Cooperative Education Loan Facility For Children Of Poor Farmers, Dalits/ Bcs And Other Poor Sections

Cooperative Education Loan Facility For Children Of Poor Farmers, Dalits/ Bcs And Other Poor Sections

To provide financial assistance to deserving and meritorious students for pursuing higher studies in India or Abroad. Cooperative Banks in Punjab has started a unique Cooperative Education Loan Facility (CEL), policy for the children of poor farmers, dalits/BCs and other poor sections. An individual wishing to pursue studies in technical/professional courses such as Engineering, Medical Veternary, Dental Law, Agriculture, Computer, ICWA, CA, CFA, Management or any other course run by recognized university/institute/college of India or abroad can apply for financial assistance under this scheme.


Age of Student

An Indian National with minimum of 17 years and maximum 35 years of age can apply for this loan.

Age of Father/Guardian

The age of Father/Guardian should not be more than 65 years till full recovery of loan amount.

Education Qualifications

Minimum qualification for Cooperative Education Loan (CEL) is plus two and the applicant must have secured at least 50% marks in the last examination passed.

Admission to Course

The applicant must have secured admission or have got the consent of the institution to admit to any one of the above-mentioned courses.

Duration of Course

The duration of course should not be more than 5 years.


The loan shall be allowed for the following purposes.

  1. Admission Fee
  2. Purchase of books and stationery
  3. Purchase of instrument required for course undertaken by applicant.
  4. Laboratory charges, if any.
  5. Monthly/quarterly tuition fee.
  6. Examination fee.
  7. Library charges
  8. Caution deposits/Building Fund
  9. Refundable deposits, if any.
  10. Expenses on projects, if any
  11. Boarding and Lodging expenses
  12. Computer purchase, if required.
  13. Air fare for joining the course (for study abroad).
  14. Any other expenses to complete the study.

All the above expenses should be verified from college prospectus or letter from Head of the concerned institution and or other relevant sources.



The amount of loan will depend upon the expenses involved in completion of course, subject to the maximum of

For studies in India

Rs.5.00 lacs

For Studies Abroad

Rs.10.00 lacs


The rate of interest on Cooperative Education Loan Facility (CEL) shall be 7.25% per annum. This rate is however subject to change from time to time.


No processing charges shall be charged under CEL.


No penalty for early closure of CEL.


No collateral security is required upto a loan of Rs.25000/-. This loan shall be advanced against two good sureties. The loan above Rs.25000/- will be advanced against collateral security by the applicant/guardian. The collateral security can be in the form of land/building NSC/KVP/LIC Policy/Bank deposits in the name of student/parent/Guardian. The valuation of the collateral security shall be equivalent to the loan amount.


An insurance policy will be taken on the life of the student borrower for an amount equal to the loan amount and should be assigned in favour of the bank.


The loan amount shall be calculated by taking into account the total expenses of course as provided in prospectus of university/college/institute or letter signed by Head of Institution subject to maximum loan as provided in the loan scheme.


The branch will get sanction of whole loan amount from competent authority but will disburse the amount based on yearly expenses of course. In the first year, disbursement will be equivalent to the expenses of first year only. Subsequently, the loan amount for the next year will be disbursed after successful completion of previous year. The disbursement of loan should be by Demand Draft/Bank cheque in favour of concerned university/college. In case of purchase of equipment/books/computer the payment shall be made to the applicant.


The recovery of principal amount will start after one year of total duration of course or after 6 months of getting the job/employment by the applicant, which ever is earlier.


Joint Application

The application for loan should be signed jointly by student and father (mother, if father is not alive) or guardian.

Nominal Membership

Both applicants and sureties should become nominal members of Bank.


The loan amount shall also match with repaying capacity of borrower. For checking the repaying capacity of income proof of applicant (Father/Guardian) should be verified. The general guidelines are that monthly installment of loan amount should not exceed 35% of monthly income. For calculating the income future income of students should not be taken into consideration.


The following documents are required alongwith application.
i)    Income proof.
ii)   Proof of resident.

  1. 4 passport size photographs of all applicants.
  2. Proof of admission in course.
  3. Copy of Education Qualification of Student.
  4. Nominal Membership of applicants and sureties.
  5. Schedule of expenses of course.

For salaried persons (Additional Documents)

  1. Latest salary slip showing all deductions.
  2. Latest T.D.S. certificate.


After the sanction of CEL and before the disbursement of loan following documents should be executed.

  1. Loan Agreement.
  2.    Surety bond by two sureties
  3.   Letter of guarantee by father/guardian.
  4. Collateral Security, if applicable.
  5. Promissory Note.
  6. Letter of lien and set off.
  7. Affidavit from father/guardian of applicant stating that :-
  8. He will be liable to bank to repay the loan alongwith interest in case of default by applicant.
  9. He will not go abroad permanently without the prior approval of bank.
  10. He will intimate the bank in case of any change in status of studies of student.