Central Sector Interest Subsidy Scheme (CSIS)
CSIS stands out as a unique initiative, driven by the vision that every financially disadvantaged student with aspirations for higher education should have the opportunity. It is designed to support economically weaker students undertaking professional or technical courses in India, with the goal of enhancing the affordability of higher education.
The scheme is dedicated to uplifting students from the grassroots level, contributing to an increase in the number of qualified technicians and professionals nationwide. Additionally, CSIS seeks to rectify geographical imbalances in the Gross Enrolment Ratio (GER) within Higher Educational Institutions.
What is the Central Sector Interest Subsidy Scheme (CSIS)?
The Central Sector Interest Subsidy Scheme (CSIS) is a government initiative in India designed to provide financial support to students from economically weaker sections pursuing higher education. The primary objective of CSIS is to alleviate the financial burden on students by offering an interest subsidy on educational loans during the moratorium period.
Moratorium period :
This moratorium period typically includes the course duration and an additional period, either one year after completing the course or six months after securing employment, whichever occurs earlier.
The scheme is implemented through various financial institutions, including scheduled banks, public sector banks, and private sector banks, that are members of the Indian Banks' Association (IBA).
Interest subsidy :
To be eligible for the interest subsidy, students generally need to meet specified income criteria, with family income being a crucial determinant. The application process for the interest subsidy is usually conducted through the bank from which the student has taken the education loan, and the details may vary based on the guidelines provided by the lending institution.
It's essential for students to stay informed about the latest updates and specific requirements of the CSIS by consulting official government sources or the respective financial institutions involved in the implementation of the scheme.
Objectives of CSIS
- Ensure that no student is denied the opportunity for higher education due to financial constraints.
- Provide full interest subsidy during the moratorium period on education loans for technical/professional courses.
- Specifically targets students with an annual gross parental/family income up to Rs. 4.5 lakhs.
- Envisage uplifting students from economically weaker sections.
- Increase the number of qualified technicians/professionals in the nation.
- Address geographical imbalances in the Gross Enrolment Ratio (GER) in Higher Educational Institutions.
Features of CSIS
- Applicable to students pursuing technical/professional courses in India.
- Provides full interest subsidy without requiring collateral security or third-party guarantee.
- Linked with the existing Educational Loan scheme of the Indian Banks' Association.
- Adopted by all Scheduled Banks.
- Limited to students enrolled in NAAC-accredited institutions or those accredited by NBA, institutions of National Importance, or Central Funded Technical Institutions (CFTIs).
- Approval from the relevant regulatory body is required for institutions or programs not covered by NAAC or NBA.
- Eligibility is based on annual gross parental/family income (up to Rs.4.5 lakhs).
- Subsidy is granted only once, either for undergraduate, postgraduate, or integrated courses.
- Maximum loan amount capped at Rs.10 lakhs.
Eligibility Criteria for CSIS
- Qualification for Education Loans under the IBA Model Education Loan Scheme.
- Applicable to students with parental income up to Rs. 4.5 lakhs per annum.
- Eligibility for those enrolled in professional/technical courses at NAAC accredited institutions, or institutions accredited by NBA, Institutions of National Importance, or Central Funded Technical Institutions (CFTIs).
- Mandatory approval is needed for institutions/programs falling outside the NAAC or NBA ambit from respective regulatory bodies.
- Acceptance for undergraduate (UG), postgraduate (PG), and integrated courses (graduate + postgraduate).
- Exclusion from Interest Subsidy for students discontinuing or being expelled, unless due to medical reasons supported by proper documentation.
Disbursement Process of CSIS
Step 1: Disbursement Schedule Determination
The Ministry of Education, as part of the Government of India, takes the initiative to establish a schedule for the disbursement of interest subsidy claims. This schedule is crucial for ensuring a systematic and timely allocation of funds.
Step 2: Frequency of Disbursement
The frequency of disbursement, whether it occurs on a Quarterly, Half-yearly, or Yearly basis, is decided by the Ministry of Education. This decision is likely influenced by factors such as budgetary considerations and the financial needs of the beneficiaries.
Step 3: Mode of Disbursement
The Nodal Bank is assigned the responsibility of disbursing the subsidy to the Education Loan accounts of the beneficiaries. This is a critical step as it involves the actual transfer of funds to the intended recipients.
