PROJECT REPORT ON COMPARATIVE ANALYSIS THE STUDY OF EDUCATION LOAN SCHEMES OF PUBLIC SECTOR BANKS

Submitted in partial fulfillment of the requirements of Master of Business Administration Programme (Session -2010-12)

Submitted To: Mr. Rohit Bansal (Lecturer in MBA Deptt.)

Submitted by-: Sakshi Grover MBA- 4rd SEM Roll No- 46

VAISH COLLEGE OF ENGINEERING, ROHTAK

Affiliated to Maharishi Dayanand University, Rohtak

DECLARATION
I ,Sakshi Grover Roll no-46 of class MBA 1Vsemester of ENGINEERING,ROHTAK hereby declare the project VAISH COLLEGE OF COMPARATIVE entitled

ANALYSIS THE STUDY OF EDUCATION LOAN SCHEME OF PUBLIC SECTOR BANKS is an original work and same has not been submitted to any other institution for awards of any other degree partially or wholly. The interim report was presented to supervisor on ---------- and pre submission presentation was made on ----------. Feasible suggestions have been duly incorporated with supervisor.

(Counter singed) Signature of supervisor Forward By Director / Principal of Institute

(Signature Candidate)

ACKNOWLEDGEMENT

I deem it my proud privilege to express my indebtedness and sincere thanks to all those who have, in various ways, helped me in the successful completion of the project and without their invaluable help this project would not have been a reality. I am also extremely thankful to_________________ who was constant source of knowledge and inspiration at all levels throughout. I am also thankful to my friends for their great support during my project. Finally I express my most sincere gratitude to my parents and my family members for supporting and encouraging me to this challenging project. I deeply acknowledge the support and inspiration provided by my academic career.

CONTENTS

TITLE

Page No.

1. Introduction (a) About Education loan (b) About PNB Bank and SBI Bank (c) About PNB Bank and SBI Bank in education loan 2. Review of Literature 3. Research Methodology i) Significance ii) Objective of the project iii) Research Methodology iv) Limitations 4. Data Analysis & Interpretation 5. General findings i) Suggestions ii) Conclusion

Bibliography Annexure

INTRODUCTION

Education loans can augment the boundaries of what we can achieve

Education never ends it is not said without reason. We are educated all our lives and getting an education not only is a great achievement but something that gives you the tools to find

your own way in the world. Education is indispensable; little do we realize how much more it can bring to us in terms of worldly amplifications. Anyone can have propensity and the natural endowment for education. But one might not have the resources to finance their education. We certainly cant let l a c k o f r e s o u r c e s i m p e d e yo u f r o m a d v a n c i n g yo u r p r o s p e c t s t h r o u g h e d u c a t i o n . T h e n y o u accidentally stumble upon the word education loans. Loans for education we have never thought about it as a feasible arrangement. Education loans can open newer panoramas in regard to our education aspirations. Education loans are open to all people in all its myriad forms. Education loans can realize our education plans. We can strengthen our own future with education loans. An extensive range of student and parent loans are presented under the category of education loans. There are many types of education loans. Discerning about the types of education loans will help us in making the accurate decision. The single largest resource of education loans is federal loan. The two main federal education loan programs are the Federal Family Education Loan Program and the Federal Direct Loan Program. In the Federal Family Education Loan Program the bank, credit union or the school is the lender .While the federal direct loans program, the department of education is the lender. Private education loans are offered to people so that they can provide financial backup to their education plans. Private education loans are not endorsed by other government agencies but are provided by other financial institutions. Private education loans program are optimum for both under graduate and graduate studies. Formal education is requisite for futu re success. Though this is not a h a r d a n d f a s t r u l e , b u t education certainly helps you in gaining an upper hand. With universities getting expensive by each day an education loan will certainly give you an incentive to go ahead with your education plans. Each year while contemplating on your education plans the thought of finances almost invariably comes in. While working towards you degree, you are constantly plagued about paying for the education fees, books, and other living expenses. Education loans can provide funding for tuition fees, board and room, books computer, and even student travel. An education loan can help you with all these expenses. Education loans are sufficient enough to take care of all these expenses. If we have been forced to drop your education for any reason, we can still take up our education at any point of time irrespective of our age and also where we have left our education. T h e r e a r e n o s p e c i f i c e l i g i b i l i t y c r i t e r i a f o r e d u c a t i o n l o a n s . A n y p e r s o n w h o i s i n n e e d o f sponsorship for education can find an education loan that befits his or her financial necessity. L o a n a m o u n t o n e d u c a t i o n l o a n s v a r y w i t h t h e k i n d o f e d u c a t i o n y o u w a n t t o p u r s u e . T h e re payment options with education loans will similarl y accommodate your personal financial preferences. We can either repay interest amount while still in sch ool o r s i x m o n t h s a f t e r graduation. Education loans offer up to ten years for repayments. The refund alternatives one education loans also include deferment, forbearance and consolidation. WHERE EDUCATION LOAN HELP IN OUR LIFE The various sites one education loans can give you innumerable repayment options and monetary remuneration. Education loans will help you in planning your life after graduation. However, an education loan like every loan is a huge financial obligation. An education loans is generally the first substantial loan for most people and therefore the first major expense.

Do not be completely dependent on your education loans for the funding of our complete education. Try to apply for any other financial sustenance like university grants, scholarships, fellowships, work study programs and assistance ship and any other form of aid. This will certainly encourage a fluid dispensation of our education loans. We can start by going to the financial aid office in our school or university. It will provide us further insight to the kind of education loans, we must apply for. Education is an experience of life. It is so rewarding in itself that it helps you to manage almost everything in your life.

ABOUT PNB BANK

Punjab National Bank (PNB) is one of India's largest nationalized banks, with some 5,000 locations. The financial institution offers services in personal and corporate banking, including industrial, agricultural, and export finance, as well as international banking. Its personal lending services include loans for housing, autos, and education. PNB's diverse client list includes Indian conglomerates, small and midsized businesses, non-resident Indians, and multinational companies. The bank was established in Lahore in 1895 -- more than 50 years before the country was partitioned into India and Pakistan in 1947.

