Financial Assistance towards Education Loan by Karnataka Bank Ltd.

CHAPTER-1

INTRODUCTION

1.1 Introduction

Finance is the life blood of trade and commerce and industry. Now a days
banking sector acts as the back bone of modern business. Development of any
country mainly depends of upon the banking system.

The term bank is either derived from Old Italian word banca or from
French word Banque both mean a Bench or money exchange table. In olden days,
European money lenders or money charges used to display. Coins of different
countries in big helps (qualities) on benches or tabs for the purpose of lending and
exchanging.

A Bank is financial institution which deals with deposits and advances and
other related services. It receives money from there who want to save in the form
of deposits and it lends money who need it.

In India modern sense originated in the last decades of the 18 th century

among the 1st banks were the bank of Hindustan (1770) and liquidated in 1829-
32, and the general bank of India, established in 1786 but failed in 1791. The

Govt. First Grade College, PG Centre, Davangere Page 1

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

largest bank, and the oldest still in existence, is the State bank of India
(KARNATAKA BANK LTD.,). It originated as Bank of Calcutta in June 1806.
In 1809, it was renamed as Bank of Bengal. This was one of the 3 banks founded
by a presidency government; the other two were the Bank of Bombay and the
Bank of Madras.

State bank of India is an Indian multinational, public sector banking and

financial services company. It is a government – owned corporation with its head
quarters in Mumbai, Maharashtra. As of 2014-15 it has assets of INR 20,48,080
crores and more than 1400 branches, including 191 foreign offices spread across
36 countries, making in the largest banking and financial services company in
India by assets.

KARNATAKA BANK LTD., includes 99345 offices in India. and has 131
foreign offices in 32 countries across the globe, and it has about 21000, ATMs
and KARNATAKA BANK LTD., group has about 45000ATMs. It has 26500
branches, including branches that belong to its associate banks, and it has
growing day by day.

The scope of education has widened both in India and abroad covering
new courses in diversified areas. Development of human capitals is a national
priority and it should be the endeour of all that no deserving student is denied
opportunity to pursue higher education for want of financial support. Loans for
education should be seen as an investment for economic development and
prosperity. Knowledge and information would be the driving force for economic
growth in the coming years.

1.2 Review of Literature

 Joy Job Kulavelil (2000) has analyzed the objectives and nature of higher
education and resources mobility through funding diversification in Kerala

Govt. First Grade College, PG Centre, Davangere Page 2

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

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.
 Sukumaran Nair (2003) the privatization of education would replace the
civilizing mission of education with the spirit of commercialization. The state
of Kerala, therefore, has to be vigilant against the unbridled free play of
market forces so that they do not become detrimental to egalitarianism and
social welfare
 Narayana M.R. (2005) has made an empirical analysis about the role of
commercial banks in financing the budgetary subsidy to general collegiate
education by government and private aided colleges in Karnataka state in
India. He concluded that the current model schemes of student loan and
subsidies should be encouraged and be made equally supportive to the
changing needs of the students pursuing studies in India and abroad.
 Hauptman (2006) points out that funding process of higher education followed
in India continues to be on the basis of historical allocation. He suggested a
shift to policy-driven funding by introducing policy variables into funding
process or performance-based funding that recognize outputs rather than just
inputs (as in UK).
 P.N. Nair and P.R. Gopinathan Nair (2008)49 has analyzed the cost of higher
education between self - financing Institution and public federal Institution in
Kerala and stressed that the cost of higher education is far high in
selffinancing institution than public funding institution. He also advocates that
the self-financing institutions should accommodate the student from low
income groups by arranging loan sand scholarships from external agencies.
 Yash Pal Committee (2009) recommended state funding as a major source of
financing of higher education, however, student loan at low interest rates and
free education for poor students will also move side by side.

Govt. First Grade College, PG Centre, Davangere Page 3

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

1.3 Objectives :

 The eligibility criteria for the students for securing Education loan.
 To study the verification process of the documents by the KARNATAKA
BANK LTD., while sanctioning the Education loan.
 To study the rate of interest on Education loan provided by
KARNATAKA BANK LTD.,.
 To know the awareness level among the people of Davangere about
education loan being provided by KARNATAKA BANK LTD.,.
 To study recovery process of education loan adopted by KARNATAKA
BANK LTD.,.
 To provide valuable suggestions to KARNATAKA BANK LTD.,.

1.4 Need for the Study :

Even after some decades of planned development, the students have not
achieved expected success in the main stream of life. Education loans are at
present playing a vital role in empowering the students‟ education.

So for knowing the present position of Education loan and what are all the
supports makes by the education loan towards the students.

This study is helps to know the real position of education loan and it is
need to us in a student‟s point of view.

1.5 Scope of the Study :

The study intends to analyse the “Financial assistance towards Education
loan by KARNATAKA BANK LTD.,” in Shamanur Road Branch, Dvangere
This study gives students opinion or perception towards education loan. And
students opinion plays very important role in the education loan.

Govt. First Grade College, PG Centre, Davangere Page 4

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

So for that purpose this study is focusing on the students who are
Davangere city only.

Davangere city which is located in the middle of Karnataka. Once upon a

time it was called as “Manchester of India” but now it is famous for only
educational institutions and other business etc.

Analysis and Interpretation will be done based on information collected

from students those who are secured the education loans in Davangere city in
KARNATAKA BANK LTD., branch.

1.6 Methodology
The data needed for the study are collected through primary data and
secondary sources.

Primary data is collected through conducting direct interview with the

respondents and banker and officers of KARNATAKA BANK LTD.,.

Secondary data is collected through internet, journals, magazines, and

published records of KARNATAKA BANK LTD.,.

To collect primary data a well-structured questionnaire is framed and

served to the respondents.

Sample size
The sample from the universe (Davangere is selected by using stratified
random sampling method) 50 students who have secured educational loan from
KARNATAKA BANK LTD., have been selected for survey.

Statistical tools

The statistical tool called questionnaire is used to collect the required

primary data.

Govt. First Grade College, PG Centre, Davangere Page 5

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

Statistical techniques

For collecting the data required for the study sampling technique is being
used where in sample is selected using stratified random sampling method for the
purpose of analyzing the collected data it has been systematically tabulated and
presented through graph, pie diagrams, bar diagrams, percentage etc are being
used.

1.7 Limitations
 The study was restricted to Davangere city only.
 Due to time constraints, the extensive research could not under
take.Therefore the sample size was 50 students only.
 Some information is provided of the records by the bank/institutions is
assumed as facts.

1.8 Chapter Scheme

1. Introduction
This chapter consists of the information regarding the introduction of
bank, review of literature, objectives of the study, need for the study, and scope of
the study, methodology, sampling size, statistical stools, statistical techniques and
limitations of the study.

2. Profile of KARNATAKA BANK LTD.,

This chapter deals with the information regarding the historical

background of KARNATAKA BANK LTD.,, organization structure of bank,
functions performed by KBL, services provided by KBL, products and services
offered by KBL, management of KBL, vision and mission of KBL, SWOT
analysis of KBL.

