Eduction Sbi
Eduction Sbi
Eduction Sbi
1. INTRODUCTION TO BANKING
2. NEED OF BANKING
4. ORGIN OF BANK
5. IMPORTANTS OF BANKING
6. BANKING SYSTEM
1. INTRODUCTION TO BANKING
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Finance is a life blood of trade, commerce and industry. Now-a-days banking sector
act as a backbone of modern business. Development of any country mainly depends
upon banking system
The term bank is derived from Italian word banca or from a French word banque.
In olden days, European money lenders used to display coins of different countries in
big quantity for the purpose of lending or exchanging.
The bank also offers investments and insurance products. Bank is the financial
institution and a financial intermediary that accepts deposits and channels those
deposit into lending activities, either directly by loaning or indirectly thorough capital
markets. a bank may defined as an institution that accepts deposits, markets loans,
pays checks, and provides financial services. A banks is financial intermediary loan
the safeguard , transferring, exchange, or lending of money. A primary role of banks
is connecting those with funds, such as investors and deposits to those seeking funds
such as individuals or business needing loans, A bank is the connections between
customer that have capitals deficits and customers with capitals surplus.
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The services banks offer to customers have to do almost entirely with handling money or
finances for other people. Banks are critical to our economy.
The primary function of banks is to put their account holders' money to use by lending it out
to others who are in need of the same.
This system is also known as “Barter System” and an age-old method that was
adopted by people to exchange their services and goods. Roman soldiers were
sometimes paid in salt, because it was critical to life and was a scarce commodity at
those times.
When you have money, a bank can act as your agent for using or protecting that
money. Modern banking in India originated in the last decade of the 18th century.
Among the first banks. were the Bank of Hindustan, which was established in 1770
and liquidated in 1829–32; and the General Bank of India, established in 1786 but
failed in 1791.
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The largest and the oldest bank which is still in existence state bank of India.
(S.B.I). It originated and started working as the ban in mid-June bank of Culcuata
1806. In 1809, it was renamed as the bank of Bangal. This was one of the three banks
found presidency government the other two were the bank of Bombay in 1840 and the
bank in 1843.
The three banks were merged in 1921 to form the imperial bank of India, which
upon India's independence, became the state bank of India in 1955. For many years
the presidency banks had acted as quasi-central banks, as did their successors, until t
reserve bank of india was established in 1935, under the reserve bank of India.
In 1960, the State Banks of India was given control of eight state-associated
banks under the State Bank of India (Subsidiary Banks) Act, 1959. These are now
called its assiociate bank In 1969 Indian government nationalished 14 major private
banks; one of the big banks was bank of india. In 1980, 6 more private banks were
nationalised.[8] These nationalised banks are the majority of lenders in the . Indian
economy They dominate the banking sector because of their large size and
widespread networks.[9]
Definition
As per section 5 (b) of the banking regulation act 1949. "Banking" means the
accepting, for the purpose of lending or investment, of deposits of money from the
public, repayable on demand or otherwise, and withdrawal by check, draft order or
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otherwise. Banking can be defined also the business activity of accepting and
safeguarding money owned by other individuals and entities, and then lending out this
money in order to earn a profit.
However, with the passage of time, the activities covered by banking business
have widened and now various other services are also offered by banks. The banking
services these days include issuance of debit and credit cards, providing safe custody
of valuable items, lockers, ATM services and online transfer of funds across the
country / world.
2. NEED OF BANKING
Before the establishment of banks, the financial activities were handled by money
lenders and individuals. At that time the interest rates were very high. Again there
were no security of public savings and no uniformity regarding loans. So as to
overcome such problems the organized banking sector was established, which was
fully regulated by the government. The organized banking sector works within the
financial system to provide loans, accept deposits and provide other services to their
customers. The following functions of the bank explain the need of the bank and its
importance: To provide the security to the savings of customers. To control the
supply of money and credit To encourage public confidence in the working of the
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Banking in India is originated in the last decades of the 18th century. The first
banks were bank of Hindustan (1770-1829) and the general bank of India, established
in 1786.
The largest bank, and the oldest bank still in existence, is the state bank of India,
which originated in the bank of Calcutta in June 1806 which almost immediately
becomes the bank of Bengal. This was one of the three presidency banks, the other
two being the bank of Bombay and the bank of madras, All three were established
under chartered from the British east India, after India’s independence, become the
state bank of India in 1955. For many years the presidency banks acted as quasi-
central banks, until the Reserve Bank of India was established in 1935.
In 1969 the Indian government nationalized all the major banks that it did not
already owned and these have remained under government ownership. They are run
under a structure known as "Profit Making Public Sector Undertaking" and are
allowed to complete and operate as commercial banks
4.ORIGIN OF BANKS
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The first bank was probably the religious temples of the ancient world were gold
was stored in the form of easy-to-carry compressed plates. Their owners justly felt
that temples were the safest place to store their as were constantly attented, well build
and were sacred, thus deterring would-be thieves. There are extent records of loans
from the 18th century BC in bebylon that were made by temple priests to merchants.
The origin of banking In India can be traced back to almost to the Vedic
period. The transformation from pure money lending to proper banking appears to
have taken place before the times of menu. Manu a great Hindu jurist, had devoted a
section of his work explaining the deposits and advances and he even laid down
certain rules on rates of interest.
Through out mauruyan period and later on desi bankers played some
role in the economy of the country. However, it was during the Moghul period that
indigenous bankers started playing a vital role in lending money and financing of the
foreign trade and commerce.
The structure of banking system differs from country to country depending upon their
economic conditions, political structure, and financial system. Banks can be classified on
the basis of the volume of operation business pattern and areas of operations. They are
termed as a system of banking. The commonly identified systems are:
Unit Banking
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Unit banking is originated and developed in the U.S.A. In this system, small independent
banks are functioning in a limited area or in a single town . It has its own board of
directors and stockholders. It is also called as “localized Banking”.
Branch Banking
The Banking system of England originally offered an example of the branch banking
system, where each commercial bank has a network of branches spread throughout the
country.
Correspondent Banking
The correspondent banking system is developed to remove the difficulties in the unit
banking system. The smaller bank deposit their cash reserve with bigger banks.
Therefore, correspondent banks are intermediaries through which all unit banks are
linked with bigger banks in financial centers. Through correspondent banking, a bank
can carry-out business transactions in another place where it does not have a branch.
Group Banking
Group Banking is the system in which two or more independently incorporated banks
are brought under the control of a holding company.The holding company may or may
not be a banking company. Under group banking, the individual banks may be unit
banks, or banks operating branches or a combination of the two.
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Relationship Banking
It refers to the efforts of a bank to promote personal contacts and to keep continuous
touch with customers who are very valuable to the bank. In order to retain such
profitable accounts with the bank or to attract new accounts, it is necessary for the bank
to serve their needs by maintaining a close relationship with such customers.
Narrow Banking
A bank may be concentrating only on the collection of deposits and lend or invest the
money within a particular region or certain chosen activity like investing the funds only
in Government Securities. This type of restricted minimum banking activity is referred to
as ‘Narrow Banking’.
Universal Banking
As Narrow Banking refers to restricted and limited banking activity Universal Banking
refers to broad-based and comprehensive banking activities.
Regional Banking
In order to provide adequate and timely credits to small borrowers in rural and semi-
urban areas, Central Government set up Regional Banks, known as Regional Rural
Banks all over India jointly with State Governments and some Commercial Banks.
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of regional banks in rural and semi-urban centers under private sector known as “Local
Area Banks”.
Wholesale Banking
Private Banking
Retail Banking
Retail banking is a major form of commercial banking but mainly targeted to consumers
rather than corporate clients. It is the method of banks’ approach to the customers for
sale of product.
Law of banking
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The law implies rights and obligations into this relationship as follows: • The bank
account balance is the financial position between the bank and the customer: when the
account is in credit, the bank owes the balance to the customer; when the account is
overdrawn, the customer owes the balance to the bank. • The bank agrees to pay the
customer's cheques up to the amount standing to the credit of the customer's account,
plus any agreed overdraft limit. • The bank may not pay from the customer's account
without a mandate from the customer, e.g
. cheques drawn by the customer. • The bank agrees to promptly collect the
cheques deposited to the customer's account as the customer's agent, and to credit the
proceeds to the customer's account.
The bank has a right to combine the customer's accounts, since each account is
just an aspect of the same credit relationship. The bank has a lien on cheques
deposited to the customer's account, to the extent that the customer is indebted to the
bank.
