The Ministry of Minority Affairs (MoMA) has discontinued the scheme of interest subsidy on education loans for overseas studies for students belonging to minority communities (Padho Pardesh).
All banks were notified by the Indian Banks’ Association last month about the discontinuation of the Padho Pardesh Interest Subsidy Scheme from 2022-23. The scheme so far was being implemented through Canara Bank, the designated nodal bank.
The existing beneficiaries as on March 31, 2022, will continue to receive the interest subsidy during the moratorium period of the loan, subject to compliance with the extant guidelines, according to the Association’s communication to Banks.
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The reason why the scheme has been discontinued could not be ascertained. Bankers said MoMA has not given any reason for its decision in this regard.
The objective of the scheme, which was part of the then Prime Minister’s June 2006 fifteen-point program for the welfare of minorities, is to award interest subsidy to meritorious students belonging to economically weaker sections of notified minority communities to provide them with better opportunities for higher education at Masters, M.Phil and Ph.D levels abroad and enhance their employability.
About the scheme
Under the scheme, interest payable by the students availing education loans as prescribed under the Education Loan Scheme of the IBA for the period of moratorium (that is course period, plus one year or six months after getting a job, whichever is earlier) shall be borne by the Government of India.
After the period of moratorium is over, the interest on the outstanding loan amount shall be paid by the student, in accordance with the existing Educational Loan Scheme. The Candidate will bear the Principal institutions and interest beyond the Moratorium period.
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As per the scheme, the total income from all sources of the employed candidate or his/ her parents/guardians in case of an unemployed candidate shall not exceed ₹6 lakh per annum. Thirty-five per cent of seats are earmarked for girl students. In case of non-availability of girl students, seats can be transferred to boy students.
As per MoMA’s latest annual report, during the year 2020-21, an amount of ₹20.20 crore was released to Canara Bank for reimbursement of interest subsidy of fresh plus renewal candidates under the Scheme.