Govt. First Grade College, PG Centre, Davangere Page 6

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

3. Loan profile

This chapter highlights the information regarding the meaning of loan,

types of loan, background of education loan, education loan in India, model
educational loan scheme for pursuing higher education in India and Abroad, steps
involved in education loan, most important terms and conditions of education
loan, benefits of education loan to the students, problems facing by the students,
education loan interest rates in different banks in India.

4. Analysis and interpretation

In this chapter, the data collected by conducting survey has been analyzed
through tables and represented through graphs, bar diagrams, pie diagrams and
same statistical measures such as averages are calculated to draw interpretation
based on data collected.

5. Findings, Suggestions and conclusions

This chapter contains the major findings of the survey and also the
valuable suggestions given by the respondents through which conclusions are
drawn.

Annexure :
1. Questionnaire
2. Bibliography

Govt. First Grade College, PG Centre, Davangere Page 7

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

CHAPTER-2

PROFILE OF KARNATAKA BANK LTD.

2.1 Historical background of Karnataka Bank

Karnataka Bank Limited was incorporated on 18 February 1924, and

commenced business on 23 May 1924. Its founders established it at Mangalore, a
coastal town in the Dakshina Kannada district of Karnataka. Among the founders,
who created the bank to serve the South Kanara region, was B. R. Vysaray Achar.
K. S. N. Adiga, who served as the Chairman from 1958 to 1979.

In the 1960s Karnataka Bank Limited acquired three smaller banks. In

1960 Karnataka Bank Limited acquired the Sringeri Sharada Bank, which was
established in 1942 had four branches. Four years later, Karnataka Bank Limited
took over Chitradurga Bank (also known as Chitladurg Bank), which was
established in 1868 in Mysore State and was the oldest bank in Mysore. In 1966
Karnataka Bank Limited took over Bank of Karnataka. Bank of Karnataka was
established in 1946 and had opened one branch in Belgaum in 1947. At the time
of this acquisition, Bank of Karnataka had 13 branches.

In 2000, Karnataka Bank Limited signed a memorandum of understanding

(MoU) with Infosys Technologies to develop a core banking solution called
Finacle. The main motto of this programme is "Anytime/Anywhere banking". In
the year 2004, the bank introduced the MoneyPlant Debit Card that allows

Govt. First Grade College, PG Centre, Davangere Page 8

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

customers to withdraw money from their Karnataka Bank accounts.In September

2003, the bank shifted its head office from Kodialbail to Kankanady.

The branches are available in 22 Indian states and 2 Union Territories. In

August 2008, the Karnataka Bank Limited introduced Quick Remit, a facility to
make money transfer easy for Non-Resident Indians living in Canada, United
States, and the UK The bank also runs a 24-hour Internet banking service called
Money Click.

2.2 Organizational structure of bank

Govt. First Grade College, PG Centre, Davangere Page 9

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

2.3 Functions of bank

1. Primary functions

 Accepting deposits
 Granting loans and advances

2. Secondary functions

 Issuing letters of credit, travellers cheque.

 Undertaking safe custody of valuables, important documents, and
securities by providing safe deposits vaults or lockers.
 Transferring money from one place to another; and from one branch to
another branch of the bank. Collecting and supplying business
information. Issuing demand drafts and orders.
 Providing reports on the credit worthiness of customers.
 Providing customers with facilities of foreign exchange.

2.4 Services provided by KBL

Services provided by KARNATAKA BANK LTD., to its customers.

 Domestic treasury.
 Broking services.
 Revised service charges.
 ATM services.
 Internet banking.
 E- Pay.
 E-rail.
 Safe deposit locker.
 MICR codes.
 Foreign inward remittances.

Govt. First Grade College, PG Centre, Davangere Page 10

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

Financial services

 Fund transfers.
 Third party payments.
 Bill payments.
 Opening bank accounts.
 Closure of loan accounts.
 Loan payments.
 Issue of demand drafts.
 ATM services.
 Mobile services.

Non-financial services

 Viewing account information.

 Requesting for cheque book.
 Creating standing instructions.

2.5 Products and services offered by KBL

 Working capital finance.

 Project finance.
 Differed payment guarantees.
 Corporate term loans.
 Structured finance.
 Dealer financing.
 Channel financing.
 Equipment leasing.
 Loans syndication.
 Financing Indian firm‟s overseas subsidiaries or JVs.
 Construction equipment loan.

Govt. First Grade College, PG Centre, Davangere Page 11

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

2.6 Management of KARNATAKA BANK LTD.,

D Surendra Kumar Director

Mythily Ramesh Director

Ashok Haranahalli Director

Rammohan Rao Belle Director

Ullal Ravindra Bhat Director

Keshav Krishnarao Desai Director

M S Mahabaleshwara Managing Director & CEO

B R Ashok Non Exe.Non Ind.Director

P Jayarama Bhat Non Executive Chairman

Gokuldas Pai Chief Business Officer

Muralidhar K Rao Chief Financial Officer

Y V Balachandra Chief Operating Officer

Prasanna Patil Co. Secretary & Compl. Officer

Ramesh Bhat Deputy General Manager

N R Ravishankar Deputy General Manager

B Nagaraja Rao General Manager

S Ramesh General Manager

B Chandrashekar Rao General Manager

2.7 Vision and Mission of KARNATAKA BANK LTD.,

VISION:

Bank is a professional managed with good track record of customer loyalty

and constituent profitability. The bank has the resilience to face the new

Govt. First Grade College, PG Centre, Davangere Page 12

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

challenges successfully and achieve the goals in vision by its management

adopting ethical management practices. Bank reiterates its commitment to full fill
national and social priorities present sound financial and about to all else improve
and innovate to meet the challenges posed by a customer driven banking
industries.

MISSION

The mission statement of any organization generally represents its long

term goals and strategies. Every organisation must have its own mission. Which
describes present business scope of the organization. The mission statement of
Karnataka Bank Ltd., is as follows :-

“To be a technology survey, Customer centric progressive bank with a

national presence. Driven by the highest standards of corporate governance and
guided by sound ethical values.”

2.8 SWOT analysis of Karnataka Bank Limited :

KARNATAKA BANK LTD., has its routes since 1806 which was later
transformed under various names, finally KARNATAKA BANK LTD., was
established after the act in parliament on may 1955.In the year of 1959
KARNATAKA BANK LTD., took over 8 state owned banks and since then it
started to grow up carrying its heritage of servicing people at various economic
levels.
Strengths:

 The factors that have contributed to the success of the bank is its
workforce because the bank has highly educated work force, young and
energetic employees within the age group of 25-45. This helps the junior
employees to learn from the experience of the senior employees

Govt. First Grade College, PG Centre, Davangere Page 13

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

 The Bank is professionally managed. The bank is one fo the few banks in
India which gives importance to technology in order to serve it customers
better if it is one of the few bank which uses financial software‟s
 The banks strengths lie in management capabilities focused strategy
speedy decision making.
 There has been expansion of branches and ATM services by the bank
during the last few years.
 The Banks provides good infrastructure facility to its staff and help them
to concentrate more on their job.
 The Bank has introduced various schemes.