HISTORY
Punjab National Bank was registered on 19 May 1894 under the Indian Companies Act with its office in Antalkali Bazaar Lahore. The founding board was drawn from different parts of India professing different faiths and a varied back-ground with, however, the common objective of providing country with a truly national bank which would further the economic interest of the country. PNB's founders included several leaders of the Swadeshi movement

such as Dyal Singh Majithia and Lala HarKishen La Lala Lalchand, Shri Kali Prosanna Roy, Shri E.C. Jessawala, Shri Prabhu Dayal, Bakshi Jaishi Ram, and Lala Dholan Dass. Lala Lajpat Rai was actively associated with the management of the Bank in its early years. The board first met on 23 May 1894. Today, ironically the PNB Website is distorting history by claiming Lala Lajpat Rai to be the founding father, surpassing Rai Mul Raj and Dyal Singh Majithia. PNB has the distinction of being the first Indian bank to have been started solely with Indian capital that has survived to the present. (The first entirely Indian bank, the Oudh Commercial Bank, was established in 1881 in Faizabad, but failed in 1958.) PNB has had the privilege of maintaining accounts of national leaders such as Mahatma Gandhi, Shri Jawahar Lal Nehru, Shri Lal Bahadur Shastri, Shrimati Indira Gandhi, as well as the account of the famous Jalianwala Bagh Committee.

TIMELINE:

1895: PNB commenced its operations in Lahore. 1904: PNB established branches in Karachi and Peshawar. 1940: PNB absorbed Bhagwan Dass Bank, a scheduled bank located in Delhi Circle. 1947: At the Partition of India and the commencement of Pakistani independence, PNB lost its premises in Lahore, but continued to operate in Pakistan. PNB had already shifted its registered office from Lahore to Delhi in June 1947 even before the announcement of the Partition. 1951: PNB acquired the 39 branches of Bharat Bank (est. 1942); Bharat Bank became Bharat Nidhi Ltd. 1961: PNB acquired Universal Bank of India. 1963: The Government of Burma nationalized PNB's branch in Rangoon (Yangon). September 1965: After the Indo-Pak war the government of Pakistan seized all the offices in Pakistan of Indian banks. PNB also had one or more branches in East Pakistan (Bangladesh). 1960s: PNB amalgamated Indo Commercial Bank (est. 1933) in a rescue. 1969: The Government of India (GOI) nationalized PNB and 13 other major commercial banks, on 19 July 1969. 1976 or 1978: PNB opened a branch in London. 1986 The Reserve Bank of India required PNB to transfer its London branch to State Bank of India after the branch was involved in a fraud scandal. 1986: PNB acquired Hindustan Commercial Bank (est. 1943) in a rescue. The acquisition added Hindustan's 142 branches to PNB's network. 1993: PNB acquired New Bank of India, which the GOI had nationalized in 1980. 1998: PNB set up a representative office in Almaty, Kazakhstan. 2003: PNB took over Nedungadi Bank, the oldest private sector bank in Kerala. At the time of the merger with PNB, Nedungadi Bank's shares had zero value, with the result that its shareholders received no payment for their shares. PNB also opened a representative office in London.

2004: PNB established a branch in Kabul, Afghanistan. PNB also opened a representative office in Shanghai.

PNB established an alliance with Everest Bank in Nepal that permits migrants to transfer funds easily between India and Everest Bank's 12 branches in Nepal.

2005: PNB opened a representative office in Dubai. 2007: PNB established PNBIL - Punjab National Bank (International) - in the UK, with two offices, one in London, and one in South Hall. Since then it has opened a third branch in Leicester, and is planning a fourth in Birmingham. 2008: PNB opened a branch in Hong Kong. 2009: PNB opened a representative office in Oslo, Norway, and a second branch in Hong Kong, this in Kowloon. 2010: PNB received permission to upgrade its representative office in the Dubai International Financial Centre to a branch.

ABOUT EDUCATION LOAN IN PNB BANK

The Scheme enables all type of needy students viz., students of +2 stage, Graduation courses B.A., B.Com., B.Sc., etc., Post-Graduation courses, Masters in Ph.D; Professional courses, Engineering, Medical, Agriculture, Veterinary, Law, Dental, Management, Computer etc., Computer Certificate courses of reputed Institutes accredited to Department of Electronics or institutes affiliated to University; Courses like ICWA, C.A., CFA, etc., courses conducted by IIM, IIT, IISc, XLRI, NIFT, etc., Evening Courses of reputed Institutes; Diploma/Degree courses conducted by Colleges/Universities approved by UGC/Govt./AICTE/AIBMS/ICMR, etc., Courses offered by National Institutes and other reputed Private Institutes. Punjab National Bank is now offering concession in interest in education Loan Scheme. The concession in interest rates is available to new borrowers who will avail education loan from the bank w.e.f. 01.04.2007. The bank has taken this step to make education loan scheme more customer friendly thus facilitating aspirant students to avail education loan on comfortable & affordable terms. . Further, Interest is charged monthly on simple basis during the repayment holiday/moratoriumperiod & concession of 1% in rate of interest is also allowed provided the same is serviced regularly during study period. Punjab National Bank has tied up with Kotak Mahindra Insurance to provide life insurance cover for education loan borrowers.

The insurance would cover study period as well as repayment period, he said, adding in case of any mishap, the insurance company would take care of the loan repayment rather than the aggrieved parents.

ELIGIBILITY:
1. Student eligibility: Should be an Indian National. Secured admission to Professional / Technical courses through Entrance Test / Selection process. Secured admission to foreign University / Institutions. Student should have secured pass marks in the qualifying Examination for admission to Graduation Courses.

2. Expenses considered for Loan: Fee payable to College / School / Hostel Examination / Library / Laboratory fee.

Purchase of books / equipments / instruments / uniforms. Secured admission to foreign University / Institutions. Caution Deposit / Building Fund / Refundable Deposit supported by Institution Bills / Receipts. Travel Expenses / Passage money for studies abroad. Purchase of computers - essential for completion of the Course. Boarding and lodging expenses in recognised Boarding Houses / private accomondations Any other expense required to complete the course - like study tours, project work, thesis, etc. 3. Quantum of Finance Need based finance, subject to repaying capacity of the parents / students with margin and the following ceilings :For studies in India: Maximum Rs.7.50 lacs. For studies abroad: Maximum Rs.15.00 lacs.

