Central Sector Interest Subsidy (CSIS) Scheme: Financial Support to Economically Weaker Section (EWS) 

The Central Sector Interest Subsidy (CSIS) Scheme was launched on 1st April, 2009 by the Ministry of Human Resource Development, which is now known as the Ministry of Education (MoE). The Cabinet Committee on Economic Affairs under the Chairmanship of Prime Minister Shri Narendra Modi gave its approval for continuation of Credit Guarantee Fund for Education Loans Scheme and continuation and modification of Central Sector Interest Subsidy Scheme for period from 2017-18 to 2019-20. The revised scheme intended to provide education loans to 10 lakh students during this period. Under the Scheme, full interest subsidy is provided for the education loan taken from Scheduled Banks under the Model Education Loan Scheme of Indian Banks’ Association. It covers the course duration + 1 year. This was initially made available for all the professional/technical courses in India and students with annual gross parental income up to ₹4.5 lakhs were eligible. Credit Guarantee Fund for Education Loans (CGFEL) Scheme provides guarantee for the education loan under the Model Education Loan Scheme of Indian Banks’ Association. It is disbursed by the banks without seeking any collateral security and third-party guarantee, for a maximum loan amount of ₹7.5 Lakhs. It is mainly targeted to extend financial support  to the Indian students belonging to the Economically Weaker Section (EWS) category. 

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The ceiling with respect to educational loans has been increased to a loan amount of ₹10 lakh from the year 2022-23. Interested applicants can visit the National Portal for Credit Linked Government Schemes – Jan Samarth for more information. 

Under the scheme, the Government of India carries the interest payable on education loans during the moratorium period, which includes the course duration plus one year after its completion.  

To be considered eligible under the CSIS scheme, the annual family income of students must not exceed ₹4.5 lakh. Furthermore, the students are not required to provide any collateral or third-party security for education loans sanctioned up to ₹7.5 lakh. 

The CSIS scheme is applicable on loans availed under the Model Education Loan Scheme of the Indian Banks’ Association (IBA) for pursuing technical/professional courses only in India. However, Canara Bank is the nodal bank appointed by the Ministry of Education, which releases subsidy amounts to Scheduled Banks.  This scheme is adopted by all Scheduled Banks/Regional Rural Banks (RRBs)/Cooperative Banks, which are linked with the Model Education Loan Scheme of the IBA. 

The article covers all the crucial aspects of the Central Sector Interest Subsidy Scheme vis-a-vis eligibility criteria, necessary documents, interest rates, and other key features.

Important Points Under the Central Sector Interest Subsidy Scheme (CSIS)

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The following important points are useful for the applicants interested in applying for education loans under the Central Sector Interest Subsidy Scheme (CSIS). They are as under:

  • Interest subsidy refers to a financial assistance program where the government covers a portion or all of the interest accrued on a loan taken by an individual.
  • All the private, public, small finance, payment, regional rural, and foreign banks in India liable for low-interest loans from the Reserve Bank of India (RBI) are known as Scheduled Banks. Additionally, these banks are included in the Second Schedule of the Reserve Bank of India Act, 1934. 
  • The Indian Banks’ Association (IBA) was formed on September 26, 1946. The Model Education Loan Scheme of the IBA is designed to provide financial assistance from the banks to those students who want to pursue higher studies in India or abroad under affordable terms and conditions.

Central Sector Interest Subsidy (CSIS) Scheme – General Overview

Name of the Scheme  Central Sector Interest Subsidy Scheme
Provider  Ministry of Education (MoE)
Beneficiaries Indian students who are pursuing undergraduate, postgraduate, or integrated professional/technical courses in India 
Eligibility Economically Weaker Section (EWS) category students with annual family income up to ₹4.5 lakh
Maximum Loan Amount Up to ₹10 lakh
Interest Rate  It varies according to the Benchmark Prime Lending Rate (BPLR)/Base Rate of the individual banks as per the Model Education Loan Scheme of the IBA.
Moratorium Period Course duration plus 1 year after its completion
Application Mode Online/offline
Official Website  education.gov.in/scholarships-education-loan-4

Central Sector Interest Subsidy (CSIS) Scheme – Eligibility

To be considered eligible under the Central Sector Interest Subsidy Scheme, students are required to follow the eligibility criteria mentioned below:

  • The education loans are provided under the Model Education Loan Scheme of the Indian Banks’ Association (IBA). 
  • Applicants must be Indian citizens.
  • Applicants must belong to the Economically Weaker Section (EWS) category.
  • The annual family income of an applicant should not exceed ₹4.5 lakh from all sources.
  • Students must pursue undergraduate, postgraduate or integrated professional/technical courses in India.