The bank must not disclose details of transactions through the customer's
account—unless the customer consents, there is a public duty to disclose, the bank's
interests require it, or the law demands it. The bank must not close a customer's
account without reasonable notice, since cheques are outstanding in the ordinary
course of business for several days. These implied contractual terms may be modified
by express agreement between the customer and the bank. The statutes and
regulations in force within a particular jurisdiction may also modify the above terms
and/or create new rights, obligations or limitations relevant to the bank-customer
relationship.
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The primary function of bank is also known as banking function. Thr are the main
function of a bank. These primary functions of banks are explained bellow:
1. Accepting Deposits
The banks collect deposits from the public. These deposits can be of different
types:-
A. Saving Deposits:-
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Habit among the public. The rate of interest is low. At present it is about 4% p.a this
account is suitable for salary and wages earners. This account can be opened in single
name or in joint names.
B. Fixed deposits:-
Lump sum amount is deposited at one time for a specific period. Higher rate of
interest is paid. Withdrawals are not allowed before the expiry of the period.
C. Current Deposits:-
D. Recurring Deposit.
This type of account is operated by salaried persons and petty traders. A certain
sum of money is periodically deposited into the bank. Withdrawals are permitted only
after the expiry of certain period. A higher rate of interest is paid.
The bank advances loans to the business community and other members of the
public. The types of banks loans and advances are;
A. Overdraft:-
B. Cash Credit.
The client is allowed cash credit up to a specific limit fixed in advance. It can be
given to current account holders as well as others who do not have an account with
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bank. Interest is charged on the amount withdrawn. The cash credit is given against
the security of tangible assets or guarantees and these advances given for a longer
period.
C. Loans:-
Loans are of short term i.e. for one year, medium term for five years and long term
for more than five years. Repayment of money can be in the form of installments or in
a lump sum amount. Interest is charge on the actual amount given, whether withdrawn
or not.
The bank can advance money by discounting the bill of exchange both domestic
and foreign bills. The banks pay the bill amount to the drawer by deduction usual
discount charges. On maturity, the bill is presented to the drawer or acceptor of the
bill and the amount is collected.
1. Agency functions:-
The bank act as an agent of its customer. The bank performs a number of agency
functions which includes;
A. Transfer of Funds:-
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The bank transfer funds from one branch to another or from one place to another
place.
B. Collection of Checks:-
The bank collects the money of the cheques through clearing sections of its
customers. The bank also collects money of the bills of exchange.
C. Periodic Payments:-
D. Periodic collection:-
The bank collects salary, pension, dividend and such others periodic collections on
behalf of the clients.
Banks issue drafts for transferring money from one place to another. It also issues
letter of credit, especially in case of import trade. It also issues travelers cheques.
B. Locker Facility:-
The bank provides a locker facility for the safe custody of valuable documents,
gold ornaments and other valuables.
C. Underwriting of Shares:-
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The bank underwrites shares and debentures through its merchant banking
division.
1 Scheduled Banks
.2 Non-Scheduled Banks
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1 Scheduled Bank:
A scheduled bank is a bank that is listed under the second scheduled of the
Reserve Bank of India Act, 1934. Under this schedule of the RBI Act, banks have to
fulfill certain conditions such as having a paid up capital and reserves of at least 0.5
million.
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Scheduled banks are further classified into commercial and cooperative banks.
The basic difference between scheduled commercial banks and cooperative banks are
Scheduled commercial banks are categorized into the five groups based on their
ownership or their nature of operations. State bank of India and its six associates are
recognized as a separate category of scheduled commercial banks, because of distinct
statutes that govern them.
Nationalized banks (10) and SBI and associates (7), together from the public
sector banks group and control around 70% of the total credit and deposits business in
India.
Schedule cooperative banks in India can be broadly classified into urban credit
cooperative institution and rural cooperative credit institution. Rural cooperative
banks undertake long term as well as short term lending, credit cooperatives in most
states have a three tier structure (primary, district and state level)
.2 Non-Scheduled Banks:
Non-scheduled banks are also function in the Indian banking space, in the form of
local area banks (LAB). There were only 4 LABs operating in India. Local area banks
are banks that are set up under the scheme announced by the government of India in
1996, for the establishment of new private banks of a local nature, with jurisdiction
over a maximum of three contiguous districts.
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The financing of higher education in India fits well in the overall development
strategy and economic policy of the country. India's higher education sector evolved
and grew with the strong support of public funds during the period called Nehruvian
model of development. By and large, this model of development was applied across
all the Indian states. In fact, governments owned, established and operated educational
institutions everywhere. These institutes were funded by the government and charged
very nil or low fees and funds from the students. The scenario has changed drastically
during the last about a decade and half. As a result, the whole gamut of financing
higher education has changed in India, which gave a central role for the private sector.
Indeed, it had happened under the nose of new economic policy initiated since the
1990s. Numerous studies are available about the financing of education in the country
both during the pre- and post-reforms periods. It highlights the issues related to the
various aspects of educational financing such as the problems faced by educational
loan aspirants and financiers, role of Governments, educational institutions etc.
However, literature reviewed here are grouped into two different categories i.e.,
studies related to India and studies related countries other than India.
The cost of education has attracted researchers' attention at the very early stage. These
studies deal with the national education sector as well as that of the individual states
of the country.
Ravi F. H., (1960)1 had examined the pattern of expenditure on higher education
against the backdrop of economic development and opined that the proportion for
total expenditure allocated to higher education was much below the expected level of
investment and concluded that under financing create burden to the government and
higher education beneficiary groups.
Pillai and Nair (1962)2 made an attempt to study the history and problems of
educational finance in Kerala state. The study suggested that additional public
resources should be generated on large scale in order to finance the continuously
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rising demands for the education in the state at all levels. Even, the Education
Commission (1964-66) had strongly argued for devoting 6 per cent of GNP to the
education sector by taking into account the numerous parameters like cost of
education, teacher-student ratio, educational requirements of the country and
financing policies adopted in other countries.
Panchamukhi’s (1965)3 study estimated the total cost of education for the period
1950-51 to 1959-60 and concluded that total cost of education constituted 6.2 per cent
of GNP in 1959-60. The study also calculated the various components of private and
institutional costs of education, foregone earnings for males and females, village and
town pupil separately. The study estimated that foregone earnings constituted major
proportion of total factor cost of education. The total cost of education was found to
be between 5 per cent and 6.5 per cent of national income in 1960-61.
4
Pandit (1969) measured the unit cost of education and efficiency of educational
expenditure. The study illustrated the total cost of education into three categories such
as institutional cost, students' cost and opportunity cost.
In the study conducted by Shah (1969)5 analyzed the unit cost of higher education.
The study has divided the cost of education into two main components: (a) social cost,
(b) opportunity cost. Social cost is again divided into student cost and institutional
cost. In student cost, there is a possibility of double counting in fee and scholarship
because at one time it is the income of the institution and at the same time it is also the
part of institutional cost. Further, it is also found that there is different unit cost of
education of hostellers and day-scholars. Institutional cost can be divided into two
parts, recurring cost and non-recurring cost. In non-recurring cost, the main
components of cost are capital (land on rent and building) and equipment and in
recurring cost they are divisible and non-divisible. The study also suggests that the
recurring cost and expenditure should be done very carefully.
Rao (1969)6 discussed the economic aspect of the education. In order to study the cost
of education, he adopted several approaches. In one approach, the main component
was the cost borne by the students. In other approach, it has divided into three parts:
(i) institutional cost, (ii) student's cost and (iii) opportunity cost.
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Kulkarni's study (1969)7 also estimated the unit cost of education from the period
1962-66 at current prices. It showed that the change in pupil-teacher ratio affects the
unit cost of education. The decline in pupil-teacher ratio increases the workload of the
teachers in turn leads to higher teacher turnover ratio.
Sharma (1969)9 highlighted the significance of unit costs in the educational planning
process. The study considered the nature and different types of unit costs required at
different levels of education with special reference to Indian conditions, the nature of
available statistics, their coverage gap and their limitations. A method has been
developed to measure the cost per student at different levels. Various suggestions
were available for improvements in the methodology for the estimation of costs.
Mathur (1974)10, in his study on Kerala University during 1970-71, found that the
receipts from examination, which was initially a source of income, later became a
major item of heavy expenditure of the university. The expenditure on science
departments was nearly double than that of the funds spent on the humanities. The
expenditure on administration head alone was 19 per cent in 1970-71. And, over the
time period, overall expenditure of university increased by 17 per cent per year.