4. Margin Upto Rs.4.00 lacs: - Nil. Above Rs.4.00 lacs: Studies in India 5% Studies Abroad 15% 5. Security Upto Rs.4.00 lacs: No Security. Above Rs4 lacs and Upto Rs 7.5 lacs: 3rd party guarantee acceptable to the Bank. Above Rs 7.5 lacs: Collateral Security of Suitable value or suitable 3rd party guarantee. 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 the student parent / guardian or any other third party with suitable Margin. The document should be executed by both the student and the parent/guardian.

6. Rate of Interest

up to Rs. 4 lacs BPLR+TERM PREMIA minus 1.25 Above Rs.4 lacs BPLR + TERM PREMIA+1% Term premia of 0.50% p.a. shall be added for repayment period of 3 years & above. The interest shall be debited monthly on simple basis during the Repayment holiday/ Moratorium period. Penal Interest @ 2% be charged for above Rs.4.00 lacs for the overdue amount and overdue period. 1% Interest concession for servicing of interest during the study period regularly is allowed at the time of start of repayment period of loan. 7. Repayment Repayment Holiday / Moratorium Courses period + 1 year OR 6 months after getting job, whichever is earlier.

Additional Benefits provided to the students by PNB

Reimbursement
of related expenses such as admission fee, monthly fee, Boarding and lodging expenses in recognized Boarding Houses etc. already incurred by way of loan taken from own sources (to meet the contingency) by the applicant, if claimed within 3 (three) months of such payment and before consideration of the loan by the Bank.

Second time education loan

can be sanctioned to the same student borrower for completion of next higher course.

Check List
While applying for the loan, the borrower is required to furnish the following information/papers:

Loan application on Bank's format. Passport size photograph Proof of Address (Permanent) / ID Proof. Proof of Age. Proof of having secured pass marks in last qualifying examination. Letter of admission in professional, technical or vocational courses.

Prospectus of the course wherein charges like Admission Fee, Examination Fee, Hostel Charges etc. are mentioned. Details of Assets & Liabilities of parents. s In case loan amount is above Rs.4.00 lacs: *. Particulars of Guarantors and details of their Assets & Liabilities. *. If immovable property offered as Collateral Security - copy of Title Deed, Valuation Certificate and Non-encumbrance Certificate from approved Lawyer of the Bank. Photocopy of Passport & Visa, in case of study abroad. Any other document/information, depending upon the case and purpose of the loan

ABOUT SBI BANK

State Bank of India (SBI)

(NSE: SBIN, BSE: 500112, LSE: SBID) is the largest banking and financial services company in India by revenue, assets and market capitalization. Its a state-owned corporation with its headquarters in Mumbai, Maharashtra. As of March 2011, it had assets of US$ 370 billion with over 13,000 outlets including 150 overseas branches and agents globally. Bank of Madras merged into the other two presidency banks, Bank of Calcutta and Bank of Bombay to form Imperial Bank of India, which in turn became State Bank of India. The government of India nationalized the Imperial Bank of India in 1955, with the Reserve Bank of India taking a 60% stake, and renamed it the State Bank of India. In 2008, the government took over the stake held by the Reserve Bank of India. SBI provides a range of banking products through its vast network of branches in India and overseas, including products aimed at non-resident Indians (NRIs). The State Bank Group, with over 16,000 branches, has the largest banking branch network in India. SBI has 14 Local Head Offices situated at Chandigarh, Delhi, Lucknow, Patna, Kolkata, Guwahati (North East Circle), Bhubaneswar, Hyderabad, Chennai, Trivandrum, Bangalore, Mumbai, Bhopal & Ahmadabad and 57 Zonal Offices that are located at important cities throughout the country. It also has around 130 branches overseas.

SBI is a regional banking behemoth and is one of the largest financial institutions in the world. It has a market share among Indian commercial banks of about 20% in deposits and loans.[3] The State Bank of India is the 29th most reputed company in the world. The State Bank of India is the largest of the Big Four banks of India, along with ICICI, Punjab National Bank and HDFC Bankits main competitors.[6]

HISTORY

On 30 April 1955, the Imperial Bank of India became the State Bank of India. The government of India recently acquired the Reserve Bank of India's stake in SBI so as to remove any conflict of interest because the RBI is the country's banking regulatory authority. In 1959, the government passed the State Bank of India (Subsidiary Banks) Act, enabling the State Bank of India to take over eight former state-associated banks as its subsidiaries. On 13 September 2008, the State Bank of Saurashtra, one of its associate banks, merged with the State Bank of India. SBI has acquired local banks in rescues. For instance, in 1985, it acquired the Bank of Cochin in Kerala, which had 120 branches. SBI was the acquirer as its affiliate, the State Bank of Travancore, already had an extensive network in Kerala

Non-banking subsidiaries
Apart from its five associate banks, SBI also has the following non-banking subsidiaries: 1. SBI Capital Markets Ltd 2. SBI Funds Management Pvt Ltd 3. SBI Factors & Commercial Services Pvt Ltd 4. SBI Cards & Payments Services Pvt. Ltd. (SBICPSL) 5. SBI DFHI Lt

Current Board of Directors

After the end of O. P. Bhatt's reign as SBI Chairman on 31st March, 2011, the post was taken over by Pratip Chaudhuri, who is the former Deputy Managing Director of the International Division of SBI. As on 4th August, 2011, there are twelve members in the SBI Board of Directors, including Subir Gokarn, who is also one of the four Deputy Governors of the Reserve Bank of India. The complete list of the Board members is: 1. Pratip Chaudhuri (Chairman) 2. Hemant G. Contractor (Managing Director) 3. Diwakar Gupta (Managing Director) 4. A Krishna Kumar (Managing Director) 5. Dileep C Choksi (Director) 6. S. Venkatachalam (Director) 7. D. Sundaram (Director) 8. Parthasarathy Iyengar (Director) 9. G. D. Nadaf (Officer Employee Director) 10. Rashpal Malhotra (Director) 11. D. K. Mittal (Director) 12. Subir V. Gokarn (Director)

Branches of S.B.I

State Bank of India has 172 foreign offices in 37 countries across the globe. SBI has about 25,000 ATMs (25,000th ATM was inaugurated by the then Chairman of State Bank Shri O.P. Bhatt on 31 March 2011, the day of his retirement); and SBI group(including associate banks) has about 45,000 ATMs. SBI has 21,500 branches, including branches that belong to its associate banks. SBI includes 99345 offices in India. India's number one ADB is in bellary i e State bank of India bellary ADB