Central Sector Interest Subsidy (CSIS) Scheme – List of Eligible Institutions & Courses

The CSIS scheme applies to students pursuing specific undergraduate and postgraduate technical/professional courses approved by the universities/colleges/institutions listed below. 

  • Graduate or postgraduate professional/technical courses approved by the Centrally Funded Technical Institutions (CFTI) and Institutes of National lmportance (INI) are eligible under the CSIS loan scheme.
  • National Assessment and Accreditation Council (NAAC)-approved universities/institutions. 
  • National Board Accreditation (NBA)-approved professional courses.

Important links of approved institutions have been tabulated below:

Approved Institutions/Courses Links of Approved Institutions/Courses
Centrally Funded Technical Institution List of Centrally Funded Technical Institution
Institutions of National Importance List of Institutions of National Importance
Courses Approved by the National Board of Accreditation List of Courses Approved by National Board of Accreditation
Institutions Approved by the National Assessment and Accreditation Council List of Institutions Approved by National Assessment and Accreditation Council

Note:- In the case of any queries, the loan provider (banks) may approach University Grant Commission (UGC)/All India Council for Technical Education (AICTE) and other councils for clarification. The banks may request UGC/AICTE to create cells and identify nodal officers for receiving accurate information about educational institutions, their accreditation status, and more.

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Also Read : Buddy4Study Education Loan Programme

Central Sector Interest Subsidy (CSIS) Scheme – Interest Rate

The CSIS education loan interest rate charged on the educational loan is as per the Benchmark Prime Lending Rate (BPLR)/Base Rate of the individual banks and the Model Education Loan Scheme of the Indian Banks’ Association (IBA).

It is important to understand BPLR or prime rate of interest in the given context. BPLR  is an interest charged by commercial banks to their most creditworthy customers. Banks in all likelihood would charge the lowest interest rate to the customers with a good credit profile. Base rate on the other hand is defined as the minimum interest rate set by the RBI below which Indian banks are not permitted to lend to their customers. Unless there is a specific mandate of the government, the RBI rule specifies that no bank can offer loans at an interest rate lower than the base rate.

CSIS Interest Subsidy

  1. The interest subsidy offered under the CSIS education loan scheme can be availed only once. Students can use the availed subsidy either for undergraduate or postgraduate courses. 
  2. The interest subsidy also applies to integrated courses that include undergraduate and postgraduate programs.
  3. lnterest subsidy under CSIS scheme shall not be available for students who discontinue their course midstream or are expelled from the institution on disciplinary/academic grounds. 
  4. Furthermore, the interest subsidy would be available only if discontinuation in the course happens due to medical reasons. However, students need to submit the medical report or documentation to the satisfaction of the head of the educational institution.

Central Sector Interest Subsidy (CSIS) Scheme – Disbursement of Interest Subsidy Claims & Interest Concession

Disbursement of Interest Subsidy Claims

The nodal bank, i.e, Canara Bank, disburses the interest subsidy to the lending banks on a quarterly, half-yearly or yearly basis, as per the instructions of the Ministry of Education. Furthermore, lending banks are responsible for claiming the interest subsidy on behalf of the borrower (student) on a yearly basis. 

Once the interest subsidy is claimed by the lending bank, the nodal bank disburses the subsidy in the Education Loan account of the student in Direct Benefit Transfer (DBT) mode through Public Financial Management System (PFMS) Portal.

Important Note:- 

  • If lending banks do not claim interest subsidies for the current year, the backlog interest subsidy claim will not be provided.
  • In case of non-submission or delay in the submission of a claim by the lending bank to Canara Bank, the Department of Higher Education will not be responsible for issues related to interest subsidy.

Interest Concession 

According to the IBA Scheme, 2021, banks may offer borrowers a 1% interest concession if they pay the interest during the study and the moratorium period before the repayment begins. It’s important to note that the government’s subsidy should not be the sole reason for granting the 1% interest concession.

Central Sector Interest Subsidy Scheme (CSIS) – Approved Banks for Offering Loan

Under this scheme, students can apply to all the Scheduled Banks in India. The Canara Bank is the nodal bank appointed by the Ministry of Education, Government of India. It releases the subsidy amounts to the Scheduled Banks.

Interested applicants can click on the following link to familiarise themselves about the list of Scheduled Banks in India.

