The skill loan scheme has been envisaged to provide institutional credit to individuals to take up skill development courses aligned to the national occupations standards and qualification packs, leading to a certificate / diploma / degree by training institutes as per the national skill qualification framework (NSQF).
Which banks can provide loans under the scheme?
This scheme is applicable to all member banks of the Indian Banks' Association (IBA) and any other banks and financial institutions as may be advised by the RBI.
Eligibility for the scheme
The applicant should be an Indian national and should have secured admission in a course run by industrial training institutes (ITIs), polytechnics or in a school recognised by central or state education boards, or in a college affiliated to a recognised university, training partners affiliated to National Skill Development Corporation (NSDC) / sector skill councils, state skill missions for courses aligned to the NSQF.
Minimum age
There is no specific restriction with regard to the age of the student to be eligible for a skill loan. However, if the student is a minor then the parent has to execute documents for the loan. The bank will obtain a letter of acceptance / ratification from him / her upon attaining majority.
Quantum of finance
A loan of Rs 5,000 to Rs 1.5 lakh can be availed. The rate of interest charged will be the base rate (Marginal Cost of Funds BasedLanding Rate {MCLR}) + an add-on, typically up to 1.5% MCLR. The moratorium period will be for the duration of the course.
Repayment
Loans Period
₹50,000 Up to 3 yrs
₹50,000-₹1 lakh Up to 5 yrs
Above ₹1 lakh Up to 7 yrs
Coverage
Course fees (directly to the training institute) and expenses towards completionof the course (assessment, examination, study material etc.) The scheme does not allow for collateral to be charged from the beneficiary.
Documents needed
KYC of applicant and co-applicants
Academic records
Proof of admission Entrance exam result (if applicable)
Statement of cost of study/schedule of expenses
Income proof for salaried co-applicant / guarantor (if applicable)
Bank account statement for last 6 months etc
National Skill Qualifications Framework (NSQF)
The NSQF is a nationally integrated education and competency-based framework that enables persons to acquire desired competency levels. It organises qualifications according to a series of levels of knowledge, skills and aptitude.
These levels – graded from one to ten – are defined in terms of learning outcomes which the learner must possess regardless of whether they were acquired through formal, non-formal or informal learning. It is, therefore, a nationally integrated education and competencybased skill and quality assurance framework that will provide for multiple pathways, horizontal as well as vertical, including vocational education, vocational training, general education and technical education, thus linking one level of learning to another higher level. This will enable a person to acquire the desired competency levels, transit to the job market and at an opportune time, return for acquiring additional skills to upgrade their competencies further.
Online portal: https:// nielit.gov.in/content/nsqf
(The writer is a Vile Parle-based social activist)