Symbol and slogan

The symbol of the State Bank of India is a circle and not key hole and a small man at the centre of the circle. A circle depicts perfection and the common man being the centre of the bank's business. Slogans : "Pure banking nothing else

Loan to NTPC

On 8th July, 2011, SBI agreed to give a loan of Rs 10,000 crore to NTPC (National Thermal Power Corporation), making it the largest loan SBI had ever given to any single customer in its entire 200 year history. The loan had a "door-to-door" maturity period of 12 years, accompanied by a drawdown period of four years. An NTPC press release said at the time of the declaration of the loan that "The loan shall be utilized for financing the capital expenditure of ongoing and new projects." NTPC chairman at the time, Arup Roy Choudhury clarified that the loan amount would be used to add 128,000 MW capacity by the end of year 2032 (NTPC'c capacity at the time of the declaration of the loan was 34,584 MW)[13] Employees SBI has turned into the third-largest employer in India among listed companies after Coal India Limited(383,347) and Tata Consultancy Services(226,751).[15]

Recent awards and recognitions

Best Online Banking Award, Best Customer Initiative Award & Best Risk Management Award (Runner Up) by IBA Banking Technology Awards 2010 The Bank of the year 2009, India (won the second year in a row) by The Banker Magazine Best Bank Large and Most Socially Responsible Bank by the Business Bank Awards 2009 Best Bank 2009 by Business India The Most Trusted Brand 2009 by The Economic Times Most Preferred Bank & Most preferred Home loan provider by CNBC Visionaries of Financial Inclusion By FINO Technology Bank of the Year by IBA Banking Technology Awards SKOCH Award 2010 for Virtual corporation Category for its e-payment solution The Brand Trust Report[16]: 11th most trusted brand in India.

Term loan granted to Indian Nationals for pursuing higher education in India or abroad where admission has been secured. SBI Education Loan Amount of Loan

For studies in India, maximum Rs. 10 lacs Studies abroad, maximum Rs. 20 lacs

SBI Education Loan Interest Rates Loan Amount Loans upto Rs. 4.00 Lacs Loans above Rs. 4.00 Lacs and upto Rs. 7.50 Lacs Loans above Rs. 7.50 Lacs Rate of Interest 11.25% p.a. 12.75% p.a. 11.75% p.a.

An Interest Rate concession of 0.50% to Girl Student availing Student Loans Documents required for SBI Education Loan

Completed Education Loan Application Form. Mark sheets of last qualifying examination Proof of admission scholarship, studentship etc Schedule of expenses for the specified course 2 passport size photographs Borrowers Bank account statement for the last six months Income tax assessment order, of last 2 years Brief statement of assets and liabilities, of the Co-borrower Proof of Income (i.e. Salary slips/ Form 16 etc)

Repayment Tenure Repayment will commence one year after completion of course or 6 months after securing a job, whichever is earlier. Place of Study
Studies in India Studies Abroad

Loan Amount
Rs. 10.0 lacs Rs. 20.0 lacs

Repayment in Years
5-7 Years 5-7 Years

Period

Expenses considered for loan

Fees payable to college/school/hostel

Examination/Library/Laboratory fees Purchase of Books/Equipment/Instruments/Uniforms Caution Deposit/Building Fund/Refundable Deposit (maximum 10% tution fees for the entire course) Travel Expenses/Passage money for studies abroad Purchase of computers considered necessary for completion of course Cost of a Two-wheeler upto Rs. 50,000/

STATE BANK OF INDIA IN EDUCATION LOAN

State Bank of India offers term loan facility to Indian Nationals for pursuing higher education in India or abroad where admission has been secured.

Course Eligibility
All courses having employment prospects are eligible. Graduation courses/ Post graduation courses/ Professional courses other courses approved by UGC/Government/AICTE etc.

Expenses Covered
Fees payable to college/school/hostel Examination/Library/Laboratory fees Purchase of Books/Equipment/Instruments/Uniforms Caution Deposit/Building Fund/Refundable Deposit Travel Expenses/Passage money for studies abroad Purchase of computers considered necessary for completion of course Cost of a Two-wheeler upto Rs. 50,000/Any other expenses required to complete the course like study tours, project work etc. For studies in India, maximum Rs.10 lacs Studies abroad, maximum Rs.20 lacs

Interest Rate
For loans upto Rs.4 lacs - 11.00% p.a. Floating For loans above Rs.4 lacs - 12.00% p.a. Floatin

Higher education often becomes a problem for numerous students due to financial constraints. But higher education is highly recommended so that the students can have better chances of getting employed in this highly competitive job market. Given below are the details regarding the SBI education loans, the eligible courses, the rates of interest and everything that the students would want to know regarding these loans.

Courses eligible for SBI education loans:

Loans are sanctioned for all the courses that provide chances of employment. The degree courses that the students can go for under these education loans are Bachelors, Masters, Diploma, Vocational as well as Professional courses. But it is highly important to note that the institutes require recognition from either the government, or boards like AICTE or the Ugc

Upper Limits of the Education Loans:

The maximum amount of the education loans varies according to where the student wants to pursue the degrees from. For courses outside the borders of India, the amount that can be granted is a maximum of INR 20 lakhs. For studies within India, the maximum amount can be up to INR 10 lakhs. The education loan takes into consideration, expenses like: college fees, travel expenditure, purchase of uniforms, study materials (computers if required), caution money, refundable deposit and the cost of a two wheeler that can be up to INR 50,000. Project work as well as touring for the purposes of studies is also taken into account.

The Interest Rates for the SBI Education Loans:

Take a look at the table below to know more about the interest rates of the SBI education loans: Amount (INR) % of Interest per annum Up to 4 lakhs 13.75 as per current market rate (Base Rate + 3.75%) (4 7.50) lakhs 15.25 as per current market rate (Base Rate + 5.25%) More than 7.50 lakhs 14.25 as per current market rate (Base Rate + 4.25%)

Processing Fees Required:

There are no processing fees required for the education loans provided by the State Bank of India. However the students who are looking forward to study abroad have to keep a security deposit amounting to INR 5,000. The amount will be adjusted with the margin money by the bank.

Repayment of the Education Loan : The repayment will begin a year after the students complete their courses or 6 months after they
secure a job, whichever happens earlier. Whether the loan amount is INR 10 lakhs or INR 20 lakhs, the money has to be repaid to the bank within a time period of 5 to 7 years.