Central Sector Interest Subsidy Scheme (CSIS) – Documents Required

To apply under CSIS loan scheme, students need to submit the following documents along with the application form: 

  • PAN Card/Aadhaar Card
  • Mark sheet of the last qualifying examination
  • Proof of admission in the graduate/postgraduate course
  • Expenditures for the specific course approved by the institution
  • Two passport size photographs of the applicant/parent/co-obligant/guarantor
  • Income proof authorised by the public authority of the State Government 
  • Latest salary slip of parents
  • Form no.16 (if any)
  • Copy of Information Technology Application Owner (ITAO)/Income Tax Returns (ITR)
  • Copy of land records

Students must visit the following link of the documents required as income proof

Important Notes:- 

  • CSIS education loan scheme applies to education loans availed from April 1, 2009 onwards. However, for loans approved prior to April 1, 2009, only the amounts disbursed during that period are eligible.
  • The students must pursue undergraduate, postgraduate or integrated courses from National Assessment and Accreditation Council (NAAC) accredited institutions.
  • To be considered eligible under the Central Sector Interest Subsidy Scheme, students must be enrolled in professional or technical programs that are approved by the National Board of Accreditation (NBA), Institutions of National Importance (INI), or Central Funded Technical Institutions (CFTIs).
  • In addition to programs approved by the National Board of Accreditation (NBA), Institutions of National Importance (INI), or Central Funded Technical Institutions (CFTIs), specific professional institutions or programs may fall outside the purview of NAAC or NBA. 
  • In such cases, the approval of the respective regulatory body is required. For example, medical courses would require approval from the Medical Council of India, nursing courses from the Nursing Council of India, law courses from the Bar Council of India, and so on.

Central Sector Interest Subsidy (CSIS) Scheme – Awards/Certificates 

The students will have the tag/marker on their degree indicating the repayment obligations. Also, the electronic tags will enable employers to easily find the students who have availed the education loans. 

Central Sector Interest Subsidy (CSIS) Scheme – Contact Details 

For inquiries on details related to CSIS subsidies, applicants can use the following contact information.

1. Contact Details for Queries on CSIS Policy: 

Address: 

Section Officer (National Scholarships) National Scholarship Division, Ministry of Education, Department of Higher Education, West Block 1, 2nd Floor, Wing 6, Room No. 6, R. K. Puram, Sector 1, New Delhi- 110066.

Email ID: es3.edu@nic.in

Phone Number: 011-20862360

2. Contact Details for Queries on CSIS subsidy: 

Address:

Canara Bank, Government Portal Section, Government Service Wing, Head Office (Annex), Ground Floor, Scope Minar Building, Laxmi Nagar, New Delhi-110092

Email ID: hogsw@canarabank.com, hogps@canarabank.com

Phone number: 080-2223612

Important Links: 

  • Applicants can download the application form for the CSIS scheme from the hyperlink as highlighted.
  • Applicants can visit the official website of the CSIS on the following hyperlink official website.
  •  Applicants can refer to the official notification of the CSIS on the following hyperlink official notification

Central Sector Interest Subsidy (CSIS) Scheme – FAQs

What is CSIS?

The CSIS stands for Central Sector Interest Subsidy Scheme, which has been launched by the Ministry of Education (MoE), Government of India. 

Who can apply under the CSIS education loan scheme?

Students from the Economically Weaker Section (EWS) category in particular are eligible to apply under the CSIS loan scheme.

Will I get an interest subsidy for the entire duration of the period of education loan?

No, the interest subsidy benefits are only available up to the moratorium period. Under the Scheme, full interest subsidy is provided for the education loan taken from Scheduled Banks under the Model Education Loan Scheme of Indian Banks’ Association. Moratorium period covers the course duration + 1 year. 

Is it mandatory to apply for an education loan to get the interest subsidy?

Yes, a student needs to apply for an education loan from a Scheduled Bank to avail the benefits of interest subsidy. 

Who will claim the interest subsidy on behalf of the applicants?

A borrower or applicant is not eligible or qualified to place a claim on the interest subsidy. It is the lending bank who will claim a subsidy on their behalf. 

Which nodal bank is responsible for releasing the interest subsidy under the CSIS programme?

Canara Bank is a nodal bank appointed by the Ministry of Education (MoE), which releases subsidies to the other banks. However, a student can avail the interest subsidy for the CSIS loan by applying for the education loan in any of the Scheduled Banks in India.

Which banks are Scheduled Banks?

The Scheduled Banks are those banks that are listed under the Schedule II of the Reserve Bank of India Act, 1934. These banks are liable for low interest loans from the RBI. It includes private, public, small finance, payment, regional rural, and foreign banks in India that are liable for low-interest loans from the Reserve Bank of India (RBI) are Scheduled Banks. List of the Scheduled Banks can be referred to on the link provided in this article. 

What should be my family income to apply for CSIS?

Students from the Economically Weaker Sections (EWS) in India with an annual family income up to ₹4.5 lakh are eligible to apply under the CSIS education loan programme. Besides, the students who want to pursue undergraduate and postgraduate technical/professional courses in India can apply under the CSIS education loan scheme.

Whom should I contact for subsidy disbursement meant under the CSIS education loan programme?

Applicants must contact their concerned banks for information on subsidy disbursement. They can also connect on the following contact details 080-2223612 or 011-20862360 for scheme-related queries.

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