16 Feb CANARA Bank Signs MOU with HRD Ministry to Start HEFA
MUMBAI, FEB 16: Canara Bank on Thursday said it has signed a memorandum of understanding with the Ministry of Human Resource Development (MHRD) to operationalise the Higher Education Financing Agency (HEFA).
The Government, in a statement in September, had said HEFA would finance the civil and lab infrastructure projects through a 10-year loan. The principal portion of the loan will be repaid through ‘internal accruals’ (earned through fee receipts, research earnings etc.,) of the institutions. The Government would service the interest portion through regular Plan assistance.All the centrally funded higher educational institutions would be eligible for joining as members of HEFA.
For joining as members, the institution should agree to escrow a specific amount from their internal accruals to HEFA for a period of 10 years.This secured future flows would be securitized by HEFA for mobilizing the funds from the market. Each member institution would be eligible for a credit limit as decided by HEFA based on the amount agreed to be escrowed from the internal accruals.