Jha (1974)11 while studying the financial behavior of the Patna University concluded
that government grants is the main source of finance. The study also noted that in
1964-65, the state government itself had faced a deficit of funds due to the lack weak
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tax collections. This situation reduced the flow of funds to the coffers of university.
The study also highlighted failure of the finance committee to function properly due
to the lack of financial rules.
12
Nigam (1975) examined the main source of finance of University of Rajasthan and
their relative importance. The study also dealt with adequacy of finance, expenditure
incurred under different heads, and difficulties faced by the university due to lack of
finance. The study found that per capita availability of educational facilities, in real
terms, does not fall either due to rise in enrollment ratio or inflation, which affects the
facilities of the supply of laboratories or libraries. It recommended the creation of
state level body like the UGC to settle financial issues in order to stabilize per capita
educational facilities in real terms.
Mukerjee’s (1976)14 study attempted to throw the light on the pattern of income and
expenditure of the Calcutta University. He found that the administrative expenditures of
the Calcutta University alone constituted about 30 per cent between 1948-49 and 1969-
70. The salaries to teachers cornered between 13.12 per cent and 18.76 per cent of
expenditure. The study illustrated that organization of trust and endowments funds to
finance university expenditure are the best option in the long run to sustain finances.
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Subrahmanyam (1982) 16 studied the financing pattern of the Andhra University and
found that its major sources of income (60 per cent) were the internal sources.
However, across the non-academic income sources, major contributors were the press,
publications, and interest on corpus fund.
Further, on the expenditure side, major proportion of funds was consumed by the
teaching departments (40 per cent to 69 per cent).
Azad (1984)17 critically analyzed the pattern of grants to the higher education sector in
Andhra Pradesh. The major sources of grants were the government grants, followed
by the revenue generated through fees and funds. It divides the pattern of state grants
into the general and professional education. In general education, major heads of
grants were the maintenance, building and equipment grants; while in professional
education, the maintenance and building grants constitute the major component.
Mathew (1991)19 analyzed, in detail, the source of funds of private colleges in Kerala
for the period 1972-86. The analysis was made on the basis of sample data collected
from 25 arts and science colleges spread over the state. The study found that, among
the institutional sources of finance, grants from the state constituted more than 90 per
cent. However, of the non-institutional sources of finance, donations emerged as the
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most important component of finance of private colleges in Kerala. The study called
for strengthening of the finances of colleges in the private sector.
Varghese (1991)20, in his research work illustrated that the cost-recovery from
beneficiaries implies a reduction in the public subsidies to higher education sector.
This could be done by shifting the incidence of financial burden either to the
beneficiaries (students) or to their users (employers). Student loans, graduate tax and
enhancing fees were other suggestions in this regard.
Jadhyala B.G Tilak (1992)21 described the details of the student loan scheme
prescribed in India, its strengths and weaknesses, and also suggested some marginal
improvements for the betterment of educational loans .
The study carried out by Sharma (1992)22 illustrated the major sources of funding of
university education in India. These sources are the central government, the state
governments, the University Grants Commission (UGC), the Indian Council of
Agriculture Research (ICAR) and other public and private agencies. The funds are in
the form of grants-in-aid, development assistance from the UGC and ICAR, fees and
funds, income from moveable and immovable property, and sale of university
publications and farm produce. The endowment funds were the sources of finance of
university institutions. Further, grants-in-aid made by the central, state and other
authorities to an institution to run their activities in order to improve them and to start
new programme for further development and growth. These grants were given to the
university institution in the form of (i) matching share of development grant by UGC;
(ii) grants in the form of committed expenditure under the non-plan heads by either of
the system, namely, the deficit grants or block grants.
Tilak and Varghese (1992)23 studied the student loan scheme in India and considered
some of its problems. They made a detailed comparison between loan and other
alternatives methods of funding higher education in India.
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Natrajan (1995)26 analyzed the source of finance of university education and also the
use of funds. The analysis shows that the major sources of finance of universities were
the government grants, followed by fee income, and other sources. Development
grants were found to be spending both on capital and recurring items. Academic costs
absorbed the major proportion of total expenditure of the university. Among academic
fee income, examination related work entails major proportion of total expenditure. At
the same time, income from the endowments is decreasing. The study provides the
purposewise classification of income of the universities and suggests ways and means
to overcome the shortage of finance.
The research done by Dutt (1995)27, while estimating the various source of financing
of higher education for the period 1960-61 to 1976-77, showed that the government
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funds (central, state, UGC, etc.) was the major source of finance. These funds
constituted 75 per cent of the total cost per student, followed by 13 per cent by the
fees. However, endowments and other sources cornered low share of 12 per cent.
Further, source-wise income per student at the university level, subsidy to education at
various levels, and recovery rates at different level of education has also been
evaluated. The analysis of 12 colleges of Delhi University shows that fee accounted
for only 5 per cent of total cost per student and the balance of 95 per cent was
contributed by the government/UGC and some receipts from the private trusts. The
subsidy per student was estimated to be equal to ₹ 4, 744.
Majumdar Committee (1999)29, while analyzing the fiscal implications, came to the
conclusion that enhancing the share of investment to 6 per cent of the GNP would be
sufficient to provide adequate resources at all levels of the education system.
Joy Job Kulavelil (2000)30 has analyzed the objectives and nature of higher education
and resources mobility through funding diversification in Kerala private colleges and
made a comparison with some of the public colleges in Kerala. He criticized the idea
of financing higher education which is financed out of indirect taxes paid by the
disadvantaged group.
31
Raman Pillai T.N (2000) criticized the wrong financial management practices, the
manner in which grants are sanctioned and utilized, its allocation, release,
admissibility, non-admissibility and other related matters to sublimate government
support. It is suggested that the crisis can be eliminated with the participation from
various supportive and related industries, financial institution, or private agencies.
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32
Varghese (2000) , advocates that the case for enhancing individuals’ contributions
to the rising costs of education and cautions against the use of marketing mechanisms
for raising educational resources due to their adverse implications on equity. The
principles on which public provision on higher education rests include its public good
nature having strong externalities and its merit good nature, as well as consideration
of equity and equality of opportunity.
Chauhar C.P.S (2000)33 has studied the extent of public and private funding. Most of
the money to maintain Universities at present is provided by the government from
public funds. He argued that the fee should be increased so as to cover at least 50 per
cent of the cost of general education.
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1. For collection of data, bank visit was done to SBI Badlapur west branch
2. Questionnaire was filled by the bank manager as research tool for collection of
primary data.
scope
research scope is only one bank of the state bank of india (SBI).
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LIMITATION
There are some limitations in this research these limitations are as follows time
limitation .
Many banks provide education loan but in this research only one banks are taken
for consideration.
Expenditure on research
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Data Analysis and presentation of the data in quantitative research is usually more
unsophisticated based on the fact that statistical measurements are being used. Tables
and charts are used for the presentation of the data and the report can be structured
around these exhibits. While in qualitative research, it seems to be more difficult.
When analyzing qualitative information, the researcher engages in an in-depth
investigation and subjectively interprets the data, in order to explain much of the
variation in the field of study.
In this study researcher has selected two banks i.e. SBI from public sector and HDFC
from private sector bank of Rajkot district of Gujarat State. In order to examine the
views of customers regarding Online Banking Services provided by the banks, two
types of structured questionnaire were designed for collection of the primary data.
II) The bank‟s customers; who are Non – Users of online banking
services.
Data has been collected from customers who were users and non – users of electronic
banking. Thus in accordance with the study the data collected was interpreted and
analyzed which include: to establish the relationship between technology and
service quality in banking industry and to determine the factors that lead to
customer preference of different electronic banking channels.
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classes.
Questionnaire was used to collect primary data from respondents. The questionnaire
was structured type and contained questions relating to different dimensions of
E-banking preferences among service class such as level of usage, factors influencing
the usage of E - banking services, benefits accruing to the users of E-banking
services, problems encountered. An attempt was also made to elicit reasons for its
non-usage with a structured questionnaire.
The sample size for Users of Online Banking Services is restricted to 300
respondents. Out of them 135 customers of SBI and 165 customers of HDFC
In fact, effective use of online banking services is essential in today‟s advanced era to
save time and money. To study the adoption aspect of Online Banking Services, it
was decided to collect information and views from the Non-Users of Online Banking
Services.
While for Non – Users the sample size is restricted to 50. These customers were met
personally to get acquainted with their view-points related to need, uses, internet
connectivity, security of Online Banking Services, their general impression & training
status regarding Online Banking Services and their suggestions regarding any
technological advancement in Online Banking
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Services etc.
This enabled the researcher to get the mixed perceptions of the two groups in
the usage of various electronic channels.
