PSB Central Sector Interest Subsidy Scheme (CSIS)

About PSB Central Sector Interest Subsidy Scheme

The PSB Central Sector Interest Subsidy Scheme (CSIS), launched by the Central Government, offers a 100% subsidy during the moratorium period (course duration plus one year) on education loan as per the IBA Model Loan Scheme. The scheme is available only once per student for undergraduate, postgraduate, or integrated professional and technical programs in India. It is implemented by all Scheduled Commercial Banks, including Punjab & Sind Bank (PSB).

PSB Central Sector Interest Subsidy Scheme - Rate of Interest

Under the CSIS scheme, the applicable interest rate is governed by the External Benchmark Lending Rate (EBLR) followed by individual banks. These rates align with the structure laid out under the IBA Model Education Loan Scheme. 

For example, under the current structure:

• For loans up to ₹4 lakh: EBLR (7.55%) + 2.80% spread = 10.35%

• For loans above ₹4 lakh and up to ₹7.5 lakh: EBLR + 2.10% = 9.65%

• For loans above ₹7.5 lakh: EBLR + 1.85% = 9.40%

Note: The rates are updated per Punjab & Sindh Bank's latest terms as of 20 June 2025. These may change based on RBI Repo Rate movements or bank lending policy updates.

Features of the PSB Central Sector Interest Subsidy Scheme

Here are the features of the PSB Central Sector Interest Subsidy Scheme:

• Full Moratorium Interest Subsidy: The government pays interest for the course period and one additional year after completion.

• One-Time Usage: Students can use this scheme only once for any undergraduate or postgraduate course.

• Collateral-Free Loans: No third-party guarantee or collateral is required for loans up to ₹7.5 lakh.

• Valid Only for Approved Courses: The scheme covers only NBA/NAAC-accredited or recognised technical/professional courses in India.

If you’re looking to plan your child’s education ahead of time financially, a child education plan may complement the CSIS in long-term goal setting.

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Eligibility of the PSB Central Sector Interest Subsidy Scheme

The eligibility criteria of the PSB Central Sector Interest Subsidy Scheme are as follows:

• The family’s gross annual income must not exceed ₹4.5 lakh from all sources.

• Only professional and technical courses recognised by NAAC, NBA, or relevant bodies are eligible.

• Students receiving any other fee reimbursement or scholarship from the state or central governments are not eligible.

• Benefits are not available to students who drop out or are expelled unless due to documented medical reasons.

Document Required for PSB Central Sector Interest Subsidy Scheme

The documents required to apply for the PSB Central Sector Interest Subsidy Scheme are given below:

• Income certificate from a government-designated authority

• Proof of admission into an eligible course and institution

• Copy of the Punjab & Sind Bank education loan sanction letter under IBA guidelines

• Declaration confirming non-availability of other government aid

• Valid photo ID and address proof

Most Important Terms and Conditions

Here are some of the most important terms and conditions for the PSB Central Sector Interest Subsidy Scheme:

• Moratorium-Based Subsidy: Interest subsidy is extended during the period of the course and a one-year moratorium period after studying.

• Once Per Student Rule: The scheme may only be applied in one course, whether undergraduate, postgraduate, or integrated.

• Bank’s Role in Timely Claims: PSB has to file claims for subsidy to interest yearly, and omitted claims are not entertained as backdated.

To discover how much you can save when interest payments finally start after the moratorium, it is important to use an income tax calculator.