Rajiv Gandhi loan scholarship scheme:
Background:
The Rajiv Gandhi loan scholarship scheme is introduced by the Government of Karnataka to ensure that poverty and financial
constraints will not deny Higher education to the meritorious poor students. The objective of the scheme is to increase State’s gross
enrolment into higher education by mainstreaming underprivileged Rural and Urban students.  The scheme will  provide interest
subsidy for education loans upto the moratorium period on the loans taken by students belonging to economically weaker
section from scheduled banks for pursuing any of the approved courses of study in Government  Colleges and/or  Aided courses
in Private Aided Degree Colleges(for aided courses only).

The detailed features of Education Loan scheme is furnished below:
Objectives:
To increase admissions of students belonging to economically weaker section.
To provide financial assistance to meritorious students, subject to terms and conditions.
To extend the scheme to students belonging to economically weaker section whose annual family income less than Rs
250000/-.
To link Adhaar numbers of the student beneficiaries with their Bank accounts to keep track of the progress of the
students and to assist in recovery.

Eligibility:

Beneficiary should be an Indian National
Any student belonging to other State and studying in Karnataka is also eligible, subject to fulfilling of the other eligibility
criteria.
Should have scored not less than 50% marks in PUC or equivalent course and should have secured admission in any
Government First Grade Colleges/Aided Degree Colleges (for aided courses only) affiliated to Karnataka State
Universities.

Income criteria:

The benefit of the scheme would be applicable to those students belonging to economically weaker sections with an annual
gross parental/family income less than Rs.2.50 lacs per annum (from all sources). The student shall produce Income Certificate
issued by the jurisdictional Tahasildar as a proof of income to be eligible under the scheme.

The application for the loan under the scheme should be entertained and sanctioned by a Bank branch located in the Place of
Domicile or centre of the permanent address or current working place of his/her parents.  This helps the Bank in KYC compliance
& also help in the matter of future follow up after completion of studies by the student.

Expenses considered for loan:

Whatever definite and quantifiable educational expenses incidental to study like tuition fee, books, equipments, laptop, hostel
fees, study tour, uniforms etc., could be covered under the loan as it is.  As the tuition fee in case of courses covered by this
scheme is very low, there was a demand to include maintenance expenses as a major portion of finance.  As far as
maintenance expenses like food and stay expenses are concerned, it is clarified that expenses not exceeding 50% of total
annual loan amount i.e., an amount of Rs.2,500/- per month with a maximum cap of Rs.30,000/- per annum may be
sanctioned as living expenses.

Quantum of Loan:
Maximum quantum of loan eligible for coverage under the scheme shall be as below:

Period of Course Amount per year
Less than 6 months Rs.20,000/-
6 months but Less than 1 year Rs.40,000/-
More than one year but less than two years Rs. 100000/-
Above one year Rs. 60000 per year

Security:
No security or third party guarantee is required. However Parent(s)/Guardian to be taken as Co-borrower.

Margin: Nil


Rate of Interest:
As applicable to IBA model Education Loan scheme of the respective banks. Interest concession of 0.50% to be extended for girl
students

Eligibility for Interest Subsidy:
The subsidy is provided for the period of moratorium i.e., course period plus one year or six months after getting job, whichever
is earlier. After the moratorium period is over, the interest on the outstanding loan amount shall be paid by the student.
A student is eligible for interest subsidy only once either for diploma or degree or post graduate course. Interest subsidy is also
available for integrated courses (Degree+ Post Graduate degree).
Students who have discontinued, failed or dismissed on disciplinary grounds are not eligible for interest subsidy. However, those
who have left the course on medical grounds are eligible for interest subsidy subject to production of relevant records and
confirmation to the effect by the concerned educational institution.
Repayment Period:
The repayment of loan shall commence 6 months after securing the job or one year after completion of the course whichever is
earlier.

Maximum repayment period after moratorium shall be as below:
Loan amount Maximum repayment period
Upto Rs 50000/- 2 years
More than Rs 50000/- upto Rs 1,00,000/- 2 to 5 years
Above Rs 1,00,000/- 3 to 7 years

Appraisal/Sanction/ Disbursement      
The loan to be disbursed in stages as per the requirement/ demand. As far as possible, payment should be made on the basis of
documentary proof for incurring expenses viz., Invoice for laptop (where direct payment to supply should be made), college
transport bills, KSRTC bus pass, hostel fee receipt, bill/invoice for purchase of books etc. While, direct payment to the
vendors/agencies could be made wherever possible, reimbursement in respect of small/scattered expenses could also be
considered by the Bank.  The living expenses would be credited to student accounts on monthly basis.
The advance fee paid by the student at the time of admission may be reimbursed within a reasonable period of time. (before
commencement of second semester)
When the student fails in subsequent year or having backlogs in such cases If the College grants him/her admission for the
succeeding year then the Bank may release further loan.  For considering the loan under the Scheme, admission is the criteria.

Effective date:
The scheme is applicable from the academic year 2013-14. Loans sanctioned prior to 2013-14 shall not be eligible for interest
subsidy under the scheme.
Linking of Aadhar Number:
Where ever Aadhar number is available, the student shall produce the same for linking with the loan account.
Participating banks & mode of submission of application & role of college:
All Scheduled commercial banks can sanction loans under this scheme.
The bank branch for sanctioning the loan to a particular student is the one located in the Place of Domicile or current
working place of his/her parents.  This helps the Bank in KYC compliance & also help in the matter of future follow up after
completion of studies by the student.
However, a student need to submit his application (as per format vide Annexure - 1) to the Principal of the college where
is pursuing his studies. 
The Principal, after certifying the correctness thereof and also issuing the certificate for expenditure (as per Annexure - 2)
should submit the applications received at the college to the concerned Lead District Manager, who should send the
applications to the concerned branch. List of Lead District Manager is enclosed as annexure - 3 and same is also available
in the website of State Level Bankers Committee Karnataka http://slbckarnataka.in/.
The Lead District Manager should segregate the applications Bank-branchwise and arrange to send to the respective
branches under his area.
The concerned bank branch, which receives the application should arrange to comply with KYC norms and take a view on
sanctioning of the loan strictly as per the terms and conditions of the scheme.
Nodal Bank:
Vijaya Bank is the Nodal Bank for claiming the subsidy from Karnataka government on behalf of Schedule Commercial
Banks/Regional Rural Bank's.
Insurance coverage:
Loan to be covered under Single Premium Insurance and the amount to considered as part of the loan amount.

Disposal of interest subsidy claims:
The interest subsidy claims received from the Banks will be submitted to the Government of Karnataka on yearly basis or as
decided by Government of Karnataka.
Monitoring:
The Department of collegiate education shall monitor proper implementation and progress of the scheme.
DISCLAIMER: The responsibility of the content lies with
The Commissioner, Department of Collegiate Education
Bangalore - 01. Email: bngcce@kar.nic.in
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APPLICATION - CUM - PROCESS NOTE FOR EDUCATION LOAN UNDER RAJIV GANDHI LOAN SCHOLARSHIP SCHEME - GOK