In this study researcher has selected 300 respondents. Out of them 135 customers of
SBI and 165 customers of HDFC Bank who are actively using Online
Services.
PART - A
180
Distribution of Respondents
No. of % 165 No. of % No. of %
160
Respondents Respondents Respondents
140 125
125 45% 165 55% 300 100%
120
100
follows: -
80 SBI
60 HDFC
40
20
36
0
No. of Respondents
S ummariz ation of personal information of S B I and H D F C B ank ‟s respondents is as
EDUCATIONAL FINANCE BY SBI
Table 4.2: -
Distribution of Respondents on the Basis of Gender
SBI HDFC
Gender No. of % No. of % Total
Respondents Respondents
Male 108 20% 75 45.45% 183
Female 27 80% 90 54.55% 117
Total 135 100% 165 100% 300
120
108
Distribution on the Basis of Gender
100
90
75
No. of Respondents
80
60 Male
Female
40
27
20
0
SBI HDFC
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EDUCATIONAL FINANCE BY SBI
Table 4.2 represents total Male customers are 183 of which 108 belong to SBI and 75
belong to HDFC. While total female customers are 117 of which 27 belongs to SBI
and 90 belongs to HDFC. The respondent found that ratio of female customer is less
as compared to Male. It might be due to the differences in saving account schemes.
The chi-square values are used to test the significance of association between
two attributes. The results so obtained are tabulated based on their specific factors.
Expected Value
300
300
300
300
Table 4.2.1: -
Table Showing Calculation of X2 on Basis of Gender
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EDUCATIONAL FINANCE BY SBI
In order to test the hypothesis, researcher has used chi-square values to find the
significance of the responses attributed by the respondents. The summarized results of
the chi-square test values at 5 per cent level of significance are given below.
= (2-1) (2-1)
=1
X2 cal = 3.841531
Hence Rejected.
Table 4.3: -
Distribution of Respondents on the Basis of Age
On the basis of age, five categories were formed as shown in table 4.3. This category
shows the number of respondents according to their age groups in both the banks.
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EDUCATIONAL FINANCE BY SBI
40
30 30
30 SBI
22 23 22
HDFC
20 15 15
10
0
Below 21 21 – 30 31 – 40 41 – 50 Above 50
Interpretation
The above graph represents Age wise Analysis maximum respondents were from the
Age Group of 21 - 30 yrs for both the banks, thereafter maximum respondents were
from the age group of 31 – 40 for HDFC Bank and 41 – 50 for SBI Bank.
This shows us that there is a good awareness of E-Banking among the Youths.
Table 4.3.1: -
Table Showing Calculation of X2 on the Basis of Age
40
EDUCATIONAL FINANCE BY SBI
X2 =
X2 tab = n–1
= 5–1
= 4
X (0.05,4) = 9.4877
Hence Accepted.
Table 4.4: -
Distribution of Respondents on the Basis of Educational Qualification
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EDUCATIONAL FINANCE BY SBI
90 82
80
No. of Respondents
70 60
60
45
50
SBI
40 30 30
23 HDFC
30
15 15
20
10
0
Below Higher Graduate Post
Secondary Secondary Graduate
Interpretation
Table 4.4 indicates that all employees at SBI and HDFC Bank are highly qualified as
figure indicates that 30 respondents at SBI Bank; similarly 82 respondents at HDFC
Bank are Post Graduate. While 60 respondents form SBI and 45 respondents form
HDFC are Graduates. Rest employees belonged to Higher Secondary or below
secondary stream. This shows that employees in both banks are highly efficient and
knowledgeable.
Table 4.4.1: -
Table Showing Calculation of X2 Basis of Educational Qualification
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EDUCATIONAL FINANCE BY SBI
X2 tab =n–1
=8–1
=7
X2 (0.05,7) = 14.0671
Hence Rejected.
Table 4.5: -
Distribution of Respondents on the Basis of Occupation
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EDUCATIONAL FINANCE BY SBI
60 53
50
37
40
30
30 23 SBI
22 22
15 15 15 HDFC
20
10
0
Interpretation:
Table 4.5 indicates that majority respondents i.e. 53 respondents from SBI and 68
respondents form HDFC belong to Service class. While 30 respondents are from
business class and 37 respondents are Professionals. Thus we can say that Service
class people are actively using Online Banking Services from both the banks as
compared to other Occupations.
Table 4.5.1: -
Table Showing Calculation of X2 on the Basis of Occupation
44
EDUCATIONAL FINANCE BY SBI
X2 =
X2 tab = n–1
= 10 – 1
=9
X2 (0.05,7) = 16.9190
Table 4.6: -
45
EDUCATIONAL FINANCE BY SBI
51
50
38
40
32
30 30 30
SBI
20
HDFC
22
10 15
15
0 7
Less than
2 Lac 2 – 5 Lac 5 – 10
Lac Above 10
Lac None
Interpretation:
Table 4.6 reveals that according to the sample size of SBI & HDFC Bank; mostly
respondent are categorized under 02-05 Lacs of annual income i.e. 51 respondents
from SBI and 60 respondents of HDFC Bank comes under this category. Rest
majority belong to income category of Less than 2 Lacs. Here, above table depicts
that very few respondents in both the banks belongs from more than 10 Lacs annual
income i.e. 7 respondents of SBI and 15 respondent of HDFC Bank. It might be
because they are less interested to fulfill questionnaire due to their busy schedule and
they rarely visit branch, they generally operate their whole a/c activities through
Online Banking.
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EDUCATIONAL FINANCE BY SBI
Table 4.6.1: -
Table Showing Calculation of X2 on the Basis of Income
X2 =
X2 tab =n–1
= 10 – 1
=9
X2 (0.05,7) = 16.9190
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EDUCATIONAL FINANCE BY SBI
PART – B
Table 5.1:-
158
150 150 157
135 128
120 120
15 15 15 15 8
0 7 7
Yes No Yes No
SBI HDFC
Interpretation:
Table 5.1 reveals that both the banks are providing various kinds of Online Banking
Services to their customers and customers of both the Banks are well aware with all
these facilities. As above table illustrates that majority of respondents of both the
banks are well aware about ATM i.e. 135 and 158 respectively and Credit/Debit Card
services i.e. 128 and 157 respectively but are comparatively less aware about
MBanking and I - Banking it means Bank are required to educate their customers.
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EDUCATIONAL FINANCE BY SBI
Table 5.2:-
SBI HDFC
Services Yes % No % Yes % No %
ATM 127 94.07 08 5.93 150 90.91 15 9.09
M - Banking 105 77.78 30 22.22 120 72.72 45 27.27
I – Banking 113 83.70 22 16.30 135 81.82 30 18.18
Credit/Debit 112 82.96 23 17.04 135 81.82 30 18.18
Card
45
30 30 30
22 23 15
8
Yes No Yes No
SBI HDFC
Interpretation:
Table 5.2 reveals that both the banks are providing various kinds of Online Banking
Services to their customers and majority customers of both the Banks are using all
these facilities. As above table illustrates that majority of respondents of both the
banks are using ATM i.e. 127 respondents form SBI and 150 respondents of HDFC.
Where as the next majority use is of I – Banking form both the Banks i.e. 113 and 135
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EDUCATIONAL FINANCE BY SBI
respectively. On the other hand, customers of SBI Bank are giving importance for the
uses of Online Banking Services to save their time & money and willing to adapt
advanced IT technology of Banking Industry.
Table 5.3:-
1 (c) Table showing Usage Frequency of E-Banking Services
Duration SBI HDFC
IB % MB % IB % MB %
Less than 6 m 15 13.27 23 21.90 30 22.22 37 30.83
50
EDUCATIONAL FINANCE BY SBI
40 37 38
35
30 30 30
30
25 23 23 22 222223 22 23 SBI IB
SBI MB
20
15 151515 15 HDFC IB
15
HDFC MB
10 8
0
Less than 6 6 m – 1 Yr. 1 Yr. – 2 2 Yr. – 3 More than
m Yr. Yr. 3 Yr.
Interpretation:
Table 5.3 shows that a majority of i.e. 38 respondents of SBI are using I – Banking
since more than 3 years while 45 respondents from HDFC are using I – Banking since
1 year .On the other hand there are 37 respondents of HDFC are using M – Banking
since less than 6 months while a majority of 30 respondents of SBI are using M –
Banking since 1 year. We can observe that IB of both the banks aggressively used as
compared to M – Banking and additionally the usage of M – Banking is observed very
less. Both the banks need to educate and encourage customers for boosting the use of
M – Banking.
