RBI Clarifies Education Loan Eligibility for OCI Cardholders
The Reserve Bank of India (RBI) has issued a significant clarification regarding Overseas Citizens of India (OCI) cardholders. According to the latest update, OCI cardholders living in India are now permitted to seek education loans from Indian banks for pursuing studies overseas. This announcement has effectively addressed the concerns and uncertainty among lenders, who had previously requested guidance from the RBI on the Model Education Loan Scheme.
Here’s a breakdown of the key points:
- OCIs Residing in India: Eligible to apply for education loans for overseas studies, which is great news for those looking to pursue international education.
- OCIs Residing Outside India: These individuals can only apply for loans from Indian banks for educational purposes within India. This distinction is crucial for those living abroad but hoping to borrow from Indian banks.
- No Upper Limit for Education Remittances: Under the Liberalised Remittance Scheme (LRS), the RBI has confirmed that there are no restrictions on remitting funds borrowed for education purposes, making it easier for students to finance their education without worrying about caps.
The RBI’s clarification came after banks raised concerns regarding whether education loans for OCIs residing in India should fall under the LRS. The answer is clear: there are no restrictions on remitting domestically borrowed funds for education-related current account transactions under LRS.
During the fiscal year 2024, there was a noteworthy surge in the number of education loan accounts in public sector banks, marking a substantial 17% increase. This surge was paralleled by a 14.8% rise in the amount of loans disbursed, reaching a staggering ₹28,699 crore. While specific data regarding loans issued to Overseas Citizens of India (OCIs) remains unavailable, the RBI’s clarification is anticipated to bring about a more efficient and streamlined process for this demographic.
This move by the RBI is a step forward for OCIs looking to secure education funding, helping to ease the path to academic dreams!
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