Weakness:

 The Weakness of the bank includes that the bank has majority of the
branches in the southern region.
 The Second weakness of the bank is that of its agencies work force.
 Non-verification of Reserve Bank of India defaulters list while processing
credit proposals.
 Delay in follow up on various accounts
 Bank had often involved in frequently cheque purchases of large amounts
beyond the discretionary power.
 While opening foreign letter of credit opinion report of the overseas party
not obtained resulting in development / likely developments.
 Delay in crystallisation of export bills discounted.
 Sanction terms and conditions were not complied with in many cases
revealing inadequate / ineffective mechanism to monitor and follow up of
such cases.
 The stocks hypothecated to the bank were not adequately insured / not
insured in some cases.

Govt. First Grade College, PG Centre, Davangere Page 14

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

 There were instance of frequent returns of cheques and the branches had
not taken up the matter with the borrowers concerned to maintain finance
discipline.

Opportunities:

The growth potential or the opportunities are very huge as the bank had
mainly concentrated on the southern region of the country in its earlier years. It
has the opportunity to expand its business to other part of the country where in it
can increase its customer base. The bank by virtue of becoming a member of
ATM networks like VISA, NFS , Cash Tree besides continuing the bilateral
arrangement with corporation Bank. Has enabled access to nearly 1 million
ATMs and 25 million pos accorss the globe for its card holders. Bank is also
facilitating inward remittance facility through western union money transfer
which has enabled vast section of the population to receive hassle free remittance
from abroad. The bank is planning to enable „Money click‟ as a payment gateway
for shopping the covers vast areas of Business like Hotel booking, Ticket
booking, purchase of goods etc., Top-up through ATMs and internet Banking.
Besides launching value additions like SMS alerts to non-money click customers
utility bill payment and Air Ticket booking through ATMs. Further Bank is also
planning to tie up for online trading in shares. The bank is planning to increase
the number of its ATMs to 150 by 31.03.2019

Threats:

As the bank majority business comes from the south any effect to the
economy here would have an adverse effect on the performance of the bank. The
bank is relatively smaller when compared to other banks like KARNATAKA
BANK LTD., and ICICI Bank and some others. Since it „s a smaller bank when
compared to heavy weights like KARNATAKA BANK LTD., and Corporation
Bank. The bank is always under treat of being taken over by other banks.

Govt. First Grade College, PG Centre, Davangere Page 15

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

CHAPTER -3

LOAN PROFILE

3.1 Meaning of loan

A loan is a lump sum advance given to borrower under a loan
agreement. A specified sum of money is given to a person or a firm against some
collateral. This may be given either in cash or by way of transfer to his current
accounts. When a loan account is granted to customer, the bank opens a separate
loan account in the name of the customer and the entire loan amount is debited
with it. If the amount is paid in cash the cash account is credited. Interest is
charged on the entire amount of the loan sectioned.

Loan can be classified as, term loans, consumer loans etc. when
loan is granted for a period exceeding one year it is called term loan. Customer
loans are personal loans made to consumer to purchase durable consumer article
like radio, TV, etc.

3.2 Types of Loans

Currently in India we have different types of loans available
ranging from personal loans to marriage loans .but when to use which loan is
smart way of managing your money. Hence first let us look at different types of
loans available.

Govt. First Grade College, PG Centre, Davangere Page 16

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

1. Home loan :
Home loan as name suggest is the loan against buying property. Every
individual currently have dreams to have their own home. To make affordable
best option is home loan. Again there are sub categories of home loans which are
as follows.
 Home loan for residents.
 Loan for repairs and extension.
 Land purchase loan.
 Top up loans.
 Loan for earnest money deposits (EMD).
 Reverse mortgage loans.
 Loans against property.

2. Personal loan:
It is the loan granted to fulfill your expense which ranges from buying
some expensive electronic gadgets to looking your air tickets. Yes people used to
use this facility for anything they can. They forget that usually rate of interest on
such interest loans will be higher than other types of loans. But still to have
something in advance end up them to borrower of such type of loans. Here may
find two types of loans.
 Secured loan: - Where you provide some collateral as a safety against
loans.
 Unsecured loan: - In such type of loans borrower collateral not required.

3. Car loan/ vehicle loan:

This is usually used to meet your financial requirements when one is
planning to have his dream car or bike. It is usually a secured loan where
collateral is your vehicle and in car of default lender may recover by taking back

Govt. First Grade College, PG Centre, Davangere Page 17

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

your vehicle. But some lenders offer unsecured loans where your credit score
matters more.
4. Education loan:
This is actually a handy tool for parents who not planned well for their
kid‟s higher education for a detailed view in this visit earlier post “Know all
about education loan features”.

5. Gold loan:
This was one of the easiest and fastest ways of loan when gold rate was at
its peak. But currently lot of lenders feel it better collateral due to falling in gold
price, especially gold loan companies. Recently RBI banned any gold loans
against gold ETF‟s and gold mutual funds. Even though it forms easiest and
fastest way of getting loan but better to look for risks involved in it, especially
when you are dealing with NBFCs.

6. Loan against insurance policy:

You can use your insurance investments as collateral or take loan from
insurer itself if that policy is eligible for loan usually loans will be available after
3 years of policy period. You will get loan is pledge your policy document with
banks and take loan on that. LIC will after you loan on your policy with the
interest rate of 10%, which I think competitive pricing compare to other type of
loans.
7. Loan against bank FDs:
This is one from of loan where your collateral is your bank FD itself.
Suppose you have bank FD of around 1000000/- then you are usually eligible to
get loan 800000/- but interest rate will 1-2% higher than your FD rate, but still
this form of loan is also fastest and best way.

Govt. First Grade College, PG Centre, Davangere Page 18

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

8. Loan from PPF or EPF:

You can avail loan from PPF when one satisfies certain conditions. For
detailed view on same of visit my old post “PPF, loan and withdrawal” you can
avail loan from EPF too. But you can avail loan from EPF only for special
purpose like purchase of house, repayment of home loans, and renovation of
home or pre-retirement. But all are not eligible to take loans There is certain
condition like minimum years of computation, age or proof you need to produce.
So it seems but lengthy procedure.

9. Loan against share or mutual fund:

Few lenders after loan againstyour investment value of shares or mutual
funds, but you will not get more value from this.Reason is, both the investment (if
mutual fund is of equity oriented) then fluctuation in values will be high. Hence
to profit their loan amount usually lenders offer less loans.

10. Loan from unorganized sector:

This is one of the easiest but costliest was of fulfilling your financial
dream, usually interest rate will be in the range of 20%-30% but you can get it
immediately. Such types of loans are useful who are running out of time and not
have any source also to find their financial requirements. But looking at this
option is costly affair. Hence it is highly advisable to avoid such funding.

