WEST BENGAL MINORITIES’ DEVELOPMENT & FINANCE CORPORATION

Amber, DD-27E, Sector-I, Salt Lake City, Kolkata-64

STANDARD OPERATING PROCEDURE (SOP) FOR EDUCATION LOAN

MINORITY AFFAIRS & MADRASAH EDUCATION DEPARTMENT

GOVT OF WEST BENGAL

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Contents

1. Education Loan ................................................................................................... 4

1.1 Introduction .................................................................................................... 4

1.2 Objectives ..................................................................................................... 4

2. Procedure of Education Loan ................................................................................ 4

2.1 Categories of Loan Applicants ........................................................................... 4

2.1.1 Fresh Application ...................................................................................... 4

2.1.1.1 Introduction ......................................................................................... 4

2.1.1.2 Eligibility Criteria ................................................................................. 5

2.1.1.3 Documents Required ............................................................................ 5

2.1.1.4 Procedure for Fresh Application.............................................................. 6

2.1.1.5 Post –Application Procedure ................................................................ 10

2.1.2 Renewal Application ................................................................................ 12

2.1.2.1 Introduction ...................................................................................... 12

2.1.2.2 Eligibility Criteria ............................................................................... 12

2.1.2.3 Documents Required .......................................................................... 12

2.1.3 Procedure for Enhancement of Loan Application ............................................ 12

3. No Due Certificate (NDC) ................................................................................ 12

4. Scheduling of Quarterly Instalments and Calculation Methodology ................................ 14

5. Appendices ...................................................................................................... 16

5.1 Appendix 1 ................................................................................................. 16

5.2 Appendix 2 ................................................................................................ 20

5.3 Appendix 3 ................................................................................................ 25

5.4 Appendix 4 ................................................................................................ 26

5.5 Appendix 5 ................................................................................................ 28

5.6 Appendix 6 ................................................................................................ 29

5.7 Appendix 7 ................................................................................................ 31

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1. Education Loan

1.1 Introduction

Education loans are monetary help provided to domicile youths who are domicile of West Bengal and are pursuing higher studies in professional and technical fields of study. The students should be pursuing their studies in a private or a government college. The loans are provided by the corporation with interest rates that are comparatively, lesser than those imposed by banks and other financial institutions. For very poor students, the rate of interest is as low as 3% at a reducing balance rate.

1.2 Objectives

The objectives of education loan are:

To provide financial support to minority students to pursue higher studies in professional and technical fields of study

To provide financial assistance to minorities who cannot afford loans from financial institutions at exorbitant rates.

2. Procedure of Education Loan

2.1 Categories of Loan Applicants

There are three categories of loan viz. Fresh Application, Renewal Application and Enhancement Application. The details are as follows:

2.1.1 Fresh Application

2.1.1.1 Introduction

It is applicable to students who are applying for the loan for the first time. There are further two subtypes of fresh applications viz. within and outside the territory of India.

1. Abroad – Students who are domicile of West Bengal and are pursuing their studies abroad or wish to pursue their studies abroad are eligible.

2. India – Students are domicile of West Bengal and wish to pursue their studies in India are eligible.

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2.1.1.2 Eligibility Criteria

1. The candidate must have obtained at least 50% marks in last examination (for Indian candidates).

2. The candidate must have obtained at least 65% marks in last examination (for students outside India).

3. The age of the candidate must be within 16 to 32 years as on 1st January of the year of the application.

Income Criteria –

SL. NO.

CATEGORY ANNUAL FAMILY INCOME ADMISSIBLE RATE

OF INTEREST RURAL URBAN

1. Both Male &

Female Up to Rs. 98,000 Up to Rs. 1,20,000 3% per annum

2. Male From Rs. 98,001 to Rs. 6,00,000

From Rs. 1,20,000 to Rs.

6,00,000 8% per annum

3. Female From 98,001 to Rs. 6,00,000

From Rs. 1,03,000 to Rs.

6,00,000 5% per annum

2.1.1.3 Documents Required

The following should be attached together with the hard copy of the filled-up application form for the fresh applicants:

1. Admit card and mark sheet of Madhyamik/Secondary examination 2. Mark sheet of Higher Secondary examination 3. Income certificate issued by Pradhan Councellor/ Sabhapati/ any gazetted

officer 4. Fee structure of current educational institute. 5. Last examination certificate (if any). 6. Guardian’s and candidate’s ID proof. 7. Rank card for Entrance Exam (if any). 8. Bank pass book with photograph or Permanent Account Number (PAN)

Card issued by the Income Tax Department or Passport or Certificate of

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Identity having photo of such student issued by a head master or principal of the school under official seal of the school or Driving License issued by the Licensing Authority under the Motor Vehicles Act, 1988 (59 of 1988).