REVIEW OF LITERATURE
Federal Education Loan Bank Lending to Community Banks, are Targeted Subsidies Necessary? The Gramm-Leach-Bliley Act of 1999 amended the lending authority of the Federal Education Loan Banks to include advances secured by small enterprise loans of community financial institutions. Three possible reasons for the extension of this selective credit subsidy to community banks and thrifts are examined, including the need to: subsidize community depository institutions, stabilize the Federal EducationLoan Banks, and address a market failure in rural markets for small enterprise loans. They empirically investigate whether funding constraints impact the small-business lending decision by rural community banks. Specifically, they estimate two empirical models of small-business lending by community banks. The data reject the hypothesis that access to increased funds will increase the amount of smallbusiness loans made by community banks.2) In December 2006 Fulbag Singh and Reema Sharma had studied about the Education Finance in India. Education, as one of the three basic needs of life, always remains on the top priority of any person, economy, and government and society at large. From the last decade, the Government of India has been continuously trying to strengthen the Education sector by introducing various housing loan schemes for rural and urban population. .. The main objective of the bank is to promote and establish the Education financial institutions in the country as well as to provide refinance facilities to Education finance corporations and scheduled commercial banks. Moreover, for the salaried section, the tax rebates on Education loans have been introduced. A relevant chart has also been prepared to highlight the results. The public release of the 2004-2005 education Disclosure Act data raised a number of questions given the increase in the number and percentage of higher-priced Education loans and continued differentials across demographic groups. Here we assess three possible explanations for the observed increase in 2005 over 2004: (1) changes in lender business practices; (2) changes in the risk profile of borrowers; and (3) changes in the yield curve environment. Results suggest that after controlling for the mix of loan types, credit risk factors, and the yield curve, there was no statistically significant. In May 1991 Stephen F. Borde had studied about the Is the Savings and Loan Industry Facing Extinction? This article tells about the saving and loan crisis. Proposed solutions are discussed in the context of the industry as it currently stands. With a somewhat similar liability structure to that of banks (mainly short-term deposits), the asset structure of S&Ls is quite different. Whereas banks assets consist of short-term loans, S&L assets consist largely of long-term loans, Therefore, in the absence of adequate hedging measures, S&Ls are more vulnerable to interest rate risk, which can lead to lower profits when interest rates rise In June 29, 2001 Joshua Rosner had studied about the Education in the New Millennium: . They studied about the prospects of the U.S. Education sector over the next several years. Based on our analysis, we believe there are elements in place for the Education sector to continue to experience growth well above GDP. However, we believe there are risks that can materially distort the growth prospects of the sector.

Specifically, it appears that a large portion of the Education sector's growth in the1990's came from the easing of the credit underwriting process. The increasing use of software to streamline the origination process and modify/recast delinquent loans in order to keep them classified as "current"* Changes in the appraisal process which has led to widespread over appraisal/over-valuation problem sIf these trends remain in place, . Despite the increasingly more difficult economic environment, it may be possible for lenders to further ease credit standards and more fully exploit less penetrated markets. Industry participants in combination with eased regulatory standards and the support of the GSEs (Government Sponsored Enterprises) have overcome many of them.If there is an economic disruption that causes a marked rise in unemployment, the negative impact on the Education could be quite large. Although we have yet to see any materially negative consequences of the relaxation of credit standards, we believe the risk of credit relaxation and leverage can't be ignored. Importantly, a relatively new method of loan forgiveness can temporarily alter the perception of credit health in the Education sector. Such policy initiatives may for a time distort the relevancy of delinquency and foreclosure statistics. Most loans are in the form of credit lines. Empirical studies of line demand have been complicated by their use of data on publicly traded firms, which have a wide menu of financing options. We avoid this problem by using a unique data set from a large financial institution of loan commitments made to 712 privately-held firms. We test Martin and Santomero's (1997) model, in which lines give firms the speed and flexibility to pursue loan opportunities. Our findings are consistent with their predictions. Firms facing higher rates and fees have smaller credit lines. Firms with higher growth commit to larger lines of credit and have a higher rate of line utilization. Firms experiencing more uncertainty in their funding needs commit to smaller credit lines. Almost all firms convert unused credit line portions into spot loans and take out new lines.

IMPORTANCE OF PNB AND SBI BANK

PNB LOAN IMPORTANCE:You will need to furnish the following documents along with the completed Application form. Mark sheet of last qualifying examination of school and graduate studies in India Proof of admission to the course Schedule of expenses for the course 2 passport size photographs Statement of Bank account for the last six months Proof of Residence (Recent Telephone Bill / Electricity Bill / Municipal Tax receipt etc.,) Proof of Identity (Passport copy / Driving License / Voter ID Card / Ration Card / PAN card etc.) Proof of previous employment and form 16s for the last two years Receipt of Rs.2.00 lakhs paid to PNB Personal assets and liabilities statement along with photocopies as proofs

SBI LOAN IMPORTANCE:-

1. Purpose for which the loan can be availed: The loan will be sanctioned for extending financial assistance to deriving/ meritorious students for pursuing higher education In India and abroad

2. Courses Eligible: Studied in India:

Graduation, Post-graduation including regular technical and professional Degree/Diploma courses conducted by Colleges/universities approved by UGC/ AICTE/IMC/Govt. Etc. Regular Degree/ Diploma Courses conducted by autonomous institutions like IIT, IIM etc. Teacher training/ Nursing courses approved by Central government or the State Government.

Vocational Training and skill development study courses will not be covered under the Education Loan Scheme, as the scheme is framed to provide bank loans for higher Studies.

Studied in abroad:
Graduation/ Post-graduation for job oriented Professional/ technical courses offered by reputed Universities.

