NEW DELHI: In a landmark of sorts, the Indian Banking Association (IBA) has decided to extend the ambit of its Model Educational Loan Scheme to include vocational education and training.
This means that all banks, which are associated with IBA, as well as a other banks that RBI may include, will now also offer education loans for students in the vocational sector.
“Vocational courses offered by ITIs ( Industrial Training Institutes), ITCs ( Industrial Training Centres), polytechnics and other technical bodies were not covered in the Model Educational Loan Scheme. (Some banks do provide loans for three-year diploma courses offered by polytechnics.) However, in view of the initiatives being taken by the government of India in skill development in recent years, a need was felt for providing institutional funding for students undergoing specialized skill development programmes in recognized institutions. The government has estimated that the country would require 10 to 15 million skilled workers every year to support the development process,” says the IBA circular on the model loan scheme for vocational education and training.
S Ramadorai, Skills Advisor to the Prime Minister, believes that this is an extremely significant move.
The new scheme will be applicable for those studying at institutions run by the government as well as recognized private institutions. People of any age can opt for this loan.
For a course whose duration is up to three months, students can take a loan of Rs 20,000. The figure goes up to Rs 50,000 for a course between three and six months, and Rs 75,000 for a course between six month and a year. A loan of Rs 1.5 lakh can be awarded for students pursuing a course that is over a year long. Banks can consider loans worth higher amounts for course that are over a year long, or for specific courses offered by reputed institutions.