Table 5.4:-
(2) Table Showing Respondent’s view on Availing of any Difficulty
No. of Respondents %
YES 52 17.33
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EDUCATIONAL FINANCE BY SBI
NO 248 82.67
TOTAL 300 100
17%
83%
Interpretation:
The above table 5.4 shows that 17.33% of respondents face difficulty while using
online banking services and 82.67% of respondents do not face any difficulty. Thus
researcher can conclude that customers using online banking services are satisfied
with the services provided and are friendly with the usage process.
Table 5.4.1:-
Table Showing Stages of Solution 3 (a) If Yes then, Stage
of solution
LEVEL IB % MB %
HO Level 8 22.86 - -
Regional Office Level - - 8 27.58
Branch Level 14 40 - -
Customer Care Level 7 20 15 51.72
Problem not solved 6 17.14 6 20.70
Total 35 100% 29 100%
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EDUCATIONAL FINANCE BY SBI
Interpretation:
Table 5.4.1 shows that majority of problems of I - Banking are resolved at Branch
Level while majority problems of M – Banking are solved at Customer Care Level.
There are common respondents having problems with I – Banking as well as M –
Banking.
Table 5.5:-
4. Table Showing Respondents Opinion on Service Quality
No. of Respondents %
Public Sector 68 22.67
Private Sector 135 45
Both 97 32.33
Interpretation :
Table 5.5 shows that majority of 135 respondents feel that the service quality of
Private sector is highly appreciated.
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EDUCATIONAL FINANCE BY SBI
IB MB
1X5 2X4 3X3 4X2 5X1 Total 1X5 2X4 3X3 4X2 5X1 Total
a) 975 208 90 46 0 1319 1015 300 66 0 0 1381
b) 225 92 225 194 60 796 35 180 27 404 37 683
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EDUCATIONAL FINANCE BY SBI
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EDUCATIONAL FINANCE BY SBI
X2 Goodness of fit
Table: 5.6.2
=5–1
=4
X2 tab = 9.4877 X2
cal = 351.24
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EDUCATIONAL FINANCE BY SBI
X2 Goodness of fit
Table: 5.6.3
e = 4500 = 900
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EDUCATIONAL FINANCE BY SBI
=5–1
=4
X2 tab = 9.4877 X2
cal = 473.25
6. Suitability of Services
The respondents were asked whether they agreed that the Internet was secure for
conducting online financial transactions. This questionnaire was focused on the extent
to which customers use the e-banking, their preferences while using banking products
and services. Respondents were also asked if their banks are providing them
guidance and sufficient support which is required for efficient e-banking usage.
For a clear delineation of their opinions, the question has been associated with a
5point Likert scale (1 = totally disagree, 2 = disagree, 3 = neutral 4 = agree, 5 =
totally disagree) and the results are centralized in Table No. 5.6.4.
Table: 5.6.4
Services PB IB MB PB IB MB PB IB MB
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EDUCATIONAL FINANCE BY SBI
Information
Transactions
c) Money Transfer 120 165 15 83 52 165 113 75 112
d) Immediate 135 105 60 37 135 128 135 83 82
Transactions
e) Time Consuming 60 165 75 53 135 112 195 7 98
Transactions
f) Pay Bills 37 158 105 30 157 113 233 15 52
g) Mobile Recharge 67 45 188 8 240 52 240 8 52
h) Investments 225 53 22 38 225 37 38 52 210
i)Savings 270 23 7 53 225 22 7 45 248
j)Pass Book Updating 195 105 0 105 165 30 30 45 225
Table: 5.6.5
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EDUCATIONAL FINANCE BY SBI
Conclusion:
It is reflected from the survey that ATM banking remains the most popular
banking service among customers after branch banking, mobile banking and
internet banking respectively as they provide convenience, privacy, security, ease of
use, real time accessibility, and accurate record of various transaction.
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EDUCATIONAL FINANCE BY SBI
Customers of private sector banks agree that there exist relationship between factors
such as age, gender, income, qualification and adoption of banking technology by
customers. Young generation belonging to a category of 30-45 years finds the
services comfortable, friendly and easy to use. Customers with post-graduate and
graduate qualifications are found to be mostly adaptors of IT banking services.
(II) Analysis of Questionnaire for Non Users of Online Banking Services Table
4.2.1: - Distribution of Respondents
Finance Corporation
Bank
(HDFC Bank)
Interpretation
The above graph represents that a majority of 60% customers belongs to SBI bank
while 40% belongs to HDFC. This represents that there is less awareness of online
baking services among the customers of SBI.
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EDUCATIONAL FINANCE BY SBI
Table 4.2.2: -
SBI HDFC
Gender No. of % No. of % Total
Respondents Respondents
Male 18 60 16 80 34
Female 12 40 4 20 16
Total 30 100 20 100 50
Interpretation
Table 4.2.2 represents total Male customers are 30 of which 18 belong to SBI and 16
belong to HDFC. While total female customers are 16 of which 12 belongs to SBI and
4 belongs to HDFC. The respondent found that ratio of female customer is less as
compared to Male. It might be due to the differences in saving account schemes.
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EDUCATIONAL FINANCE BY SBI
Table 4.2.3: -
On the basis of age, five categories were formed as shown in table 4.2.3. This
category shows the number of respondents according to their age groups in both the
banks.
Interpretation:
The above table represents that a 50% of customers were below 21 years of age and a
majority of 70% of customers belong to age group of 21-30. Being acquainted with
the technology plays a vital role in the usage.
Table 4.2.4: -
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EDUCATIONAL FINANCE BY SBI
Graduate 6 20 11 55
Post Graduate 20 67 9 45
Total 30 100 20 100
Table 4.2.5: -
Table 4.2.6: -
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EDUCATIONAL FINANCE BY SBI
PART - B
SBI HDFC
Services Yes % No % Yes % No %
ATM 42 84 8 16 15 75 5 25
M - Banking 26 52 24 48 10 50 10 50
I – Banking 28 56 22 44 15 75 5 25
Credit/Debit 33 66 17 34 15 75 5 25
Card
* Those respondents not having smart phones cannot avail these services.
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EDUCATIONAL FINANCE BY SBI
No. of Respondents %
Public Sector 10 20
Private Sector 10 20
Both 30 60
Total 50 100
1. INTRODCTION
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EDUCATIONAL FINANCE BY SBI
2. GENERAL INFORMATION
8. HOLIDAY PERIOD
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EDUCATIONAL FINANCE BY SBI
1. INTRODUCTION
brighter in future. To ensure that no deserving student is denied education for want of
fund.
The government is promoting education loan in a big way. The basic aim or idea
behind education loan is to bring education within the reach of students and help them
improve their prospects in life. The sum of money is offered by the third party
guarantee can come from an uncle, neighbor or friend standing guarantee for the full
amount of the loan.
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EDUCATIONAL FINANCE BY SBI
2. GENERAL INFORMATION
The exact rate of interest for education loan defers from one bank to other bank.
However, it usually varies from 10 to 15 percent. Apart from the fee of the course. A
list of other expense is also covered by education loan. However, the list depends
upon the bank from which you are taking the loan. Education loan can be offered at
fixed as well as floating interest rates. While applying for education loan you will
have to pay a percent of loan amount, as processing fee. In most of the cases, the
entire fee for a cource is not financed by the bank.
In this twenty-first century, the value of education has taken on a whole new
meaning. Education is an important tool that contributes to several aspect of a
person's life in order to take advantage of what have been learn and how to
productively it in either personal or professional life. Being educated is something
that always being looked at as a positive achievement that feels good and looks good
on a resume.
A proper education is almost accrued some one of making more money in their
lifetime. so no wonder what, education is the key that allows people to move up in the
world, better jobs and ultimately succeed fully in life.
Quoted from john Adams, "There are two types of educations" one would teach
us how to make a living, and the other how to live. Two types of education that
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EDUCATIONAL FINANCE BY SBI
basically exposed to the world are formal education and informal education, which
are seems to be familiar to us. Formal education is the room based education provide
by trained teacher. Informal education happens outside the classroom, in aft school
program, community based organization, museums, libraries, or at home.
Both formal and in formal education setting after different strength to the
education outreach project. Formal education needs to meet the educations standard
and sticks to the specific curriculum, On the other hand informal education can be
more flexible with their content. However, both formal and informal education is
essential to everyone.
. This type of undergraduate student loan includes your tuition fees, previous
school fees, living expenses, books and other expenses like transportation cost. While
the funds are sending directly to the students, the loanbazaar.com also offers
competitive interest rates and flexible repayment terms, The repayment can also begin
after graduation. With quick application process and easy to fill up application form,
getting could not get any simpler.
