What is the Academic Bank of Credit scheme?

Policy Making Sep 16, 2021

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The National Education Policy (NEP) was approved by the Union Cabinet in July 2020. On its first anniversary in 2021, various initiatives were announced by the Prime Minister to guide the development of education. One such initiative is the Academic Bank of Credit. It is expected to work as a digital bank for the students pursuing higher education.

What is the Academic Bank of Credit

The Academic Bank of Credit will be a National level facility set up by the University Grants Commission (UGC). It is a virtual database that will keep records of academic credits secured by a student. ABC will function as a commercial bank where students will be customers and the bank will offer services to these students. Students will have to open an Academic Bank Account and a unique ID will be provided to every account holder.

Under ABC, students will have an option for multiple entry and exit. They can leave a degree or course and get a corresponding certification and later they can rejoin studies by starting from where they had left.

Objectives of ABC

One of the main objectives of this scheme is to promote a learner-friendly approach in higher education across the country. It aims to enable students to select the best combination of courses that suits their aptitude. Students can choose a pace for their studies and tailor their degrees rather than undergoing the rigid course of a single university. The scheme grants them the freedom to choose and change their academic directions to satisfy their quest for knowledge.

What will be the functions of ABC?

The students will receive credits for pursuing courses by the Higher Education Institutes (HEIs).The higher education institutes will have to make deposits in students’ accounts. No credit course document will be accepted by them directly from the students.

Academic Bank will be responsible for opening, closing and validating the accounts of students with credit information. Apart from offline credits, the courses will include credits for online and distance mode courses such as SWAYAM- Study Webs of Active Learning for Young Aspiring Minds, NPTEL- National Program on Technology Enhanced Learning, V-LAb- Virtual Labs.

The academic credits earned by students will be valid for up to seven years. It can also vary based on the subject or discipline. The students will also be able to redeem these credits.

Let's take an example for better clarity. Suppose a student has earned 100 credits which is equivalent to one year and she decides to drop out. Later, when she decides to rejoin, she can redeem this credit and take admission directly in her second year at any university. Since the validity of the credit will be up to 7 years, the student will have to rejoin within seven years.

What are the benefits of ABC?

The higher education institutes participating in the ABC scheme will enable the students to build their degrees as per their own choice. Also, the UGC will ensure that the students secure the minimum credits required in the core subject area to avail the benefit of transfer from one institution to another after a gap. All this will ensure the students finish their degree or courses depending on their needs.


The NEP is a step in the right direction towards reforming the education sector in India. Initiatives such as the Academic Bank of Credit can help transform education in the higher institutes by providing flexibility to the students to pursue their degrees and certifications. However, the initiatives are currently in their nascent stage. Hence the implementation of the schemes and programmes will be a better judge regarding their efficacy in reforming the education pattern in India.

This article has been written by Khanak Sharma for the Paradigm.

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