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The Ministry of Human Resources Development (MHRD) has appointed Canara Bank for establishing the Higher Education Financing Agency (HEFA).
“Consequent upon completion of the process of inviting, examining and selection based on the notice of expression of interest for identifying a joint venture partner for establishment of HEFA, the Ministry has appointed Canara Bank for establishment of Higher Education Financing Agency (HEFA)”, the bank said in a stock exchange notice.
It is aimed at giving a major push for creation of high quality infrastructure in premier educational institutions, including IITs, IIITs, NITs, IISERs, and Central universities.
Subject to approvals The bank said it has initiated steps to operationalise the HEFA, subject to necessary approvals / permissions from the regulator/s and the Government of India.
Last month, the Ministry said the HEFA would be jointly promoted by the identified promoter and the MHRD with an authorised capital of ₹2,000 crore. The government equity would be ₹1,000 crore.
The HEFA would be a special purpose vehicle. It would leverage the equity to raise up to ₹20,000 crore for funding projects for infrastructure and development of world class Labs in IITs/IIMs/NITs and such other institutions.
It would also mobilise CSR funds from PSUs/corporates, which would in turn be released for promoting research and innovation in these institutions on grant basis.
The HEFA would finance the civil and lab infrastructure projects through a 10-year loan. The principal portion of the loan will be repaid through the ‘internal accruals’ (earned through the fee receipts, research earnings etc.,) of the institutions. The government would service the interest portion through the regular Plan assistance.
Interest subsidy Canara Bank is also the nodal bank for administering the Central scheme to provide interest subsidy during the period of moratorium on educational loans for students belonging to economically weaker sections (with parental income from all sources up to ₹4.5 lakh per annum).
The scheme is effective for all educational loans as per Indian Banks’ Association’s model education loan scheme, sanctioned to eligible students in respect of courses in technical and professional streams from recognised institutions in India, disbursed from the academic year 2009-10.
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