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EDUCATIONAL FINANCE BY SBI
Graduates or professional students loan are basically suitable for students who
higher or advance degrees of national wide colleges. These are types of unsecured
loans offered by loanbazaar.com to be used for education related expenses. This loan
is replayed after the completion of preferred education.
Career education loan are basically available for students who are attending the
undergraduate career oriented programs at national wide colleges and technical and
training schools.
And what’s more, you do not even have to keep collateral and do not have to sell
away your homes, investment money for the school and colleges fees of your child.
This type of undergraduate’s student’s loan includes your tuition, previous school
fees, living expenses, books and other expenses.
5. K 12 Parents loans
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EDUCATIONAL FINANCE BY SBI
. The type of k 12 parent’s loan includes your child tuition fees, uniforms, previous
school fees, living expenses, books and other expenses like transportation cost.
6. Private Loans
Private loans are those loans which are offered by the private financial firms and
organizations or schools. Often it happens that many students cannot qualify for
federal loan. In such cases, private loans come to their rise. Eligibility for the private
loans often depends on a student credit score.
Education loan can be taken to pursue a wide variety of courses, i.e. School,
graduation courses, like high school, B.sc, B.com, B.A etc. Post-graduation,
Specialized courses like M.B.A, M.C.A, B.E, M.E, B.TECT, M.B.B.S, etc and other
courses like computer courses, fashion designing, commercial pilot training, etc.
Mind however, that usually the courses financed should be for duration of more
than a year, i.e. 12 months.
Educational loans usually cover the costs of tuitions fees, hostel fees, mess fee
and examinations fees. Some banks may also finance the cost of books, equipments
and other instruments required by the student for those courses. For studies in abroad,
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EDUCATIONAL FINANCE BY SBI
Banks may provide one-way fare. But this needs to be checked with your individual
bank.
The security depends on the loan amount. There is no need of any security if loan
amount is less than 25,000 but if loan amount is greater than 25,000 than it would be
compulsory to provide security to take educational loan
. Usually bank takes a security in the form of National Savings Certificate (NSCs),
Bonds, Gold, House or property, etc in addition to these some banks might also
required the applicant to have life insurance policy equivalent to, or greater than the
loan amount.
8. HOLIDAY PERIOD
A holiday period is the maximum time given to the student before he or she
needs to start paying back the principal amount of loan in Equated Monthly
Installments (EMIs). In other words, it is the period between the student’s final
examination in the course for which the loan was taken and when he or she actually
starts paying the EMIs. Holiday periods range from 6 months to 12 months. And if the
student start working immediately after completing the course
. He does not enjoy a holiday period. Repayment of loan usually starts 6 months
after the course completion or the commencement of a job, whichever is earlier.
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EDUCATIONAL FINANCE BY SBI
The tax deduction not only allowed for courses perused in India but also allowed
for courses pursued outside the India as well. The deductions under section 80E are
allowed only if the education loan was taken for the purpose of higher education of
self or spouse or children or the student of whom the individual is the legal guardian.
1. PERIOD OF DEDUCTION
This deduction under section 80E is allowed to be claimed in the year in which
the individual starts paying the interest on education loan and in 7 succeeding years.
Thus, deduction is available for a maximum period of 8 years or until the interest is
repaid by the individual in full (whichever is earlier).
SCHEMES
1. INTRODUCATION OF SBI
74
EDUCATIONAL FINANCE BY SBI
EDUCATION LOAN
1. Introduction OF SBI
The origin of the State Bank of India goes back to the first decade of
the nineteenth century with the establishment of the Bank of Calcutta in Calcutta on 2
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EDUCATIONAL FINANCE BY SBI
June 1806. Three years later the bank received its charter and was re-designed as the
Bank of Bengal (2 January 1809). A unique institution, it was the first joint-stock
bank of British India sponsored by the Government of Bengal. The Bank of Bombay
(15 April 1840) and the Bank of Madras (1 July 1843) followed the Bank of Bengal.
These three banks remained at the apex of modern banking in India till their
amalgamation as the Imperial Bank of India on 27 January 1921.
Establishment
The establishment of the Bank of Bengal marked the advent of limited liability,
joint-stock banking in India. So was the associated innovation in banking, viz. the
decision to allow the Bank of Bengal to issue notes, which would be accepted for
payment of public revenues within a restricted geographical area. This right of note
issue was very valuable not only for the Bank of Bengal but also its two siblings, the
Banks of Bombay and Madras
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EDUCATIONAL FINANCE BY SBI
an innovation because the practice of accepting money for safekeeping (and in some
cases, even investment on behalf of the clients) by the indigenous bankers had not
spread as a general habit in most parts of India. But, for a long time, and especially up
to the time that the three presidency banks had a right of note issue,
bank notes and government balances made up the bulk of the investible resources
of the banks.
The three banks were governed by royal charters, which were revised from time
to time. Each charter provided for a share capital, four-fifth of which were privately
subscribed and the rest owned by the provincial government. The members of the
board of directors, which managed the affairs of each bank, were mostly proprietary
directors representing the large European managing agency houses in India.
The rest were government nominees, invariably civil servants, one of whom was
elected as the president of the board.
Business
Loans against goods like opium, indigo, salt woollens, cotton, cotton piece goods,
mule twist and silk goods were also granted but such finance by way of cash credits
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EDUCATIONAL FINANCE BY SBI
gained momentum only from the third decade of the nineteenth century. All
commodities, including tea, sugar and jute, which began to be financed later, were
either pledged or hypothecated to the bank.
Indians were the principal borrowers against deposit of Company's paper, while
the business of discounts on private as well as salary bills was almost the exclusive
monopoly of individuals Europeans and their partnership firms.
But the main function of the three banks, as far as the government was concerned,
was to help the latter raise loans from time to time and also provide a degree of
stability to the prices of government securities.
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EDUCATIONAL FINANCE BY SBI
India assumed from 1 March 1862 the sole power of issuing paper currency within
British India.
The task of management and circulation of the new currency notes was
conferred on the presidency banks and the Government undertook to transfer the
Treasury balances to the banks at places where the banks would open branches.
None of the three banks had till then any branches (except the sole attempt and
that too a short-lived one by the Bank of Bengal at Mirzapore in 1839) although the
charters had given them such authority. But as soon as the three presidency bands
were assured of the free use of government Treasury balances at places where they
would open branches, they embarked on branch expansion at a rapid pace.
By 1876, the branches, agencies and sub agencies of the three presidency banks
covered most of the major parts and many of the inland trade centers in India.
While the Bank of Bengal had eighteen branches including its head office,
seasonal branches and sub agencies, the Banks of Bombay and Madras had fifteen
each.
Imperial Bank
The Imperial Bank during the three and a half decades of its existence recorded
an impressive growth in terms of offices, reserves, deposits, investments and
advances, the increases in some cases amounting to more than six-fold. The financial
status and security inherited from its forerunners no doubt provided a firm and
durable platform.
But the lofty traditions of banking which the Imperial Bank consistently maintained
and the high standard of integrity it observed in its operations inspired confidence in
its depositors that no other bank in India could perhaps then equal.
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EDUCATIONAL FINANCE BY SBI
All these enabled the Imperial Bank to acquire a pre-eminent position in the
Indian banking industry and also secure a vital place in the country's economic life.
When India attained freedom, the Imperial Bank had a capital base (including
reserves) of Rs.11.85 crores, deposits and advances of Rs.275.14 crores and Rs.72.94
cores respectively and a network of 172 branches and more than 200 sub offices
extending all over the country.
1. Eligible Courses
a. Studies in India:
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EDUCATIONAL FINANCE BY SBI
5. Vocational Training and Skill Development Study Courses will not be covered
under the regular Education Loan Schemes. A separate scheme for ‘Loans for
Vocational Education and Training’ has been launched which covers financing
for such Vocational courses
b. Studies abroad:
2. Amount of Loan
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EDUCATIONAL FINANCE BY SBI
Interest Rates
For loans upto Rs.4 lacs 3.50% above Base Rate, currently 13.50% p.a.
Above Rs.4 lacs and upto Rs.7.50 lacs 3.75% above Base Rate, currently 13.75% p.a.
Above Rs.7.50 lacs 1.75% above Base Rate, currently 11.75% p.a.
