KEAM: Govt issues guidelines for bank guarantee for medical admissions
Thiruvananthapuram: The State Government has issued detailed guidelines for the implementation of Bank Guarantee scheme for students, who secured admission in the designated self-financing Medical Colleges in Kerala during 2017-18.
The scheme, called 'Bank Guarantee scheme for students who secure admission in the designated self-financing Medical colleges in Kerala’, intended to extend bank guarantee for an additional amount of Rs. 6 lakh for any needy student having short term difficulty in mobilising the additional amount in compliance with the verdict dated 28.08.2017, of Supreme Court 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, will come into force on 5.9.2017.
The Financial guarantee will be for Rs.6 lakh for a period of 6 months, the beneficiary being The Principal of the Self Financing Medical College and the Principal debtors being the student and parent (spouse if student is married).
Collateral security will be the Personal Guarantee of a third person with sufficient net worth and Kerala Government Guarantee for the full amount. There will be no margin amount. Charges will be at normal applicable rates. It is waived for students belonging to SC/ST, BPL and dependents of cashew workers, coir workers, handloom workers and fishermen. GST @ 18% on the applicable bank charges is to be borne by the applicant.
Entry in the 10th Pass certificate shall be taken as proof for SC/ST category. If the 10th Pass certificate does not contain the information, the student may bring a certificate from appropriate authority. BPL ration card shall be taken as proof for BPL category. Membership of the parent/spouse in the respective welfare fund shall be taken as proof for families of cashew, coir, handloom workers and fishermen.
The Principal of the College shall provide reasonable 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 of failure to make payment on the due date. If the student fails to pay the fees even after that, then the Principal can invoke the Bank Guarantee.
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. The Bank will simultaneously initiate legal processes to recover the amount from the Principal Debtor/Third Party Guarantor. 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.
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. 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.
In addition to the normal papers and documents as applicable to the facility, the bank shall also obtain (i) Declaration in the format given in Appendix I of G.O(P) No.118/2017/H.Edn dated 30/8/2017, 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. Guarantee shall be issued in the standard format of the bank for financial guarantees.
This facility is extended for the sole purpose of facilitating a student to submit the necessary bank guarantee as directed by the 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. 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.
After the fees for MBBS Course is fixed by the Fee Regulatory Commission, the student is required to remit the applicable fees for the 1st year to the college. 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.
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. 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 cases where the guarantee has been devolved, the first disbursement in the loan shall be towards the liquidation of the devolved liability. In cases where the student subsequently gains admission to a college at Government fees, this guarantee shall be returned to the issuing bank. In cases 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.
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. 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.
The relevant Government order is available at the ‘Government Orders’ link at http://finance.kerala.gov.in/