9. Joint account pass book copy and 22 blank cheques with signatures of the joint account holders have to be submitted for repayment purposes in the future.

10. Post Dated Cheques (PDC): A total of 22 PDCs are taken from the candidate for the repayment purpose. This procedure of repayment will start after six months of completion of the course or on getting any gainful employment whichever is earlier. The candidate will required to keep sufficient funds in the account before the PDCs are sent through the bank. A penalty will be charged to the candidate is case of cheque dishonour. The cheques will be sent quarterly (every three months).

2.1.1.4 Procedure for Fresh Application

The candidate is required to log on to www.wbmdfc.net and fill up the fields on the portal as shown in the following samples.

SAMPLES:

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Finally, the candidate has to submit the form and note down the registration ID for further use. The candidate is required to take a print out of the application form.

2.1.1.5 Post –Application Procedure

Papers to be submitted during counselling by Head Office

I. Agreement Paper – This document is an agreement that needs to be made between the candidate and the guardian. This agreement entails that payment of principal amount in twenty instalments, the loan amount being asked for and the reason for applying for such loan needs to be agreed upon in writing by the candidate as well as his/her guardian. A sample document has been attached in Appendix 1. Signatures of the candidate and the guardian need to be done on every page of the document. This document needs to be submitted in a Rs. 10 stamp paper for Indians and Rs. 100 stamp paper for abroad students.

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II. Letter of Guarantee – This document needs to be read and approved upon by a guarantor who is a salaried employee of a Central or State government or a semi-Central or State government corporation or organisation. The guarantor should have worked in that government or semi- government corporation or organisation for a minimum of 7-8 years. The age limit of the guarantor needs to be 53 years. After approving of all instructions mentioned in the Letter of Guarantee, the employer (The head of the Office/Appointing Authority of the Guarantor) needs to verify that that guarantor is rightfully employed in his/her government or semi- government corporation or organisation, with his/her signature. A sample of this document has been attached in Appendix 2. This document needs to be submitted in a Rs. 10 stamp paper for Indians and Rs. 100 stamp paper for abroad students.

III. Declaration Copy – This document needs to be filled in by the candidate declaring that all details in his/her application form are correct and genuine. This document needs to be provided through a Notary or an Affidavit by a First Class Magistrate. A sample of this document has been attached in Appendix 3. This document needs to be submitted in a Rs. 10 stamp paper for Indians and Rs. 100 stamp paper for abroad students. A sample of the declaration copy of an abroad student has been attached in Appendix 4.

IV. Signature Verification Form – This document should consist of a verification conducted by the Branch Manager of the bank where the candidate possesses a joint savings bank A/C with the guardian. There is a need to produce two copies of the filled up Signature Verification Form, one being that of the candidate and the other being that of the guardian. This verification pertains to the genuineness of the signatures of the joint bank A/C holders. Signatures of the joint A/C holders need to be given on the separate respective forms. A sample of this document has been attached in Appendix 5.

V. Promissory Note/Money Receipt – This document needs to consist of two Revenue Stamps that need to be collected by the candidate from the area Post Office priced at Re. 1. The candidate and the guardian need to sign across the Revenue Stamps on both sides, i.e. Promissory Note and Money Receipt. The fields contained in this document need not be filled up by the candidate or the guardian. A sample of this document has been attached in Appendix 6.

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2.1.2 Renewal Application

2.1.2.1 Introduction

The renewal application of the educational loan should be done in an offline mode by approaching the corporation.

2.1.2.2 Eligibility Criteria

The criteria for this loan will be based on the criteria of the fresh application done before.

2.1.2.3 Documents Required

The following documents should be enclosed for renewal application.

1. Xerox copy of the sanctioned letter (a sample has been attached in Appendix 7).

2. Current year bona fide certificate. 3. Previous year mark sheet copy (last semester). 4. Application to the Managing Director of the corporation for release of

renewal amount.

2.1.3 Procedure for Enhancement of Loan Application

If anyone is unsatisfied by the sanctioned amount, then he/she should give an application to the Managing Director of the corporation to enhance the amount of the loan. The decision will be, ultimately, taken by the higher authority after proper enquiry and verification.

After submitting the necessary legal documents, if the application is approved and accorded by the corporate authority, a sanction letter for the enhancement of the loan will be issued to the candidate.

3. No Due Certificate (NDC)

After completing all the repayment and other charges, if any, (e.g. penalty for dishonour cheque or interest) candidates may give an application to the Managing Director to get the NDC.

Documents to be submitted for NDC

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I. An Application to the Managing Director. II. All the Xerox copies of the money received (if any installment, pay

offline). III. All the Xerox copies of the bank statement/pass book (if the instalments

are paid from bank). IV. Sanction letter’s Xerox copy.