3.3 Background of education loan

The student‟s loan scheme was introduced in 1992 with the aim of
enabling access to tertiary education for everyone who wants it. There three
government agencies involved in the scheme.

o The ministry of education for strategic policies in relation to the students loan
scheme. On their website you will find links to the other agencies, current

Govt. First Grade College, PG Centre, Davangere Page 19

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

topics, debt projections, comparison of repayment periods by gender and

ethnicity, the payment estimator and the data integration project.
o Study link (a division of the ministry of social development) is responsible for
the administration and delivery of student loans to students during the year of
study. After the end of each academic year study link transfers those loans to
Inland Revenue for collection.
o Inland revenue is responsible for collecting student loan repayments from the
year after the money is borrowed and administering interest write offs.

3.4 Education loan in India and Abroad

1. Education loan in India

Securing education loan in India may sound easy, but it is full of obstacles
and formalities. Government, in order facilitate loan disbursal has simplified the
norms; but, still their remain many more in place, that come in the way of student
getting educational loan. some of the challenges faced by students as well as
banks, includes customization of loan product to suit the requirements of the
students and that of courses; margin of money requirements; collateral security
sufficient enough to cover the loan amount; proof of appropriateness of the
university, college and course applied for timely approval of loan to meet the
admission related deadlines; post dispersal issues etc. these activities consume a
lot of energy, time, effort and money. The financial institutions use all relevant
information available from different sources, and with the help of credit scoring
models, do the credit profiling of the student. This helps, it in working closely
with students and parents to try and design appropriate education loan program
for them.

Govt. First Grade College, PG Centre, Davangere Page 20

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

2. Model educational loan scheme for pursuing higher education in India

and Abroad

Education is central to the human resource development and

empowerment in any country. National and state level policies are framed to
ensure that this basic need of the population is met through appropriate public and
private sector initiatives. While government endeavor to provide primary
education to all on a universal basis, pubic funding of higher education is not
considered feasible. Cost of education to has been going up in recent times and
since the students has to bear most of the cost there is clear case for intuitional
funding in this areas. This model education loan scheme is an attempt to bring out
a viable and sustainable bank loan scheme to meet aspirations of our society.

Knowledge and information would be the driving force for economic

growth the coming years. The current rate of economic growth of country
demands technically and professionally trained man power in large numbers. In
this back drop, loans for education are seen as investments for economic
development and prosperity. The model education loan scheme was developed by
the Indian bank‟s association to help meritorious students pursue higher education
in technical and professional courses. As the focus is on development human
capital, repayment of the loan is accepted to come from future earnings of the
student after completion of education. Hence the assessment of the loan will be
based on employability and earning potential of the student upon completion and
not the parental income/family wealth. This review exercise has been taken up to
make the scheme more transparent and minimize scope for multiple
interpretations lending to disputes.

3.5 Steps involved in education loan

An education loan is probably the most important step for a vast majority
of Indian students aspiring to fulfill their dreams of pursuing studies in Abroad.

Govt. First Grade College, PG Centre, Davangere Page 21

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

Though financing education has been a stepping stone for many deserving
students to accomplish their dreams over the years, common doubts and
ambiguities still remain, especially relating to processes, repayment, processing
fees, course of choice and sub sequent financing.

1) Before opting for an education loan, the first thing to do is to assess funds
available with you. Funding through scholarships, for e.g. would reduce your
upfront loan burden consider.
2) Are you eligible for an education loan? This is an important question that
needs to be answered. It can be easily checked with the eligibility calculator
available with most education loan providers on their websites. The eligibility
calculator will help you determine the approximate eligibility value.
3) Check if the institute that you have applied to has any association or
affiliation with banks or non-banking finance companies. NBFCs, for
education loans. This affiliation expedites loan processing.
4) Look up for information on your institution, its placement history, average
remuneration for campus placements and earnings potential after completion
of your course. Don‟t just concentrate on your schools overall ranking or
graduation rate as starting salaries greatly influence the loan repayment
period.
5) After you have decided on the actual amount of required, identify a loan
provider who would not only meet your requirements in terms of the loan
amount but also agree to fund your choice of program. There are lenders who
can provide you 100% loan amount without any margin money. Certain
NBFCs can provide loans as rupees 100 lakh or one crore.
6) Check the expenses covered within the loan amount i.e whether the loan
covers complete tuition fees and living expenses for the entire duration of the
program.

Govt. First Grade College, PG Centre, Davangere Page 22

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

7) Explore whether once parental income will sufficient to meet the eligibility
criteria or an additional co- borrower would be required. Do you have
sufficient collateral security like house, flat, non-agricultural land or fixed
deposit, to support the loan? This may help negotiate better terms with the
lender.
8) Compare not only the rate of interest on your loan but also other benefits
in terms of easy repayment options, flexibility to pay from Abroad. Online
customer services etc. From your loan provider non-banking financial
companies and dedicated education loan providers provide for flexibility on
all these counts.
9) Obtain a checklist from the lender beforehand and prepare all the
necessary papers and documents to ensure expedition of the process.
Generally, documents required for any education loan or KYC, educational
qualification certificates, proof of income (of parents) and collateral security
document copies.
10) Decide the repayment option in consultation with your parents. That is, if
you want to start EMI or simple interest or wants to go for moratorium. If you
start simple interest payment or monthly instalments, it will reduce the loan
burden once you graduate. It is advised not to go for moratorium unless
required since it adds to the loan burden.
11) Know the terms of your loan what the interest rate is, what the repayment
period is, and when precisely the payments will begin. Do not shy away from
asking questions as trivial as they sound to you!

NOTE:

It is important to know and understand that any default in EMI payments

reflect in your credit report, lowering your credit score for any future borrowings.
Another important point to remember is that if parents co-sign on the loans, they
are liable for the loan.

Govt. First Grade College, PG Centre, Davangere Page 23

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

3.6 Terms and conditions of education loan

1. Purpose for which the loan can be availed

The loan will be sectioned for extending financial assistance to deriving/

meritorious students for processing higher education in 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 /Government 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.
 Regular degree or diploma courses like aeronautical, pilot training, shipping
etc. approved by director general of civil aviation/ shipping.
 Vocational training and skills development study courses will not be covered
under the education loan scheme, as the scheme is framed to provide bank
loans for higher studies.

b) Studies in Abroad
 Graduation or post graduation for job oriented professional/ technical courses
offered by reputed universities.

3. Student eligibility

 Should be an India national.

 Secured admission to professional/technical courses through entrance test
/selection process.

Govt. First Grade College, PG Centre, Davangere Page 24

 Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

 Secured admission to foreign university/ institutions.

 No minimum qualifying marks stipulated in the last qualifying examination.

