Baroda Vidyasthali Loan

Education infrastructure is a vital part for delivering quality education. Bank of Baroda (BOB) to facilitate educational institutions and centres for higher learning has created the Baroda Vidyasthali Loan scheme. Under the scheme, BOB provides loan for construction, renovation, creation of infrastructure facilities and/or land, purchase of hardware, software, finance of working capital gap, consolidation of current liabilities to any other infrastructural enhancements. In this article, we look at the Baroda Vidyasthali Loan scheme in detail.

Bank of Baroda Overview

Bank of Baroda is a state-owned global banking and financial services company headquartered located in Vadodara, Gujarat, India. It is a major bank in India with total assets in excess of Rs.3.58 trillion and a network of 5493 branches in India and overseas and 10441 ATMs as on September, 2016. The bank was created by the Maharaja of Baroda, Maharaja Sayajirao Gaekwad III on 20th July 1908 in the Princely State of Baroda, in Gujarat. The bank, together with 13 other major commercial banks of India, was nationalized on 19 July 1969, by the Government of India and has been termed as a profit-making public sector undertaking (PSU).

Baroda Vidyasthali Loan Scheme

Baroda Vidyasthali Loan caters to complete education segment; more predominantly the bank’s areas include the following:

• Affordable Private Schools
• Private Schools
• Play Schools
• Private Degree
• Vocational Colleges, Coaching Centers
• Teachers
• SME catering goods and services to the Education segment.

Loan under the scheme can be used for meeting the monetary requirements for setting up the institutions which is inclusive of construction of building, purchase of equipment and so on. 

Eligibility Criteria

Educational Institutions, schools, colleges as well as other education bodies handling education activities are eligible for availing loan under the scheme. However,

HUF is not considered eligible.

Amount of Loan

Under the scheme, a minimum loan amount of Rs.25 lakhs to a maximum loan amount of Rs.15 crores can be availed. Equitable mortgage of land and building (agricultural land would not be accepted) would be required. Further, hypothecation of instruments and equipment obtained out of the loan and other assets of the Educational Institution is required. Finally, the personal guarantees of the promoters of the Institution would be required.

Interest Rate & Margin

For loan of upto Rs.5 crores, base rate + 1% is charged. For loans between Rs.5 crores to Rs.10 crores, base rate + 1.5% is charged. For loans between Rs.10 crores to Rs.15 crores, base rate + 2.25% is charged. The repayment period would be setup based on the cash flow of the project with a maximum tenure of 84 months, inclusive of a moratorium period of 2 years. The promoters are required to infuse 25% of the project cost as promoters margin.