3. Student Eligibility:
Test/Selection process. qualifying examination s through Entrance

4. Expenses Considered for Loan:

Fee payable to college/school/hostel: Where the student will be making his own boarding and 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. Examination/Library/Laboratory fee: Purchase of books/equipments/instruments/uniforms, Caution deposit /building fund/refundable deposit supported by Institution bills/receipts the amount considered for loan should not exceed 10% of the tuition fees for the entire course. Travel expenses/passage money for studies abroad. Purchase of computers - essential for completion of the course. Any other expense required to complete the course like study tours, project work, thesis, etc. 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 Premium of the insurance policy covering the life of the borrower for loan

5. Maximum Loan Amount:

Studies in India - Maximum Rs. 10.00 lacs Studies Abroad - Maximum Rs. 20.00 lacs

6. Margin
Upto Rs.4 lacs: Nil Above Rs.4 lacs: Studies in India: 5 % Studies Abroad: 15 % Scholarship/assistantship to be included in may be brought in on year-to-year basis as and when disbursements are made, on a pro-rata basis

OBJECTIVE OF THE STUDY

To analyze the education loan scheme provided by PNB and SBI bank. To do comparative analysis of education loan of PNB AND SBI bank. To study that which bank is providing better loan schemes. To know the consumer perception about the education loan of banks.

RESEARCH METHODOLOGY Research is an art of scientific investigation. It refers to a search for knowledge. The advance
Learners Dictionary English lays down the meaning of research as, A careful investigation or inquiry especially through search for new facts in any branch of knowledge. Research Methodology is a way to systematically solve the research problem. The research begins its formation when the problem or objective of the research is identified for which a research report is conducted.

RESEARCH DESIGN:A research design is the arrangement of condition for collection for analysis of data in a manner that aims to combine relevance to search purpose with Economy in procedure. Infact the search design is the conceptual structure within which research is conducted; it constitutes the blue print for the collection, measurement and analysis of data Types of research design -: i) Descriptive:- Descriptive research includes surveys and fact-findings enquiries of different kind. The major purpose of descriptive research is description of the state of affairs as it exists at present. The main characteristics of this method are that the researcher has no control over the variables; he can only report what has happened or what is happening. ii) Analytical: - In Analytical research, the researcher has to use facts or information already available, and analyze these to make a critical evaluation of material. iii) Applied: - It aims at findings a solution for an immediate problem facing a society or an organization/business organization. iv) Fundamental: Fundamental research is mainly concerned with generalizations and with the formulation of a theory. v) Exploratory: Research studies concerning human behavior carried on with a view to make generlisations about human behaviors is an example of fundamental research. The research study carried out is exploratory in nature

SAMPLING:These are following steps in my sampling design:-

1. Universe:- The first step in developing in sample design is to clearly design The set of objects technically called the universe. 2. Census:- A complete enumeration of all items in the population known as censusenquiry. 3. Survey population: - These are the respondent from the population on which the study is performed. These groups are taken into consideration while doing the research. 4. Sampling unit decision has to be taken concerning a sample unit before selecting sample 5. Judgement sampling has been used to collect the sample from the population. In this method of sampling the choice of sample items depends exclusively On the judgement of the investigator.

Data collection -:
Data collection refers to the process of gathering the information through any source which is essential to fulfill the research study.

Type of data collection -:

1) Primary data -: Primary data are the data that are new and he observes by investigator. All the primary data are more valuable things to the researchers and researcher must careful under finding the primary data. Method of primary data collection:

questionnaires Interview method

circulars
Schedules

2) Secondary data -: These are the data which are already available in the written form at any place and researcher doesnt have to find of their own through interview or questionnaire method. The different sources of secondary data -:

Books Magazines Journals Reports Websites Newspapers

In this report -:
In this report both primary and secondary data are used .I used questionnaires to collect primary data & newspapers & websites to collect secondary data.

LIMITATION
Although best of the effort were made to conduct a performed survey but still it faces certain limitation following are: The survey was conducted only 1oo respondent.

Some of the respondent did not answer all the question which could hamper the find result to a certain extent

They study confine itself to the respondent of region only hence finding would not be relevant other city.

DATA ANALYSIS

THE RESULTS OF A SURVEY WHICH WAS CONDUCTED ON 50 RESPONDENTS HAVING EDUCATION lOAN IN SBI BANK IS AS FOLLOWED
What is your occupation?s
Business man Student Government employee Other House wife 15 0 22 0 9

25

20

15 Series 1 10 Column1 Column2 5

0 business man student govt emp other house wife

Source: Primary Data

Interpretation : Total no. Of respondents 46 0 of our respondent student 22 of our respondent were government employee 15 of our respondent business man 9 of our respondent house wife None of our respondent belongs to other 4 respondents did not answerer

2.From how many years you are associated with their bank? Greater than 1 year 1-5year Less than 5 year 10 24 12

Series 1
30 25 20 15 10 5 0 > than 1 year 1-5 Year < 5 year

Series 1

Interpretation
Total no. Of respondent 46. 10 associated greater than 1 year 24 associated 1to 5 year

 12 associated less than 5 year

3. How do you come to know about education loan schemes of that bank? Newspaper TV Internet Other recourses 18 14 10 4

Series 1
20 18 16 14 12 10 8 6 4 2 0 Newspaper T.V Internet Other resourses Series 1

Interpretation
Total no. Of respondent 46. 18 of our respondent newspaper. 14 of our respondent TV. 10 of our respondent internet. 4 of our respondent other recourses.

4. Are u aware of all term and conditions of education loan?

Yes No .

40 6

Series 1
45 40 35 30 25 20 15 10 5 0 Yes No Series 1

Interpretation
Total no. Of respondent 46 40 people are aware o fall term and condition of education loan. 6 people are not aware of all term and condition. 5. Are you satisfy with interest rate charges by your banks? Strongly agree Agree Disagree Strongly disagree 12 30 4 0

Series 1
35 30 25 20 15 10 5 0 Strongly agree agree Disagree Strongly Disagree Series 1

Interpretation
Total number of respondent of 46. 12 among all consumers are strongly agreed by interest rate of the bank. 30 among all consumers are agreed by interest rate. 4 among all consumers are disagree by interest rate. 0 consumers are disagree by interest rate

6. Your bank offers which type of services?

Mobile banking Net banking Forex banking 24 15 7

Series 1
30 25 20 15 10 5 0 Mobile Banking Net Banking Forex Banking

Series 1

Interpretation
Total no. Of respondent 46 . 24 mobile banking service offers by bank. 15 net banking service offers by bank. 7 forex banking service offers by bank.

