Central Sector Interest Subsidy (CSIS) Scheme

The Central Sector Interest Subsidy (CSIS) Scheme, launched in 2009 by the Government of India, is designed to provide financial assistance to students from economically weaker sections to pursue higher education and professional courses in India. 

What is the Central Sector Interest Subsidy (CSIS) Scheme?

The CSIS subsidy scheme is an interest subsidy scheme on education loans available for students who secure admission to a recognized university in India. The subsidy on interest rate is applicable during the moratorium period that is course duration plus 12 months after getting the job or post completion of the course whichever is early. Once the moratorium period is over, the student has to start repaying the loan as per the conditions of the loan scheme.

The CSIS scheme is implemented through all the scheduled commercial banks. The scheme works with the Model Educational Loan Scheme of the Indian Banks' Association. The scheme will only focus on professional and technical courses accredited by the NBA or Institutions of National Importance or Central Funded Technical Institutions (CFTIs). Other professional courses that do not come under the ambit of technical courses will have to get approval from their respective regulatory bodies.

For instance, students pursuing law will have to get approval from the Bar Council of India, students in medical colleges will have to take permission from the Medical Council of India, and likewise for other professional courses.

Eligibility Criteria for CSIS Scheme

To avail full interest subsidy on education loans via CSIS schemes students have to fulfill the CSIS education loan eligibility criteria.

• Education loans taken under IBA Model Education Loan Scheme.
• Students having parental income up to INR 4.5 Lakh per annum.
• Students enrolled in professional/ technical courses only from NAAC accredited institutions or professional/technical programs accredited by NBA or Institutions of National Importance or Central Funded Technical Institutions (CFTIs). 
• Only UG, PG or integrated courses (graduate + post graduate) are eligible for CSIS scheme.
• The CSIS scheme is implemented strictly on the basis of income, and no other criteria like social background can come into the picture for the purpose of this scheme.

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Interest subsidy under CSIS shall not be available to those students who discontinue their course midstream, or who are expelled from the Institution on disciplinary or academic grounds. However, the interest subsidy would be available only if discontinuation is due to medical grounds for which necessary documentation to the satisfaction of the head of the educational institution needs to be provided.

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Interest Concession on CSIS Subsidy Scheme

The IBA scheme offers a concession of 1% on the CSIS education loan interest rate if it is paid regularly during the moratorium period or the repayment holiday. The 1% interest concession will be offered to the borrowers even in the CSIS scheme wherein the government of India takes care of the interest payment during the moratorium period. However, it is subject to the interest payment by the government on a half-yearly or annual basis. It helps students in getting a concession on the interest payment plus no payment of interest during the moratorium period. 

Moratorium Period of CSIS Scheme

The moratorium period for most education loans by Scheduled Commercial Banks is 12 months post-completion of the studies or 6 months after getting the job. The interest rate during the moratorium period will be paid by the Government of India under the CSIS wherein the loan applicants will be exempted from any interest payment during the moratorium period. Once the moratorium period is over the student has to pay the interest on the outstanding loan amount as per the terms and conditions of the loan.

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Nodal Bank for CSIS Scheme

The Government of India has decided to make Canara Bank the nodal agency for the CSIS scheme. It will be the nodal bank for MHRD through which the government will regulate the entire scheme. The implementation and other formalities with respect to loans will be regulated by the Government of India through Canara Bank. 

Income Limit and the Income Certificate

The income limit is very important as the guidelines of the education loan interest subsidy scheme clearly state that the gross family income of the loan applicants shouldn’t exceed INR 4.5 Lakh from all the sources. The income certificate will be issued by the competent authority designated by the respective state governments. The income certificate must be obtained on the ground of financial condition, and there is no role of social background or for that matter any other criteria to avail the scheme.

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List of Designated Officials for CSIS Scheme Income Certificate 

To apply for the CSIS subsidy scheme visit the JanSmart website and check your loan eligibility.

Please keep in mind that the CSIS subsidy scheme is exclusively intended for students who are studying in India. If you're planning to pursue education abroad, you won't qualify for the CSIS scheme. However, there are various alternatives such as education loans that you can explore. To help you select the most suitable loan from various lenders, GyanDhan is here to assist. GyanDhan is India’s first education financing marketplace. With partnerships with leading lenders such as State Bank of India, Bank of Baroda, ICICI Bank, Axis Bank, and HDFC-Credila we aim to provide the best loan option to aspiring students. To start your abroad education loan journey check education loan eligibility.

Read more about: A Complete Guide on JanSamarth Portal Education Loan

Frequently Asked Questions