* (1% concession for full tenure of the loan, if interest is serviced promptly as and
when applied during the moratorium period, including course duration)
4. Processing Fees
5. Repayment Tenure
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EDUCATIONAL FINANCE BY SBI
Repayment will commence one year after completion of course or 6 months after
Above Rs. 4 Lacs and upto Rs. 7.5 Lacs Upto 10 years
6. Security
Particular Security
Above Rs. 4 lacs to Rs. 7.50 lacs loan
*Third Party Guarantee can be replaced with
amount
Parent/Guardian as co-borrower provided the Gross
Annual Income of Parent/Guardian (co-borrower) as
given in latest Income Tax Return is 3 times of the loan
amount.
Above Rs. 7.50 lacs loan Parent/ Guardian as co-borrower and tangible
83
EDUCATIONAL FINANCE BY SBI
In case of married person, co-obligator can be spouse or the parent(s)/ parents-in-law
7. Documentation Required
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EDUCATIONAL FINANCE BY SBI
EDUCATION LOANS
Central Scheme for Interest Subsidy has been announced by Ministry of HRD for
providing interest on Education Loans during moratorium for technical and
professional courses for studies in India under the IBA Model Education Loan
Scheme for students from Economically Weaker Sections (EWS) with annual gross
parental/family income upto Rs. 4.50 lacs per annum from the academic year 2009-
10.
85
EDUCATIONAL FINANCE BY SBI
The subsidy is provided for the period of moratorium i.e. 12 months after completion
of the course or six months after getting the job
whichever is earlier as prescribed under the IBA Model Education Loan Scheme.
After the moratorium period is over, the interest on the outstanding loan amount shall
be paid by the student in accordance with the provisions of the Education Loan
Scheme.
The Ministry of HRD, Government of India has issued an Advisory to all the State
Governments requesting them to designate appropriate authority or authorities who
are competent to issue income certificates, based on economic index and not social
background for the purpose of this scheme. Banks shall implement the scheme based
on the notification of the certification authority by State Governments communicated
through District Level Consultative Committees (DLCCs). The DLCCs would be
given the list and the signatures of the competent authority to issue the income
certificate.
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EDUCATIONAL FINANCE BY SBI
The interest subsidy under the scheme shall be available to the eligible students only
once either for the first undergraduate degree course or the post graduates
degree/diploma in India. Interest subsidy shall however, be admissible for integrated
courses (graduate plus postgraduate).
Interest subsidy under this scheme shall not be available for those students once
they discontinue the course midstream, or who are expelled from the institutions on
disciplinary or academic grounds. However, the interest subsidy will be available only
if the discontinuation was due to medical grounds for which necessary documentation
to the satisfaction of the Head of educational institution will have to be given.
The Ministry of HRD has initiated the proposal to dematerialize the educational
awards/certificates, setting up of Depository for maintaining the records in
dematerialized form and providing service to the users. Banks can have online access
for verification process which would eliminate fraudulent practices like forging of
certificates and mark sheets
The scheme shall be implemented through Canara Bank, which is the Nodal Bank for
the Ministry of Human Resources Development
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The scheme shall be applicable from the academic year 2009-10 starting 1 st April
2009. The scheme shall be applicable only in respect of disbursements made by the
Banks on or after 1st April, 2009 for the academic year 2009-10, irrespective of date
of sanctioning. In case of loans sanctioned prior to 1.4.2009, for the courses
beginning prior to academic year 2009-10, the interest subsidy is available to the
extent of disbursements made after 1.4.2009.
1. Eligibility
Sanction of Term Loan to students (Indian Nationals) for pursuing higher education
in India in the Education Loans for Students securing admission in the country’s best
Engineering and Medical colleges, top B-Schools, Law colleges & other reputed
institutions
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2. Courses Covered
Regular full time Degree /Diploma Courses through entrance test/ selection process.
Full time Executive Management Courses like PGPX are also covered. No Certificate/
Part time courses are covered under this scheme.
Second Education Loan for further higher studies provided the institution and
cost of study fall within the criteria for Scholar Loans. Combined loam
amount should not exceed the maximum permissible loan amount under SBI
Scholar Loan Scheme.
No Security, only
Category With tangible collateral of full value and
Parent/ Guardian as co-
Parent/ Guardian as co-borrower
borrower
List A Rs. 20 lacs Rs. 30 lacs
List C Rs. 7.5 lacs Above Rs. 7.5 Lacs & upto Rs. 30 Lacs
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3. Expenses covered
Purchase of books/equipments/instruments
Purchase of computer/laptop
4. Repayment
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5. Documentation Required
6. Interest rates
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Introduction
Education loans in India have seen an increase over the past few years, as more and
more Indians are spending a higher amounts of money of education . The government
of India is doing its best to provide all its citizens access to the financial aid they
require to pursue the education they want. State Bank of India (SBI), India’s premier
lender is a big player in the education loan market and has various innovative and
interesting schemes for people seeking to study courses across the country and
abroad. SBI is known for providing individuals loans at very reasonable rates.
SBI recently launched its latest education loan scheme called SBI Global Ed-
Vantage. Under this scheme, individuals who are looking to pursue higher education
abroad will be be able to apply for loans through SBI. The scheme will cover courses
in science, technology, education, mathematics, management, and medicine from
institutions in the United States of America, United Kingdom, Australia, Canada,
Europe, Japan, Singapore, and Hong Kong.
The loan amount under this scheme will be between Rs.20 lakh to Rs.1.5 crore
for financing up to 80% of the cost of the course. The new scheme will give a 0.5%
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concession to female students. Students who take up this scheme will be given 6
months after completion of the course to begin the repayment of the loan.
listed below:
The processing fee per application under SBI Global Ed-Vantage is Rs.10,000.
The loans offered under this scheme are between Rs.20 lakh and Rs.1.5 crore.
The loans under this scheme are fully collateralized. Security equivalent of the
loan amount needs to be pledged to the bank.
The fee will be disbursed directly to the institution in which the individual is
looking to pursue studies.
SBI Global Ed-Vantage will finance up to 80% of the expenses of the course
with a margin of 20%. Scholarships will be included in the 20% margin.
Currently the interest rate on the SBI Global Ed-Vantage scheme is 10.75%
p.a.
Simple interest will be charged during the course and moratorium period.
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Tuition fee.
Cost of books/uniforms/instruments/computer.
Other expenses for completion of course, such as, study work tour, etc. This is
subject to the condition that these expenses do not exceed 20% of the total
tuition fees.
Loan Repayment:
Under the SBI Global Ed-Vantage scheme the individual will get 6 months post
completion of the course to begin repayment of the loan via Equated Monthly
Instalments (EMIs). Simple interest will be charged during the duration of the course
and the moratorium period. The moratorium period can last up to 15 years post
completion of the course
are:
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Photograph identity proof issued by the government of India, such as, Driving
License, Passport, Voter’s Identity, aadhar card etc.
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Deserving / meritorious students for pursuing higher educationin India and abroad.
2. Courses Eligible:
a. Studies in India:
Graduation, Post graduation including regular technical and professional
Degree/Diploma courses conducted by colleges/universities approved by UGC/
AICTE/IMC/Govt. etc
4. Vocational Training and skill development study courses will not be covered under
the Education Loan Scheme, A separate scheme for ‘Loans for Vocational Education
and Training’ has been launched which covers financing for such Vocational courses
b. Studies abroad:
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3. Student Eligibility:
1. Fee payable to college/school/hostel: Where the student will be making his own
boarding and lodging arrangements, the sanctioning authority is authorized to fund
boarding and lodging expenses on the basis of estimate submitted by the
student/parent, provided such expenses are not more than those charged by the
educational institution for boarders.
2. Examination/Library/Laboratory fee.
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4. Any other expense required to complete the course like study tours, project work,
thesis, etc. considered for loan is capped at 20% of the total tuition fees payable for
completion of the course.
7. Cost of a two wheeler up to Rs. 50,000 can be included in the expenses considered
eligible for finance where the loan amount is secured by a suitable third party
guarantee and/or tangible collateral security. Two wheeler can be necessary in some
cases where hostel and college are far apart
8. Premium of the insurance policy covering the life of the borrower for loan
Studies in India
6. Margin
5 %Studies Abroad: 15 %
are made.
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7. Security:
a) Up to Rs. 4 lacs
Co obligation of parents
No security
value, along with the assignment of future income of the student for payment of
installments. The security can be in the form of land/ building/ Govt.Securities/ Public
Sector Bonds/ Units of UTI, NSC, KVP, LIC policy, gold, shares/ debentures, bank
deposit in the name of student/ parent/guardian or any other third party.
8. Processing Charges:
loans.
