Bank Guarantee for Financing Medical Admissions - Kerala Govt Initiative
2017-09-05To help students in mobilizing short term funds for admission in designated self financing Medical colleges in the state, the Kerala State Govt has launched a Bank Guarantee Scheme. The scheme is intended to extend bank guarantee for an additional amount of Rs. 6 lakh for any needy student having short term difficulty in mobilizing the additional amount in compliance of the verdict of Hon'ble Supreme Court dated 28.08.2017 that students seeking admission in Private Medical Colleges in Kerala have to submit bank guarantees for an additional amount of Rs.6 lakh, within 15 days.
Guidelines on Bank Guarantee scheme for students who secure admission in the designated self financing Medical Colleges in Kerala
1. Short title and commencement : This scheme may be called 'Bank Guarantee scheme for students who secure admission in the designated self financing Medical colleges in Kerala".
2. Date of effect : The scheme shall come into force with effect from 05.Og.2Ol7.
3. Scope of scheme : The scheme is intended to extend bank guarantee for an additional amount of Rs. 6 lakh for any needy student having short term difficulty in mobilizing the additional amount in compliance of the verdict of Hon'ble Supreme Court dated 28.08.2017 that students seeking admission in Private Medical Colleges in Kerala have to submit bank guarantees for an additional amount of Rs.6 lakh, within 15 days.
4. General conditions
(a) Type : Financial guarantee
(b) Amount : Rs. 6 Lakh
(c) Term : 6 months
(d) Beneficiary : The Principal of the Self Financing Medical College
(e) Principal debtors : The student & parent (spouse if student is married)
(f) Collateral security
i) Personal Guarantee of a third person with sufficient net worth
ii) Kerala Government Guarantee for the full amount.
(g) Margin : Nil
(h) Charges
i) At normal applicable rates.
ii) Waived for students belonging to SC/ST , BPL and dependents of cashew workers, coir workers, handloom workers and fishermen.
iii) Entry in the 1Oth pass certificate shall be taken as proof for SC/ST category. If the 10ft pass certificate does not contain the information, the student may
bring a certifrcate from appropriate authority.
iv) BPL ration card shall be taken as proof for BPL category.
v) Membership of the parent/spouse in the respective welfare fund shall be taken as proof for families of cashew, coir, handloom workers and fishermen.
vi) GST @ 18 Yo on the applicable bank charges is to be borne by the applicant.
(i) Accounting and recovery of devolved liability
i) The Principal of the College shall provide reasonabie time for the student to pay the fees after the Fee Regulatory Commission fixes the fees and the fees
becomes due. The Principal shall serve at least two notices to the student in case he fails to make the payment on the due date. If the student fails to pay
the fees even after that, then the Principal can invoke the Bank Guarantee.
ii) In the event of the Guarantee getting devolved, the bank shall pay the invoked amount and recover it from the Principal debtor(s) and the Third-Party
Guarantor as per the normal procedure in vogue.
iii) The Bank will simultaneously initiate legal processes to recover the amount from the Principal Debtor/Third Party Guarantor.
iv) In case the Bank is unable to recover the amount within a period of six months from the date of default, then the Bank will invoke the Government
Guarantee, whereupon Government shall pay the amount defaulted to the Bank within a period of one month of invoking such guarantee.
v) The bank may at its discretion, sanction a bridge loan to the principal debtors, with tenure of 6 months for any needy student having short term difficulty in
mobilizing the devolved amount. The devolved liability shall be debited to such bridge loan and recovered in 6 monthly installments. In such cases, the bank
shall obtain necessary documents as applicable to the above facility, along with Guarantee documents
vi) If such a bridge loan is sanctioned to the student, the Government guarantee shall cover the bridge loan also and the recovery procedure detailed above in
the guarantee condition shall apply mutatis mutandis in this case also.
(j) Documentation : In addition to the normal papers and documents as applicable to the facility, the bank shall also obtain the following
i) Declaration in the format given in Appendix I (countersigned by the college Principal or commissioner of Entrance Examinations)
ii) Copy of the NEET seat allotment
iii) Receipt for having remitted the cash portion of Rs. 5 lakh in the College.
(k) Guarantee format : Guarantee shall be issued in the standard format of the bank for financial guarantees
5. Other conditions
(a) This facility is extended for the sole purpose of facilitating a student to submit the necessary bank guarantee as directed by the Hon'ble Supreme Court in order to secure admission to the MBBS course in any approved self financing medical college in Kerala, and is not intended for meeting the educational expenses that will be incurred for studying the course.
(b) Sanctioning of this bank guarantee does not imply any commitment from the bank to sanction education loan or any other type of loan to meet the cost of education of the student
(c) After the fees for MBBS Course is fixed by the Fee Regulatory Commission, the Student is required to remit the applicable fees for the l't year to the college
(d) If the student desires to avail Education loan or any other credit facility to meet the cost of the course, he/she must apply separately to this bank or any other bank. Such facility shall be considered by that bank strictly on its merits and conditions applicable to such loans.
(e) In the case where the student is sanctioned an educational loan subsequently from the same bank, the initial disbursement from the loan shall be made towards the liquidation of the contingent /invoked liability arising out of this Guarantee.
(f) In the case, where the educational loan is availed from another bank, that bank shall counter guarantee the bank which issued the original standalone guarantee where the guarantee has not expired. In the cases where the guarantee has been devolved, the first disbursement in the loan shall be towards the liquidation of the devolved liability.
(g) In the case where the student subsequently gains admission to a college at Government fees, this guarantee shall be returned to the issuing bank.
(h) In the case where the student secures admission in another self financing medical college with the same guarantee requirements, he/she shall apply afresh for a new guarantee after surrendering the present one.
(i) In case the student does not apply for an educational loan but is able to raise the additional fee on his/her own, the guarantee will cease to be in force at the end of six months or when the original guarantee letter is surrendered to the Bank whichever is earlier.
(j) In cases, where the student has already applied and been sanctioned an educational loan for the entire course, the guarantee amount of Rs.6 lakh will be issued from the limit sanctioned.
Details and annexures available at finance.kerala.gov.in