4. Expenses considered for loan

 Fee payable to colleges / schools /hotels; where the student will be making his
own boarding and lodging arrangements, the sectioning authority is authorized
of fund boarding and lodging expenses on the basis estimate submitted by the
student/ parent, provides such expenses are not more than those charged by
the educational institutions for boarders.
 Examination/library/ laboratory fee.
 Purchase of books/ equipment‟s/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 in Abroad.
 Purchase of computers-essential for completion of the course.
 Any other expenses required to complete the course the course like-study
tours, project work, thesis etc.
 Cost of two-wheeler up to rupees 50000 can be included in the expenses
considered eligible for finance where the loan amount is secured by a suitable
third party guarantee and /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 rupees 10.00lakhs
Studies in abroad – maximum rupees 20.00lakhs

Govt. First Grade College, PG Centre, Davangere Page 25

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

6. Margin
Up to rupees 4 lakhs: Nil
Above rupees 4 lakhs: Studies in India 5%
Studies in Abroad: 15%
 Scholarship /assistantship to be included in margin.
 Margin may be brought in on year to year basis as and when
disbursements are made, on a pro-rata basis.
7. Security
a) Up to rupees 4 lakhs
 Co- obligation of parents
 No security
b) Above rupees 4 lakhs and up to rupees 7.50 lakhs
 Co- obligation of parents together with collateral security in the form of
suitable third party guarantee, The bank may, at its description, in
exceptional cases, wave third party guarantee if satisfied with the net-
worth/ means of parents is who would be executing the documents as
“Joint borrower.”
C) Above rupees 7.50 lakhs
 Co- obligation of parents together with tangible collateral security of
suitable value, along with the assignments of future income of the student
for payment of instalments.
 The documents should be executed by both the student and the
parent/guardian as joint borrower. We clarify than if the student is a minor,
the document will be signed by the guardian acting „For self‟ as well as
„For and on behalf of the minor‟.
 The co –obligator should be parent(s)/guardian of the student borrower. In
case of married person, co-obligator can be spouse /the parent(s) in law.

Govt. First Grade College, PG Centre, Davangere Page 26

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

8. Processing charges
No processing/ upfront charges may be collected on educational loans.
For loans to students going abroad
All those students who approach us for an education loan of more than
4.00 lakhs for studies abroad will be required to make deposit of 5000/-which will
be adjusted against the contribution of margin money /the internet payable on the
loan, in case the loan is available by the applicant. If the applicant does not avail
the loan within a period 4 months of sanction of the loan, the amount will be
forfeited.
9. Interest charges
For interest charges, visit our website www.kbl.co.in.
a) 0.50% concession is interest rate for girl students availing education loans
with effect from 2nd March 2009.
b) 1%concession is rate of interest to be provided for full tenure of the loan if
full interest is serviced during the motarium period (including course
duration).
c) Simple interest to be charged during moratorium period.
d) Penal interest @2% to be charged for loans above rupees 4 lakh for the
overdue amount and overdue period.
10. Sanction and disbursement
 The loan is generally sanctioned at the branch nearest to the permanent
residential address /place of domicile of the student /parent.

The loan to be disbursed is stages as per the requirement /demand directly to

the institutions/ venders of books / equipment‟s /instruments, to the extent
possible.

11. Repayment
Repayment holiday/moratorium Course period +1 Year, /6 months often
getting job, whichever is earlier.
Govt. First Grade College, PG Centre, Davangere Page 27
 Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

Repayment: The loan is to repaid in 5-7years, after commencement of

repayment.
 If the student is not able to complete the course within the scheduled time,
extension of time for completion of course may be permitted for a maximum
period of 2 years. If the student is not able to complete the course for reasons
beyond his control, the sanctioning authority may at deemed necessary to
complete the courses.
 Top accrued interest during the moratorium period / repayment holiday period to
be added to the principal repayment to be fixed in equated monthly installments
[EMI].

12. Top up loan

Second loan (Top up) loan within the overall limit is now permitted to
pursue professional courses in India /abroad the projected income of the student,
after placement, is sufficient to cover full loan repayment, and subject to the
second loan being allowed with the security requirements as applicable to the
aggregate loan limit. Since the student will be able to take up a job after
completion of the 1st course, is obligation to repay the loan after one year to
completion of the 1st course would also need to be deferred. In such case,
moratorium period may be extended for the duration of the 2 nd course and the
combined repayment shifted to one year after the completion of the 2nd course, or
6 months after taking up a job whichever is earlier.

3.7 Benefits and problems of education loan to the students Benefits

 Best way to pursue higher education.

 Higher education for all.
 People of different classes can get a loan.
 Tax exemptions.
 Low interest rates.
Govt. First Grade College, PG Centre, Davangere Page 28
 Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

 Good payment terms.

 Easy to get education loans.
 Helps students take responsibilities early.
 Parent rescued from recurring burden.
 Independence for the students.

Problems facing by the students

Students loans have an obvious benefit; if money is short, student loans

allow you to go to school and get the degree you need to advance your career.
But risk also come with taking a education loan, some obvious, some less
obvious.

 The most obvious risk is that you won‟t finish the degree program for which you
are taking the loan, and then you end up leaving the school without anything to
show for except some uncomfortably large debts.
 Another risks, equally obvious, is that you take the loan, finish the degree
program, but then have a degree that‟s not marketable, that doesn‟t get you the
job you want and doesn‟t increase your pay enough to offset the debt you are new
having to pay off.
 The way to minimize both these risks is to do your home works before enrolling
in a degree program, making sure that students attending the program have good
rate of success in actually finishing it, and additionally making sure that students
who finishing it have good job prospects upon completion.
 Schools vary normally in the tuitions they charge (compare our cost index),
which shows that colleges and universities can charge anywhere for $ 1400 to $
51000 for tuition and fees for full time students for the year and everything in
between.
 Note that their amounts don‟t include having, food, transportation and after living
expenses thus your student loans may also have to cover living expense if being

Govt. First Grade College, PG Centre, Davangere Page 29

 Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

full time students prevents you from holding the types of job that would
ordinarily allow you to cover them.
 Consequently if student debt could a problem for you, its is safest to choose a
school that has low tuitioncost and allows you to live in an area where the cost of
living is low.
 Less obvious risks also come with taking a student loan there is an old proverb
that says that “the debtor is slave to the lender” debt can turn you into a slave to
the banks that provide your student loan. Many students who take educational
loan are young and have never had any major debt.Taking a student loan changes
all that, removing a sizeable cheque from your pay cheque each month once you
have to start paying of the loan.
 Another less obvious risk that you pays in taking out a student loan goes by the
fancy sounding ward “non dischargeable” let‟s say you are overwhelmed by debt
one way out of it is to declare personal bankruptcy, which cancels your debts. But
a non dischargeable debt is one that you can never get rid of not by declaring
bankruptcy, not by doing anything except paying it of are dropping dead
(literally).
 The student loan commits you to paying of the loan regardless of the hardships
you may face in life. Student loans are non dischargeable.Youcannot get rid of
their debts they will follow you for the set of your life until you pay them off.
 It‟s worth stepping back and asking why students loans have become such a big
issue and problem for students.

