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.
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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.
The objective of the scheme, which was part of the then Prime Minister’s June 2006 fifteen-point programme 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 better opportunities for higher education at Masters, M.Phil and Ph.D levels abroad and enhance their employability.
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 instalments and interest beyond moratorium period.
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