7. Do you agree that your bank loan processing is fast?

Strongly agree Agree Disagree Strongly disagree

8 26 9 3

Series 1
30 25 20 15 10 5 0 Strongly Agree Agree Disagree Strongly Disagree

Series 1

Interpretation .
Total number of respondent of 46. 8 among all consumers are strongly agreed the bank loan processing. 26 among all consumers are agreed the bank loan processing. 9 among all consumers are disagree the bank loan processing. 3 consumers are disagree the bank loan processing.

8. Do you satisfied with the after education loan services provided by your banks
are best as compare to other banks?

Strongly Agree Disagree Strongly disagree

agree 12 30 4 0

Series 1
35 30 25 20 15 10 5 0 Strongly Agree Agree Disagree Strongly Disagree Series 1

Interpretation
Total no. Of respondents 46. 12 people are strongly agreed the after education loan services provided by the bank. 30 people are agree the after education loan services provided by the bank. 4 people are disagree the after education loan services provided by the bank. People are strongly disagree the after education loan services provided by the bank.

9. Are you satisfied with employee behaviour of bank?

Strongly agree Agree Disagree Strongly disagree

19 23 4 0

Series 1
45 40 35 30 25 20 15 10 5 0 yes No Series 1

Interpretation
Total no. Of respondents 46. 19 people are strongly agreed the employee behaviour. 23 people are agreed the employee behaviour. 4 people are disagree the employee behaviour. People are strongly disagree the employee behaviour.

10. Does bank give any discount upon services? Yes No 40 6

Series 1
45 40 35 30 25 20 15 10 5 0 yes No Series 1

Interpretation
Total no. Of respondent 46 40 people are satisfied with discount schemes of bank loan. 6 people are not satisfied with discount schemes of bank loan.

11. Are you satisfied by the time taken in sanctioning loan?

Yes No

34 12

Series 1
40 35 30 25 20 15 10 5 0 Yes No Series 1

Interpretation
Total no. Of respondents 46. 34 people are satisfied the sanctioning the loan time. 12 people are not satisfied the sanctioning the loan time.

12. Have you face any difficulty during taken loan?

Yes No

39 7

Series 1
45 40 35 30 25 20 15 10 5 0 Yes No Series 1

Interpretation
Total no. Of respondents 46. 39 people are taking a loan without any difficulty. 7 people are not taking a loan of any difficulty.

13. Which grade you want to give of education loan schemes of bank?

Excellent Good Average Below average

24 18 4 0

Series 1
30 25 20 15 10 5 0 Excellent Good Average Below

Series 1

Interpretation
Total no. Of respondents 46 24 people are grade excellent of education loan schemes. 18 people are grade good of education loan schemes. 4 people are grade average of education loan schemes. People are grade below average of education

loan

schemes.

PNB: 50 1. What is your occupation? Business man Student Government employee Other House wife 16 0 22 0 9

25

20

15

10

Series 1

0 business man student government emloyee other house wife

Interpretation

Total no. Of respondent 47. 16 of our respondent business man. 0 of our respondent student. 22 of our respondents government employee 9 of our respondent house wife.

2. From how many years you r associated with their bank? Greater than 1 year 1-5year Less than 5 year 10 25 12

30

25

20

15

Series 1

10

0 > 1 year 1to 5 year < 5 year

Interpretation
Total no. Of respondent 46. 10 associated greater than 1 year 25 associated 1to 5 year 12 associated less than 5 year

3. How do you come to know about education loan schemes of that bank?

Newspaper TV

18 14

Internet Other recourses

11 4

20 18 16 14 12 10 8 6 4 2 0 news paper T.V internet other resources Series 1

Interpretation
Total no. Of respondent 47. 18 of our respondent know through newspaper. 14 of our respondent know through TV. 11 of our respondent know through internet. 4 of our respondent know through other recourses.

4. Are u aware of all term and conditions of education loan?

Yes No .

40 7

Series 1
45 40 35 30 25 20 15 10 5 0 Yes No Series 1

Interpretation
Total no. Of respondent 47 40 people are aware o fall term and condition of education loan. 7people are not aware of all term and condition.

5. Are you satisfy with interest rate charges by your banks? Strongly agree Agree Disagree Strongly disagree 12 30 5 0

35 30 25 20 15 10 5 0 strongly agree agree dis agree strongly agree Series 1

Interpretation
Total number of respondent of 47. 12 among all consumers are strongly agreed by interest rate of the bank. 30 among all consumers are agreed by interest rate. 5 among all consumers are disagree by interest rate. 0 consumers are disagree by interest rate

6. Your bank offers which type of services?

Mobile banking Net banking Forex banking 24 15 8

Series 1
30 25 20 15 10 5 0 Mobile Banking Net Banking Forex Banking

Series 1

Interpretation
Total no. Of respondent 47 . 24 mobile banking service offers by bank. 15 net banking service offers by bank. 8forex banking service offers by bank.

7. Do you agree that your bank loan processing is fast?

Strongly agree Agree Disagree Strongly disagree

8 27 9 3

30

25

20

15

Series 1

10

0 strongly agree agree disagree strongly agree

Interpretation .
Total number of respondent of 47. 8 among all consumers are strongly agreed the bank loan processing. 27 among all consumers are agreed the bank loan processing. 9 among all consumers are disagree the bank loan processing. 3 consumers are disagree the bank loan processing.

13.Do you satisfied with the after education loan services provided by your banks
are best as compare to other banks?

Strongly Agree Disagree Strongly disagree

agree 13 30 4 0

Series 1
35 30 25 20 15 10 5 0 Strongly Agree Agree Disagree Strongly Disagree Series 1

Interpretation
Total no. Of respondents 47. 13people are strongly agreed the after education loan services provided by the bank. 30 people are agree the after education loan services provided by the bank. 4 people are disagree the after education loan services provided by the bank. people are strongly disagree the after education loan services provided by the bank.

14. Are you satisfied with employee behaviour of bank?

Strongly agree Agree Disagree Strongly disagree

19 23 4 0

30

25

20

15

Series 1

10

0 strongly agree agree disagree strongly agree

Interpretation
Total no. Of respondents 47. 19 people are strongly agreed the employee behaviour. 24 people are agreed the employee behaviour. 4 people are disagree the employee behaviour. people are strongly disagree the employee behaviour.

15. Does bank give any discount upon services? Yes No 40 7

Series 1
45 40 35 30 25 20 15 10 5 0 yes No Series 1

Interpretation
Total no. Of respondent 47 40 people are satisfied with discount schemes of bank loan. 7 people are not satisfied with discount schemes of bank loan.

