The eligibility of 52 Scheduled Urban Cooperative Banks (UCBs) to participate as Member Lending Institutions (MLIs) under the Credit Guarantee Fund Scheme for Education Loans (CGFSEL) will depend on their compliance with the prescribed conditions, including the monetary-penalty clause.
The Ministry of Education, in its latest notification, has included Scheduled State Cooperative Banks and Scheduled UCBs as MLIs under CGFSEL, provided they fulfil the specified eligibility criteria.
One such condition states that no monetary penalty should have been imposed on the bank during the preceding three years.
This means a Scheduled UCB that has a monetary penalty imposed on it could fail to meet this eligibility condition, potentially affecting its eligibility under the scheme. However, the notification does not specifically state that the imposition of a penalty would automatically terminate a bank’s participation; rather, it is part of the eligibility criteria.
The notification further provides that the National Credit Guarantee Trustee Company Ltd. (NCGTC) will conduct periodic or annual assessments of Scheduled State Cooperative Banks and UCBs to ensure continued compliance with the eligibility criteria.