Govt. First Grade College, PG Centre, Davangere Page 30

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

3.8 Education loan interest rate in different Banks :

Banks/NBFC Loan Amount Rate of Interest

Up to Rs. 4 Lakhs 15.20%
Loans greater than Rs. 4 Lakhs and upto
Axis Bank 14.70%
Rs. 7.5 Lakhs
Loans greater than Rs. 7.5 Lakhs 13.70%
Bank of Baroda For all loan types and amounts 8.50% onwards
For Vidhya Turant Loan Scheme 6.60%
Up to Rs. 4 Lakhs 10.40%
Rs. 4 Lakhs to Rs. 7.50 Lakhs 10.40%
Canara Bank
Loans above Rs. 7.50 lakhs 10.20%
IBA´s Model Loan scheme for Vocational
9.90%
Education & Training
Minimum APR 9.00%
HDFC Bank Maximum APR 13.86%
Average APR 11.57%
Kotak Mahindra Bank For all loan types and amounts 11.5% to 24%
PNB Kaushal 8.55% onwards
PNB Saraswati/Udaan 10.30% onwards
PNB Pratibha (for admission to IITs , IIMs
8.45% onwards
Punjab National Bank and XLRI Jamshedpur)
PNB Pratibha (for admission to other
8.55% onwards
colleges)
PNB Honhaar 10.45%
Up to Rs. 7.5 Lakhs 10.25%
State Bank of India
Above Rs. 7.5 Lakhs 10.50%
Avanse For all loan types and amounts 10% to 16.50%
Credila For all loan types and amounts 11.85% onwards

Govt. First Grade College, PG Centre, Davangere Page 31

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

3.8 Education loan interest rate in different Banks within India & Abroad:

Bank Education Loan Education Loan

Interest Rates in Interest Rates
India in Abroad

Karnataka Bank 10.90% 10.90%

Avanse DHFL Education Loan 11.50% 11.50%

Axis Bank Education Loan 13.70% 13.70%

Bank of Baroda Education Loan 8.40% 9.15%

Bank of India 9.85% 9.85%

Bank of Maharashtra 10.25% 10.25%

Canara Bank 9.95% 9.95%

Central Bank of India 10.10% 10.00%

Corporation Bank 10.90% 10.90%

Federal Bank 10.85% 10.85%

IDBI Bank 9.50% 9.50%

Indian Bank 8.60% 10.60%

Indian Overseas Bank 10.65% 10.65%

Karur Vysya Bank 11.35% 11.35%

OBC 10.40% 10.40%

PNB 8.45% 10.45%

KARNATAKA BANK LTD., 8.85% 10.00%

UCO Bank 10.65% 10.65%

Union Bank of India 10.20% 10.20%

United Bank of India 10.50% 10.50%

Govt. First Grade College, PG Centre, Davangere Page 32

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

CHAPTER 4

ANALYSIS AND INTERPRETATION OF DATA

TABLE -4.1 :
Table showing the age of Respondents :

Age No. of Percentage

Respondents (%)
15-20 16 32
20-25 32 64
25-30 2 4
30 & above 0 0
Total 50 100

Graph 4.1 showing on the basis of Age group :

70 64
60
50
40 32 32 age
30
Percentage
20 16

10 2 4
0 0
0
15-20 20-25 25-30 30& above

From the above table, It is clears that, out of 50 respondents, 32% of them
belong to the age group of 15-20 years, 64% to 20-25 years, 4% respondents
belong to the age group 25-30 years. Majority of the respondents are between
20-25 years.

Govt. First Grade College, PG Centre, Davangere Page 33

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

TABLE -4.2 :
Table showing classification of Respondents on the basis of Gender:

Gender No. of Percentage

Respondents (%)
Male 10 20
Female 40 80
Total 50 100

Graph 4.2 showing classification of Respondents on the basis of Gender:

90 80
80
70
60
50 40 Gender
40
Percentage
30 20
20 10
10
0
Male Female

The above table shows that, among the 50 respondents, 20% them are male
respondents and 80% are female respondents. Majority of the respondents are
between female.

Govt. First Grade College, PG Centre, Davangere Page 34

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

TABLE -4.3 :
Table showing of respondents on the basis of Educational Qualification :

Gender No. of Percentage

Respondents (%)
Upto SSLC 00 00
PUC 00 00
UG 44 88
PG 6 12
Others 00 00
Total 50 100

Graph 4.3 showing classification of Respondents on the basis of Gender:

140

120

100

80 88

60 Percentage
Qualification
40

20 44
0 0 12
0
6
SSLC 0
PUC
UG
PG
OTHER

From the above table, it is clears that, the 50 respondents, 88% of the
respondents qualification is under graduation. 12% of the respondents are post-
Graduation. Majority of the respondent’s education qualification is maximum
Under graduation.

Govt. First Grade College, PG Centre, Davangere Page 35

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

TABLE -4.4 :
Table showing classification of Respondents on the basis of Monthly Income
(Family) :

Income No. of Percentage

Respondents (%)
Below 10,000 10 20
10-20,000 18 36
20-30,000 10 20
30,000 & above 12 24
Total 50 100

Graph 4.4 showing classification of Respondents on the basis of Monthly Income

(Family ):

60
50
40
36
30 Percentage
20 20 24
20 Income
10 18
10 10 12
0
Below 10k 10-20k 20-30k 30k &
above

The above table states that, among the 50 respondents, 20% respondents
Monthly income of the family is below 10,000, 36% respondents family is
income is 10-20,000, 20% Rs.. 20-30,000 and 24% of the respondents family
income is above 30,000. Majority of the respondents income is between 10k to
20k.

Govt. First Grade College, PG Centre, Davangere Page 36

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

TABLE -4.5 :
Table showing classification of Respondents on the basis awareness level of
Education loan :

Awareness No. of Percentage

Respondents (%)
Yes 50 50
No 0 0
Total 50 100

Graph 4.5 showing classification of Respondents on the basis of awareness level

of Education loan :

160
140
120
100
100
Percentage
80
Awareness
60
40
50
20
0 0
Yes No

The above table shows that, among the 50 respondents 100% respondents
are aware of the Education loan. So Question of Majority doesn’t arise.

Govt. First Grade College, PG Centre, Davangere Page 37

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

TABLE -4.6 :
Table showing classification of Respondents on the basis of Applying for loan for
Different Courses :

Courses No. of Percentage

Respondents (%)
Post Graducate / Under Graduate 14 28
Professional 6 12
Technical 30 60
Non-Technical 0 0
Total 50 100

Graph 4.6 showing classification of Respondents on the basis of Applying for

loan for Different Courses :

90
80
70
60 60
50 Percentage
40
Coureses
30 28
20
12 30
10 14
6
0 0
PG/UG Professional Technical Non-Tech

The above table depicts that, out of 50 respondents 28% of the respondents
have taken education loan for Post Graducate/ Under Graduate, 12% for
Professional courses, 60% of respondents have taken for Technical Courses.
Majority of the respondents have taken loan for technical courses .