16. Are you satisfied by the time taken in sanctioning loan?

Yes No

34 13

Series 1
40 35 30 25 20 15 10 5 0 Yes No Series 1

Interpretation
Total no. Of respondents 47. 34 people are satisfied the sanctioning the loan time. 13 people are not satisfied the sanctioning the loan time.

17. Have you face any difficulty during taken loan?

Yes No

39 8

Series 1
45 40 35 30 25 20 15 10 5 0 Yes No Series 1

Interpretation
Total no. Of respondents 47. 39 people are taking a loan any difficulty. 8people are not taking a loan of any difficulty. 13. Which grade you want to give of education loan schemes of bank?

Excellent Good Average Below average

24 19 4 0

Series 1
30 25 20 15 10 5 0 Excellent Good Average Below

Series 1

Interpretation
. Total no. Of respondents 47 24 people are grade excellent of education loan schemes. 19 people are grade good of education loan schemes. 4 people are grade average of education loan schemes.

GENERAL FINDINGS

Sr. No 1 2 3 4 5 6 7

Parameter Beneficiaries Objective Aimed At Margin Money Security Interest rate Attitude

Private Banks Economically Affluent Section of Society Commercial Profit Earning Must Necessary High Rigid and Strict

Public Banks Economically Weaker Section Also National and Social Not Profitable Flexible Less Important Reasonable Flexible and Liberal

1 2 3

Max. loan For Rs 7.50 Lacs Studies in India Max. Loan for Rs 15.00 Lacs Studies in Abroad Interest rates Up to Rs 4.00 PTLR Above Rs 4.00 PTLR + 1% Repayment Period 1 Year After Starts From Completion Of Course or 6 Month After Securing a Job Which Ever is Earlier Repayment Period To be Repaid in 57 Year after Commencement of Repayment

Rs 10.00 Lacs Rs 20 Lacs Up to Rs 4.00 10.50% P.a Above Rs 4 Lacs, 11.5% P.a 1 Year After Completion Of Course or 6 Month After Securing a Job Which Ever is Earlier In India-Up to Rs 7.5 Lacs,5-7 Years above 7.5 Lacs, 510 Years. In Abroad- Up to 15 lacs-5-7 years Above Rs 15 lacs5-10 Years Up to Rs 4 LacsNil Above Rs 4 Lacs Studied in India5%, Abroad-15% No Processing Fees/ Upfront Charges Deposit Rs 5000 For education Loans for Studies Abroad Which will be Adjusted in margin Money Up to Rs 4 LacsNo Security Above Rs 4 Lacs to Rs 7.5 Lacs: Third Party. Guarantee Above Rs 7.5 Lacs to Rs 10 Lacs(India): Tangible Collateral Security for Full Value of Loan Above Rs 7.5 Lacs to Rs 15 Lacs(Abroad): Tangibles Collateral Security of Suitable Value

Margin

Processing Fees

Up to Rs 4 LacsNil Above Rs 4 Lacs Studied in India5%, Abroad-15% Not Processing Fees/ Upfront Charges

Security

Up to rs 4 Lacs: No Security Above Rs 4 Lacs Collateral Security of Suitable value( Equivalent Of 100% of Amount of Loan or CoObligation of Parents/ Guardian / Third Party)

of loan Or Third party Guarantee Rs 15 Lacs to Rs 20 Lacs(Abroad): Tangible Collateral Security For Full value of Loan

RECOMMENDATION

Banks should go for advertisement Campaign from Scratch. Banks should try to cash its brand image. Strong branch network should be made and staff personnels incentive should be increased Banks should increase its product line in education loans. Special scheme for non-professional students as well as for professional students should be increased

CONCLUSION
All the people are availing loan facility from both the bank. No of respondent S.B.I are 46 and 47 P.N.B banks people are relating with P.N.B more satisfied with the interest rate as compare to S.B.I. S.B.I people much know about education loan then PNB. Both PNB and SBI bank mostly after mobile banking services. Processing of S.B.I is faster than PNB Bank. After education loan services of PNB Bank is good as compare to SBI Bank. People related with SBI are more satisfied with employee behaviour as compare to PNB bank. People are more satisfied from SBI bank for time taken for sanction the loan. From all this 1 conclude that in SBI Bank in Education loan people are most Satisfied in comparison to PNB bank.

BIBILIOGRAPHY

There was immense need and flow of the information while conducting the analysis as well as while writing the thesis report, which was gathered through various sources mentioned below: Websites www.pnbindia.com www.statebankofindia.com www.google.com www.economictimes.com Reference Bookso

Kothari, C.R., Research Methodology, New Delhi, New age international Pvt Limited, 2008.

Broachers and various other documents gathered and collected from bank and various other sources such as ATM centers and associates.

ANNEXURE
The Questionnaire used specifically for PNB and SBI Bank Is below. QUESTIONNAIRE

NAME ADDRESS AGE 18 to 25 years OCCUPATION: Businessman Student Government Employee House wife others 25 to 35 35 to 40 Above 40 years

1. From how many years you are associated with this bank?

Less than 1 year

1 to 5 year

Over 5 year

2. how do you come to know about Education loan schemes of that Bank?

Newspapers

Television

Internet

Other Resources (please specify)

3. Are you aware of all terms and conditions of Education loan?

Yes

No

4) Are you satisfy with the interest rate charging by your Banks?

Strongly agree

Agree

Disagree Strongly Disagree

5) Your Bank offer which type of services?

Mobile Banking

Net banking

Forex Banking

6) Do you agree that your bank loan processing is fast?

Strongly agree

Agree

Disagree Strongly Disagree

7) Do you satisfy with the after education loan services provided by your banks are best as compared to other banks?

Strongly agree

Agree

Disagree Strongly Disagree

8) Does the cost of education loan is appropriate, according to your demand?

Yes

No

9) Are you satisfy with employee behaviour of bank?

Strongly agree

Agree

Disagree Strongly Disagree

10. Does bank give any discount upon loan services?

Yes

No

11. Are you satisfy by the time taken in sanctioning loan?

Yes

No

12. Have you face any difficulty during taking loan?

Yes

No

13.which grade you want to give to education loan schemes of bank?

Excellent

Good

Average

Below average

Any suggestion that you want to give ____________________________________________________________________ _________________________________________________________________________