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4. Scheduling of Quarterly Instalments and Calculation Methodology

A quarter is a period of three months out of a total of twelve months in one year. The quarterly instalments can be scheduled based on the amount of quarters within which the candidate is willing to pay the EMIs. Based on the sample of the sanction letter attached in Appendix 7, the number of quarters is twenty, thus making the time period within which the EMI will be paid will be five years. The quarterly payments of the principal amount, along with the interest amount, have been given in Tables 1, 2 and 3.

Based on the sample of the sanction letter attached in Appendix 7, the following calculation should be considered for calculation of the respective loan amounts sanctioned. The principal loan amount is Rs. 16, 00,000/- and the period to pay back the loan is in twenty quarterly instalments, i.e. five years starting from January 2019.

Principal Amount (In Rs.)

Divided by 5 (because there are five years within which the loan

needs to be paid) (In Rs.)

Amount to be paid in Each Year (In

Rs.)

Loan Amount Divided by 4 (because

there are four quarters in a year) (In Rs.)

Loan Amount to be paid in Each Quarter

(In Rs.)

16,00,000 16,00,000/5 3,20,000 3,20,000/4 80,000

(Table.1: Calculation of Loan Amount to be paid in Each Quarter)

Principal Amount Rate of Interest

Total Interest Amount needed to be paid over Five

Years (In Rs.)

Interest Amount to be

paid Each Year (out of five

years) (In Rs.)

Interest Amount to be paid Each

Quarter of a year (out of four

quarters in one year) (In Rs.)

16,00,000 3%

16,00,000*3/100 = 48,000

48,000/5 = 9,600

9,600/4 = 2,400

5% 16,00,000*5/100

= 80,000 80,000/5 =

16,000 16,000/4 =

4,000

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8% 16,00,000*8/100

= 1,28,000 1,28,000/5 =

25,600 25,600/4 =

6,400

(Table.2: Calculation of Interest Amount to be paid in Each Quarter)

Sl. No.

Rate of Interest

Year Loan Amount to be paid in each Quarter (every three

months) (In Rs.)

Annual Family Income Criteria (In Rs.)

Can be Applied by

1 3%

2019

80,000 + 2,400 = 82,400

1,000 to 1,20,000 Male and Female

2020 2021 2022 2023

2 5%

2019

80,000 + 4,000 = 84,000

1,20,001 to 6,00,000 Female 2020 2021 2022 2023

3 8%

2019

80,000 + 6,400 = 86,400

1,20,001 to 6,00,000 Male 2020 2021 2022 2023

(Table.3: Calculation of Total Amount to be paid in Each Quarter)

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5. Appendices

5.1 Appendix 1

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5.2 Appendix 2

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5.3 Appendix 3

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5.4 Appendix 4

REPLICA

Rs 100 non judicial stamp paper

BEFORE THE LD. COURT OF JUDICIAL MAGISTRATE (1st Class) , KOLKATA A F F I D A V I T

I, -----------, Son of Late --------------- , aged about ----- year by faith Islam , residing at 3FA, Natun Nagar Apt. (Naya Basti) , B.B.T. Road , P.s. – Maheshtala , District 24 Parganas ( South), Kolkata- 700 088 , west Bengal , do hereby solemnly affirm and declare as follows:-

1) That I am a citizen of India by birth and permanent resident of above noted address.

2) That an education loan has yet to be granted in favor of my daughter DISHA AYUB , now he has been studying DHAKA NATIONAL MEDICAL COLLEGE , BANGLADESH , for MBBS as a Bachelor Degree Candidate tough in English from January , 2019 for the purpose of better Education a sum Rs. ---------( ------------------------------) only as loan ( Education Loan).

3) That I hereby declare that after completion of his Course of 5(Five) years of MBBS Degree (Bachelor of Medicine, Bachelor of Surgery). I will repay the loan amount installment EMI after six months from the date of February , 2024, Rs._________________ ( ____________________________________________) Only quarterly in 20 (Twenty) installment i.e. within five years from February , 2024 to December, 2029 . I will bound to repay the loan amount Rs._________________X20 installment total of Rupees ---------------( ----------------------------) only and application with ----% interest charge per annum.

P.T.O.

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(2)

4) That if in future I neglect or unable to pay the bill loan amount of Rs ________(----------) only within stipulated period then the W.B.M.D.F.C. Authority may take legal action against me in future.

5) That all the statements of this affidavit are true to the best of my knowledge.

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5.5 Appendix 5

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5.6 Appendix 6

(Signature should be done across the Revenue Stamp)

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(Signature should be done across the Revenue Stamp)

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5.7 Appendix 7