Govt. First Grade College, PG Centre, Davangere Page 38

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

TABLE -4.7 :
Table showing the Influencing the Respondents :

Courses No. of Percentage

Respondents (%)
Friends 21 42
Relatives 13 26
Neighbours 9 18
Colleagues 7 14
Total 50 100

Graph 4.7 showing the Influencing the Respondents :

14
Colleagues
7

18
Neighbours 9
Percentage
26
Relatives Coureses
13

Friends 42
21

0 10 20 30 40 50

The above table states that, among the 50 respondents 42% respondents
are influenced by their friends 26% by relatives, 18% by neighbours and 14% of
are influenced by colleagues.. Majority of the respondents were influenced by
their friends (42%)

Govt. First Grade College, PG Centre, Davangere Page 39

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

TABLE -4.8 :
Table showing classification of Respondents on the basis of purpose of taking
loan:

Purpose No. of Percentage

Respondents (%)
Higher studies in Abroad 6 12
Higher studies in India 44 88
Total 50 100

Graph 4.8 showing classification of Respondents on the basis of purpose of

taking loan:

88
100

80

60 44 Purpose
40 12 Percentage
20 6 Percentage
0 Purpose
Higher Studies in Higher Studies in
Abroad India

From the above table it is clears that, 50 respondents 12% are secure
Education loan for having Higher studies in abroad and 88% of respondents are
securing loans higher studies in India Majority of the respondents who have
taken education loan is for the purpose having higher education in India i.e.
88% .

Govt. First Grade College, PG Centre, Davangere Page 40

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

TABLE -4.9 :
Table showing classification of Respondents on the based on the opinion
Regarding Easy to Securing Education Loan.

Opinion No. of Percentage

Respondents (%)
Yes 30 60
No 20 40
Total 50 100

Graph 4.9 showing classification of Respondents on the based on the opinion

Regarding Easy to Securing Education Loan.

90
80
70
60 60
50
Percentage
40 40 Opinion
30
20
30
10 20
0
Yes No

The above table shows that, among 50 respondents 60% of the respondents
pinioned that securing education loan is easy and remaining 40% find it difficult
to secure education loan. Majority of the respondents are of the opinion that it
is easy to secure education loan for higher education.

Govt. First Grade College, PG Centre, Davangere Page 41

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

TABLE -4.10 :
Table showing classification of Respondents .

Amount (Rs.) No. of Percentage

Respondents (%)
Less than 2.5 Lakh 24 48
2.5 Lakh to 5 Lakh 20 40
More than 5 lakh 6 12
Total 50 100

Graph 4.10 showing classification of .

48
50
45
40
40
35
30
24
25 Opinion
20
20 Percentage
15 12
10
6
5
0
Less than 2.5 lakh 2.5 to 5 lakh more than 5 lakh

The above table shows that, out of 50 respondents 48% of the

respondents have taken education loan of less than Rs. 2.5 lakh, 40% have taken
the loan between 2.5 to 5 lakh and 12% are taken the loan amount of More than 5
lakh. Majority of the respondents have taken the loan amount of Less than
2.5 lakhs ( 48%)

Govt. First Grade College, PG Centre, Davangere Page 42

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

TABLE -4.11 :
Table showing classification of Respondents on the basis of Rate of Interest.

Rate of Interest. No. of Percentage

Respondents (%)
8-10% 18 36
10-12% 26 52
12-14% 9 18
14% & above 0 0
Total 50 100

Graph 4.11 showing classification of the basis of Rate of Interest.

60
52
50

40 36

30 26 Rate of Int.

18 18 Percentage
20
9
10
0 0
0
8-10% 10-12% 12-14% 14% & above

From the above table, it is clears that, out of 50 respondents 36% of

respondents have taken education loan at a rate of 8-10% , 52% at a rate of 10-
12% and 18% of them have taken loan at a rate of 12-14% . Majority of the
respondents surveyed have taken loan at the rate of 10-12%.

Govt. First Grade College, PG Centre, Davangere Page 43

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

TABLE -4.12 :
Table showing of Respondents on the basis of Reminder and recovery.

Opinion No. of Percentage

Respondents (%)
Yes 44 88
No 6 12
Total 50 100

Graph 4.12 showing classification of of Respondents on the basis of Reminder

and recovery.

90
80
70
60 60
50 Percentage
40 40 Opinion
30
20
30
10 20
0
Yes No

education loan is easy and remaining 40% find it difficult to secure

education loan. Majority of the respondents are of the opinion that it is easy
to secure education loan for higher education.

Govt. First Grade College, PG Centre, Davangere Page 44

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

TABLE -4.13 :
Table showing of Respondents on the basis of Reminder and recovery.

Opinion No. of Percentage

Respondents (%)
Yes 44 88
No 6 12
Total 50 100

Graph 4.13 showing classification of of Respondents on the basis of Reminder

and recovery.

88

90
80
70
60
44 Opinion
50
40 Percentage
30 12
20
6 Percentage
10
0 Opinion
Yes No

From the above table, it is clears that out of 50 respondents 88% of

respondents opinion that they have been remained for repayment of laon and
remaining 12% are not reminded for repayment. Majority of the respondents
have receive reminder notice by the bank for repayment of loan i.e. 88%.

Govt. First Grade College, PG Centre, Davangere Page 45

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

TABLE -4.14 :
Table showing of Respondents opinion regarding Problem faced while securing
Loan.

Opinion No. of Percentage

Respondents (%)
Yes 22 44
No 28 56
Total 50 100

Graph 4.14 showing of Respondents opinion regarding Problem faced while

securing Loan.

60 56

50 44

40
28 Opinion
30 22
Percentage
20

10

0
Yes No

From the above table It is clears that 50 respondents, 44% of respondents

have faced problem while securing the loan and 56% of respondents have not
faced any problem. Majority of the respondents i.e. 56% of them have not
faced any serious problems while securing the education loan.

Govt. First Grade College, PG Centre, Davangere Page 46

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

TABLE -4.15 :
Table showing the Respondents opinion about KBL Services

Opinion No. of Percentage

Respondents (%)
Excellent 4 8
Very Good 22 44
Good 22 44
Average 2 4
Total 50 100

Graph 4.15 showing the Respondents opinion about KBL Services

70

60

50
44 44
40
Percentage
30 Opinion
20

10 8 22 22
4 4
0 2
Excellent V.Good Good Average

From the above table, it is clears that out of 50 respondents 8% of

respondents are of the opinion that services provided by the Bank is excellent,
44% is very good, 44% of Good and only 4% are of the opinion that the services
provided are average. Majority of the respondents opinion regarding KBL
services is good and very good.

Govt. First Grade College, PG Centre, Davangere Page 47

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

TABLE -4.16 :
Table showing opinion regarding Satisfaction.

Opinion No. of Percentage

Respondents (%)
Yes 44 88
No 6 12
Total 50 100

Graph 4.16 showing opinion regarding Satisfaction.

140

120
100
88
80 Percentage
60 Opinion
40
44
20
12
6
0
Yes No

From the above table, it is clears that out of 50 respondents 88%

respondents are satisfied with their Banks and 12% of respondents not satisfied.
Majority of the respondents are satisfied with their bank.

Govt. First Grade College, PG Centre, Davangere Page 48

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

TABLE -4.17 :
Table showing opinion regarding Loyalty.

Opinion No. of Percentage

Respondents (%)
Yes 40 80
No 10 20
Total 50 100

Graph 4.17 showing opinion regarding Loyalty.