2.For loans to students going abroad: All those students who approach us for an
education loan of more than Rs.4.00 lacs for studies abroad will be required to make a
deposit of Rs.5000/
3. Which will be adjusted against the contribution of margin money or the interest
payable on the loan, in case the loan is availed by the applicant. If the applicant does
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not avail the loan within a period of 4 months of sanction of the loan, theamount will
be forfeited.
9. Interest Charges:
1. 0.50% concession in interest rate for girl students availing Education Loans with
effect from 2nd March 2009
2. 1% concession in rate of interest to b provided for full tenure of the loan if full
interest is serviced during the moratorium period (including course duration). The
interest should be serviced promptly soon after application but not later than the
following month to avail the concession
the repayment starts and excess interest of 1% p.a. pertaining to the study period and
moratorium period should be refunded/ credited to the loan a/c.
5. Penal interest @ 2% to be charged for loans above Rs. 4 lacs for the overdue
amount and overdue period.
2. Limitations
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3. Documentation required
4. Eligibility criteria
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From primary and secondary data for education finance by SBI the following
observations and findings are detailed.
2. It can be observed that SBI (State Bank of India) provides various types of
educational finance like k12 parent’s loan, post graduate loan, graduates
loan, career parent’s loan, and college’s loans.
3. The research also suggests the basic criteria to be followed for availing education
loan facility.
1. Should be an Indian.
4. The research also covers the repayment criteria for various kinds of
loans.
3. 75% above base rate to 5.25% above base rate and present base rate is 10%
6. The research also covers the expenses covered in education loan like
tuition fees, books fees, hostel fees, exam fees, computer if required.
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9. The research also covers the maximum amount of loan that is study in
abroad RS. 10 lakhs, Study in India Rs. 20 lakhs.
10. The research shows that the maximum tenure period of loan is course
period addition to the 1 year, or six months after getting job.
2. LIMITATIONS
1. The duration for this study was very short for doing this project.
2. The study has been limited to one banking institution namely SBI.
3.DOCUMENTATION REQUIRED
Mark sheet of last qualification examination for school and graduation studies
in India.
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Statement of bank account for the last six months of borrower / parents.
Income tax assessment order, not more than two years more.
4.ELIGIBILITY CRITERIA
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FINDINGS
The analysis of the data collected from the respondents reveals the following
summary of facts and findings. The analysis reveals that the majority of the
respondents (80.05%) are male, the reason for the low proportion of female
cardholders is due to the lack of awareness among them. It is found that the majority
of the respondents (36.38%) using card come under the age group 31-40 years.
Further, it indicates that the post-graduates are the largest (40.14%) among 426
sample cardholders. The occupational status of the cardholders reveals that the
majority (62.68%) of the respondents were salaried class. The residential area-wise
classification of the respondents show that majority (83.33%) of them belong to
urban. Further, it indicates that the majority of the respondents (30.75%) who earn
less than Rs.15,000/= as monthly income. It reveals that the majority (75.82%) of the
respondents were got married and remaining 24.18 per cent unmarried. The most of
the respondents (96.71%) prefer electronic banking products for their banking
transactions. Further it is found that it is found that the majority (40.29%) of the
respondents prefer e-banking products because of convenience. The purpose of
choosing card reveals that the majority of the cardholders select card for the
convenience purchase, followed by interest free credit facility (20-50 days), no risk of
carrying cash and convenient for the options of the payment given by the banks. It is
found that 49.53 per cent of the respondents are influenced by the sales executive of
the study bank for the selection of card. It is found that the majority of the
respondents used their cards for cash withdrawals (27.63%), followed by the purchase
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of cloth (22.54%), and rest of the respondents regards to filling up petrol and diesel,
purchase of provision, travel assistance and other purposes. Out of the total of 426
respondents, 67.84 per cent are single cardholders and the remaining 32.16 per cent
are multiple banks’ cardholders (that is possessed more than one bank card). Further,
it implies that the card business was not so popular in the study area.
SUGGESTION
The following are the important suggestions made by the researcher to resolve the
various problems of card issuing banks and for the growth of card sales, satisfaction
of the cardholders and correct tuning of their future marketing strategy to improve
better performance. The card issuers should take necessary steps to improve the
awareness among female cardholders, higher age group, graduates and professionals,
businessmen, rural respondents, higher income group and unmarried cardholders for
their business growth in the area of study. It is suggested that the bankers may be
consider to issue more e-banking product of their respondents which was preferred for
their convenience in banking. The majority of the cardholders purpose of choosing the
card for purchase convenience and interest free on credit facility available.
It is suggested that the issuers should give some additional facility such as free
of their ATM charge for cash withdrawals, cash back offer and discount of retail
purchase made by cardholders for improving further sales and satisfaction of their
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cardholders. The majority of the respondents use single bank card, there is no much
competition of the card market
It is suggested that the issuing banks divisions should take necessary steps to
popularize their card business through effective advertisement campaign and sales
promotional measures for the growth of card sales. It is suggested that the ‘other
bank’ card division should take steps to improve their card market share which are
lesser proportion in the market.
It is suggested that the issuers should take necessary steps to handling or being
handled the problems dimensions of bank charges and bank transaction for increasing
further satisfaction and sales growth of card. The majority of SBI cardholders prefer
for shifting in future. It is suggested that SBI card division should adopt right
retaining strategy such as always be regularly touch with the cardholders, so that they
will know the cardholders behaviour, expectation and attitudes, and also offer
incentives, bonus and other benefit to retain their cards. Otherwise they may lose their
market share in the study area. Unsolicited cardholders were highly dissatisfied than
solicited.
It is suggested that the card division of banks should adopt right strategy to sell
their card only those who are willingness to buy. It is suggested that the card issuers
should take steps to improve their level of satisfaction among the cardholders through
personal attention should be given by the card issuing banks, as it creates a sense of
satisfaction and loyalty in the minds of the cardholders to avoid further to shift in
future to any other card issuing banks.
The majority of multiple carholders, male and unmarried respondents have more
option to shift in future. It is suggested that the card divisions should take appropriate
marketing strategy to introduce new products in which to attract multiple cardholders
need and their expectation in the competitive business environment especially suitable
for male and unmarried cardholders to retain them and avoid further to shift in future
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in the study area. The opinion’s of the respondents observed and suggested that the
card issuers should consider to take necessary action to waive transaction fee
collected by some of the merchant establishments, fee on cash payment at their bank
branches, levy of their own ATM charges for cash withdrawals. It is observed that
some of the abuses including sudden interest rate hikes and late payment fees, wrong
billing process which have added to unmanageable debts and dissatisfaction of
cardholders. It is suggested that the issuers should avoid sudden changes in interest
rate, late fee and wrong billing problems of their cardholders for satisfaction.
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CHAPTER 10 : CONCLUSION
A dignified education can change the entire life of a person, lending him towards a
successful 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.
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Financial institutions have made an education loan an easygoing task for the
applicant. 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 applicant convenience.
Student loans are great alternatives as compared to conventional loan. They not
only offer lucrative interest rates but also have easier terms and conditions. Majority
of nationalized banks generally do not ask for any security and charge no margins for
a loan amount up to Rs. 4lacs.
Another key benefit of these loans is the deferment of repayment. The borrower
is not required the loans while studying as the repayment 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 is 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
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BIBLIOGRAPHY
1. Alan Nasser and Kelly Norman(2011), “ The Student Loan Debt Bubble Curse
of the First Austerity Generation", Global Research.ca/Global Research.org accessed
on 30 June 2012
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7. Hua Shen and Adrian Ziderman (2008), “Student Loans Repayment and
Recovery:International Comparisons” Higher Education, Volume 3, 2009,
published by IZA
WEBLOGRAPHY
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http://www.technofunc.com/index.php/domain-
knowledge/banking-domain/item/what-is-a-bank
https://sbi.co.in/web/personal-banking/loans/education-loann
https://en.wikipedia.org/wiki/Literature_review
https://www.fresherslive.com/news/sbi-education-loan
http://shodhganga.inflibnet.ac.in/bitstream/10603/38118/11/11_
chapter%204.
QUESTIONARY
1) Yes
2 ) NO
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a) Voting card
b) Licence card
c) pan card
d) Aadhaar card
b) Alternative finance
c) Long term
d) None of these
a)5lakh
b) 2lakh
c) 7lakh
d) 10 lakh
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a)Yes
b) No
a) 5
b) 9
c) 6.25
d) 10
a) 15
b) 20
c) 30
d) 10
a) Tuition fees
b) Hostel charges
c) Food charges
d) None of these
10) What are the age is not for the availing loan ?
a) 45
b) 30
c) 70
d) 60
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