Banks Seek Clarity on Education Loans for Foreign Institutions in GIFT City

Banks have approached the government seeking clarity on the treatment of education loans for students enrolling in foreign universities that operate campuses within Gujarat’s GIFT City, as per The Economic Times report. 

Although the courses are conducted in India, the degrees are awarded by overseas universities, creating ambiguity in how lenders should classify such loans. 

Currently, these loans are being treated as “studies abroad”, prompting banks to seek changes to the model education loan scheme (MELS) to ensure a more consistent policy framework. 

Banks push for policy clarity 

Lenders have raised the issue with the government through the Indian Banks’ Association (IBA), highlighting operational challenges in the existing framework. 

The proposed changes include easing certain requirements, such as the need for a visa during loan approval or disbursal, which is typically mandatory for students pursuing education abroad. 

Regulatory framework and GIFT City campuses 

Under the current structure, if a foreign university awards the degree and the tuition fees are paid in foreign currency, the loan continues to be classified under overseas education. 

Regulations issued by the International Financial Services Centres Authority allow foreign universities to establish international branch campuses and offshore education centres within the GIFT International Financial Services Centre. 

Read More: GIFT Nifty Today: Sensex and Nifty Set for Massive Gap-Down Amid Iran Tensions! 

Conclusion 

So far, 5 universities from the UK, Australia and Northern Ireland have received approvals to operate in GIFT City. However, only institutions ranked within the top 500 of the QS World University Rankings are eligible to establish campuses in the financial hub. 

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