Step 4: Disbursement Method
The chosen method for subsidy disbursement involves utilizing the PFMS Portal and the Direct Benefit Transfer (DBT) mode. This signifies a modern and efficient approach to ensure that subsidies reach the beneficiaries directly.
Step 5: Lending Bank's Responsibility
The lending bank plays a pivotal role in this process by taking on the sole responsibility of claiming the interest subsidy on behalf of eligible beneficiaries. This involves a careful and accurate submission of relevant information.
Step 6: Annual Claim Submission
To ensure the regular flow of subsidies, the lending bank is required to submit the interest subsidy claim annually. This periodic submission is crucial for maintaining a consistent financial support system.
Step 7: Consequences of non-claim
Non-compliance with the annual claiming process has consequences. If any lending bank fails to claim the interest subsidy for the current year, the backlog claims for interest subsidy will not be entertained. This emphasizes the importance of timely and accurate submissions.
Step 8: Department of Higher Education Disclaimer
The Department of Higher Education explicitly states that any delay in the submission or non-submission of the claim by the lending bank to Canara Bank is not their responsibility. This disclaimer sets clear expectations regarding accountability in the claiming process.
Step 9: Risk of Non-Payment
The overall risk associated with non-compliance with the claiming process is the potential non-payment of the interest subsidy. This underscores the significance of adherence to the established procedures to ensure financial support reaches the intended beneficiaries without disruptions.
Contact Information
The contact details for inquiries related to the Central Sector Interest Subsidy Scheme (CSIS) are as follows:
Support for Subsidy Release or Settlement Failures
- Contact Point: Canara Bank Head Office, Priority Credit Section, Priority Wing
- Address: 112 Jayachanarajendra Road, Bengaluru-560002, Karnataka
- Telephone: 080-22128044
- Email: hogps@canarabank.com
For Policy Clarifications on CSIS
- Contact Point: Section Officer (National Scholarships)
- Address:
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. - Telephone: 011- 20862360
- Email: es3.edu@nic.in
FAQs on Central Sector Interest Subsidy Scheme (CSIS)
- How is the subsidy amount paid through CSIS?
The subsidy amount is directly credited through the PFMS system to the beneficiary's education loan accounts. It is the sole responsibility of the loaner bank to submit the correct account details of the beneficiaries for crediting the subsidy amount through the DBT mode. Students should contact the financing bank in case of any delay in receiving the subsidy amount.
- Who is responsible for applying for CSIS?
The disbursing bank for education loans should make the application on the CSIS portal maintained by Canara Bank. No additional application is required from the student. The bank branch, disbursing the loan, is responsible for verifying the student's eligibility and filing the subsidy claim through the portal, which remains open throughout the year.
- Is it mandatory to avail yourself of an education loan to benefit from the interest subsidy?
Yes, students who have taken education loans from scheduled commercial banks under the model education loan scheme of IBA are eligible for the interest subsidy.
- Is there an income criterion for claiming the subsidy?
Yes, the total family annual income from all sources should not exceed Rs. 4.5 lakhs.
- Where is the interest subsidy credited?
The interest subsidy is directly credited to the student's loan account. It is important to note that the Ministry of Education bears no responsibility for any back payments resulting from the bank's failure to claim the subsidy before the closure of the student's loan account.
- When can the bank file its interest subsidy claim?
The CSIS portal maintained by Canara Bank for subsidy claims is accessible throughout the year. The bank branch disbursing the loan should file the claim when the interest subsidy for a year is due, provided the student has proof of successfully completing that year of study.
- Is it necessary to submit the income certificate every financial year?
The income certificate, covering the annual income of the entire family, is to be submitted at the time of loan sanction/disbursement of the first installment, as decided by the loan disbursing bank. Borrowers are not required to submit an income certificate every year.
- How can the borrower claim the subsidy from the Government of India?
Borrowers cannot claim the subsidy directly from the Government. It is the prime responsibility of the financing bank/branch to claim the subsidy on behalf of the borrower. Any failure by a lending bank to claim the interest subsidy for the current year will result in non-entertainment of backlog/pending claims, and the Ministry of Education will not be liable for any back payments.
- What is the procedure to check the CSIS subsidy claimed amount of individual education loan accounts?
Canara Bank has established a dedicated web portal for this purpose.
- Whom should one contact for the subsidy amount disbursed by the government?
Details of the credited amount may be obtained from the financing bank concerned. If the branch's reply is not satisfactory, the head office of the bank concerned may be contacted.
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