also show considerable flexibility towards loaner in terms of repayment
schedule.
The best advantage of education loan is that it not only satisfies the financial need to
proceed with higher education but helps in saving income tax also while repayment. Tax
benefits on education loan end up reducing overall cost of the loan.
8/10/2019 Comparative Study on Education Loan With Referance to Sbi & Abhyudaya Co Operative Bank
Education loans are definitely a boon for students aspiring for higher studies and aid
them financially but in most cases, the choice is driven by the aggressive and forceful
marketing strategies done by banks offering these loans. More than aiding a student,
the stake of the financial institutions lies in, increasing the profitability of their business.
They stand out as a prudent product for the banks to sell and achieve margins.
Students get trapped in the web of unsuitable education loans due to lack of proper
knowledge and understanding about the loan procedures and banks’ terms and
conditions. In many cases, bank disclosures for securities (viz. mortgages, guarantee)
are not adequate or presented in a very complex manner for applicants to understand,
given their limited understanding of credit market. Due to such complexity, applicants
are not fully acquainted with the schemes and risks involved in availing the credit.
Hence, when re-payment process starts, borrowers have to deal with unexpected
problems which leave them helpless.
It’s very important for borrowers to analyze the long run suitability of the loan
beforehand so that debt does not lead to an unmanageable situation. In case a
candidate is not able to repay the loan as per schedule due to some unavoidable
situations, he has to suffer great hassles owing to the bank’s mounting pressure for
repayments.
Majority of the banks are unable to provide proper assistance to the borrowers who are
facing a tough time during repayments. Loaners are not ensured any rights and
remedies by the banks if caught in unaffordable loans. Loans may go into default verysoon after missed payment.
Generally in the beginning banks, do not inform adequately about workout and
cancellation procedures and later start putting late fee, and other charges for delayed
payments, further increasing the overall cost of loan. Although most of the banks try to
co-operate and show considerable flexibility in terms of payment schedule, they usually
turn out to be inflexible in granting long- term repayment relief for borrowers.
Undoubtedly, today, when higher education is costlier than ever, education loans are
the most welcomed antidote by aspiring candidates. Certainly, these loans are the bestanswer to financial shortage for a successful career if chosen wisely; else, they become
a burden and lead the borrower to a disastrous situation.
8/10/2019 Comparative Study on Education Loan With Referance to Sbi & Abhyudaya Co Operative Bank
* (1% concession for full tenure of the loan, if interest is serviced promptly as and whenapplied during the moratorium period, including course duration#)
IT exemption under Section 80(E) in respect of interest paid in all Education Loans.
8/10/2019 Comparative Study on Education Loan With Referance to Sbi & Abhyudaya Co Operative Bank
Approved courses leading to graduate/post graduate degree and PG diplomasconducted by recognized colleges / universities recognized by UGC / Govt. / AICTE /
AIBMS / ICMR etc.
Courses like ICWA, CA, CFA etc.
Courses conducted by IIMs, IITs, IISc, XLRI. NIFT,NID etc.
Regular Degree / Diploma courses like Aeronautical, pilot training, shipping, etc.,
approved by Director General of Civil Aviation / Shipping, if the course is pursued inIndia.
Approved courses offered in India by reputed foreign universities.
The above list is indicative in nature. Bank may approve other job oriented courses
leading to technical / professional degrees, post graduate degrees / diplomas offered by
recognized institutions under this scheme
Studies Abroad:-
Graduation: For job oriented professional / technical courses offered by reputed
universities.
Post graduation: MCA, MBA, MS, etc.
Courses conducted by CIMA-London, CPA in USA etc.
Degree / diploma courses like aeronautical, pilot training, shipping etc provided these
are recognized by competent regulatory bodies in India / abroad for purpose of
employment in India / abroad.
8/10/2019 Comparative Study on Education Loan With Referance to Sbi & Abhyudaya Co Operative Bank
One can avail an education loan if he is an Indian citizen and already have a confirmedadmission in an institute. Banks usually look for reputed institutes and courses that
promise good job.
Date : 20th July 2014
Education loans double in 2013-14, home loans drop - Piyush Mishra.The Times of India
As more and more students continue to opt for higher studies, the request for educationloans grew by almost double in 2013-14 compared to previous year.
Banks have disbursed education loans to 20,115 students to the tune of Rs 372.60
crores in 2013-14 by March 2014 compared to Rs 241.23 crore disbursed to 10,887
beneficiaries in 2012-13. The outstanding under education loans reached Rs1438.59
crore in 50,656 accounts as of March, 2014.
On the contrary, due to slowdown in real estate and higher interest rates, demand for
home loans saw a drop of 26% as less people applied for them. Home loans worth Rs7028.95 crore were granted to 81,556 beneficiaries during the year 2013-14 under
direct housing finance compared to disbursement of Rs 7426.44 crore of loans to