140

120
100
88
80 Percentage
60 Opinion
40
44
20
12
6
0
Yes No

From the above table, it is clears that out of 50 respondents 80%

respondents who have taken education loan are willing to recommend others to
take education loan from KBL and 20% of them are not willing to recommend
others. Majority of the respondents are willing to recommend others.

Govt. First Grade College, PG Centre, Davangere Page 49

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

CHAPTER 5

FINDING, SUGGESTIONS AND CONCLUSION:-

5.1 Finding:
I have got the good response from the respondents regarding educational

loan, in this study are study the awareness level of respondents regarding

education loans provided by different banks. There I find.

 Majority of the respondents are aware of educational loan (100)

 Most of the respondents are aged between 20-25 years and

Majority of them are female (80)

 Majority of the respondent‟s family income is10000-20000/- per month

who have taken education loan for technical course.

 Most of the respondents have taken loan for higher education in India.

 Most of the respondents are of the opinion that it is easy to get education

loans and have taken loan amount less than 2.5 lakhs.

 Majority of the students given opinioned that the interest rate is high and

recommending to extent the time for repayment of loans.

5.2 Suggestions:

 The candidate who applies for educational loan should be properly aware

regarding the various banks process and procedures that are to be fulfilled,

as they face problem when they do not have proper knowledge the same.

 Majority of the respondents suggested that banks are cooperative with their

customers.

Govt. First Grade College, PG Centre, Davangere Page 50

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

 The students studying in the professional colleges avail the highest amount

of loans. Therefore the bank should make same new initiatives providing

loans for the other courses.

 Some respondents are says that reduce the interest rates and extent the time

to recover the loan. Because all are not get a immediate job when after

completion of their courses. So they recommending to the banks.

 Students of self-financing colleges have got the highest loan when

compared to students of government aided colleges. Because they are not

having necessity to taking education loan because less fees structure.

Hence it is suggested that is for creating awareness in self financing

colleges.

 The banks provide education loans only these students who give securities

to banks, but those students who belong with poor families they can‟t give

the security, so banks must make some provisions for the students who

belong to poor families.

5.3 Conclusion:

My project title being “Financial assistance towards education loan by

Karnataka Bank (special reference to Shamanur Road branch, Davangere). After

completion of the survey after careful analysis of the questionnaire and their

opinion about the education loan. It can conclude that the public have favorable

opinion about education loan in KARNATAKA BANK LTD.,.

Govt. First Grade College, PG Centre, Davangere Page 51

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

The respondents were securing the education loan by comparing with other

education loans provided by other banks like Vijaya bank, Syndicate bank nearest

competition for KARNATAKA BANK LTD., in respect of education loan is the

Vijaya bank and syndicate bank.

Now a days education is plays a vital role in human life and also it is an

expensive proposition because the aided, the government and the self-financing

colleges follow different fee structure. At the same time all the student‟s family

income is not supportive to the fee structure. Therefore there is a need of

educational loan for their studies.

To conclude, it is rightly said that, the student having interest to go for

higher education can make it true by securing loan from banks though the family

economic position fails to support to make the dreams true.

Govt. First Grade College, PG Centre, Davangere Page 52

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

QUESTIONNAIRE

Dear Sir/Madam,

I am a student of IV Sem M.com, in Government First Grade College,

Davangere As partial requirement of degree M.Com course, I am doing a
project on “Financial Assistance towards Education Loan by Karnataka
Bank Ltd., (with Special Reference to Karnataka Bank Ltd., Shamanur
Road Branch, Davangere ) for the partial fulfillment of course. I request you
to fill up the questionnaire, which will help me to gather data for the project.
The information collected will be used only academic purpose.

Thank you, Yours faithfully,

RENUKA.K.

1. Name: ______________________

2.Address :________________________________

3. Age
(a) 15-20 (b) 20-25
(c) 25-35 (d) 30 & above
4. Gender

(a) Male (b) Female

5. Education Qualification :
(a) Upto SSLC (b) Graduate
(c) PUC (d) Post Graduate (e) Others
6. Monthly Income :
a) Below 10000 b) 20000-30000
c) 10000-20000 d) 30000 & above

Govt. First Grade College, PG Centre, Davangere Page 53

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

7. Do you know about education loan ?

a) Yes b) No
8. Have you secured education loan ?
a) Yes b) No
9. If Yes from which Bank ?
a) Karnataka Bank Ltd., b) Canara Bank
c) SBI d) Syndicate Bank
e) Others : __________
10. For which types of courses, you are applying for education loan ?
a) PG/ UG courses (PGDBM, M.Com. M.Sc., MBA, MCA etc)
b) Professional course (CA, ICWA, etc.)
c) Technical Courses ( B.tech, M.tech, etc.,)
d) Non-Technical Courses.
11. How did you come to know ?
a) Bankers b) Internet
c) Relatives d) Newspaper
12. What factors influenced you to securing education loan
a) Friends b) Relatives
c) Neighbours d) Colleagues
13. Why do you require education loan
a) Higher studies in abroad
b) Higher Studies in India
c) Others
14. According to you is it easy to get education loan ?

a) Yes b) No

Govt. First Grade College, PG Centre, Davangere Page 54

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

15) What was the security given for Education Loan ?

a) Upto 4 lakh No Security

b) Above 4 lakh -7 lakh third party guarantee

c) Above 7.5 lakh tangible collateral security for full value of loan

16) How much loan you have taken ?

a) less than 2.5 lakh

b) 2.5 lakh to 5 lakh

c) more than 5 lakh

17) What is the interest rate ?

a) 8 – 10% b) 10-12 % c) 12-14% d) 14% & above

18) Does your banks lends you remainder notice regarding the recovery of loan

a) Yes b) No

19) How much loan do you get ?

a) 100% of the amount applied

b) 80% of the amount applied

c) Less than 80% of the amount applied

20) Have you come across any problem in security the education loan

a) Yes b) No

21) Response and behaviours of Bank staff?

a) Informative b) Communicative

c) Co-operative d) Conviniencing

Govt. First Grade College, PG Centre, Davangere Page 55

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

22) About recovering process of education loan ?

a) Simple b) Complicated

23) KBL Services are:

a) Good b) Excellent c) Very good d) Average

24) Are you satisfied with you r Bankers?

a) Yes b) No

25) If No why…………………………………

26) Would you like recommending this education loan to others?

a) Yes b) No

Suggestion if any ……………………………………………………….

Date :

Place : Signature.

Govt. First Grade College, PG Centre, Davangere Page 56

Financial Assistance towards Education Loan by Karnataka Bank Ltd.,

BIBLIOGRAPHY

Text books :

2.K.D. Basava – Law & Practice of Banking

Websites :

www.kbl.com

www.business.it.karnatakabankltd.

www.netbank.kbl.com

www.wikipedia/kar/ltd

Magazines :

Journals of Internet Banking and commerce Dec. 2019 Vol. 22. Issue 3

Business India April 18, 2010

Revista Information Economica nr. (2) 46/2008, page 56-77

Professional Banker - August 2008, The ICFAI University press.

Govt. First Grade College, PG Centre, Davangere Page 57