Post on 05-Feb-2020
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ROLE OF BANKS IN EMPLOYMENT GENERATION
BANK
Ajay Vyas, Field General Manager
Central Bank of India
• Monitory Policy of RBI has channelized the flow of credit.
Accordingly, all banks operating in India have to necessarily lend 40%
of their total loans to priority sectors.
• Priority Sector Lending is an important role given by the Reserve Bank
of India to the banks for providing a specified portion of the bank
lending to few specific sectors like
Priority Sector
Agriculture MSMEs Education Housing Export Credit
Social Infra Renewable
Energy Others
• RBI norm stipulates following sector wise targets under Priority Sector.
a) Agriculture : 18% of ANBC
b) MSE : 7.5%
c) Weaker Sections : 10%
• Shortfalls of above have to be deposited by Banks to NABARD's Rural
Infrastructure Development Fund (RIDF).
• Banks get low interest from RIDF deposits & NABARD lends this
amount to state governments for rural development activities.
• PSL (Priority Sector Lending) boosts inclusive growth, reducing inequality
and helps in capacity building of masses.
18%
7.50%
40%
10%
38.47%
14.61%
65.99%
23.29%
0%
10%
20%
30%
40%
50%
60%
70%
Agriculture MSE Priority Sector Weaker Section
RBI Norm Performance of Madhya Pradesh
Benchmarking in the context of M.P. as on 31.03.2017
MSMEs a nursery of entrepreneurship
• The MSMEs sector has been playing an important role in generation of
employment and often acting as a nursery of entrepreneurship.
• Bank’s loans upto Rs. 10 crores for manufacturing or service enterprises
are classified under MSMEs.
17227 22349
26509 30082
40887
2012-13 2013-14 2014-15 2015-16 2016-17
Chart showing MSME growth in M.P. of last 5 years (Amt. in Cr.)
FLAGSHIP SCHEMES FOR SELF-EMPLOYMENT
Mukhya Mantri Yuva Udyami Yojana
Mukhya Mantri Swarojgar Yojana
Mukhya Mantri Arthik Kalyan Yojana
PMEGP
Pradhan Mantri MUDRA Yojana
Stand-up India Scheme
NRLM
995 1522 2030
32290
54245
68386
20069 17848
31079
53354
73615
101495
0
20000
40000
60000
80000
100000
120000
2014-15 2015-16 2016-17
MMYUY
MMSY
MMAKY
Total
MMYUY : Mukhya Mantri Yuva Udyami Yojana, MMSY: Mukhya Mantri Swarojgar Yojana
MMAKY: Mukhya Mantri Arthik Kalyan Yojana
Chart shows number of employment through flagship schemes of Govt. of M.P.
2952 3005 4459
1941
15117
43948
27463
34602
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
2013-14 2014-15 2015-16 2016-17
NRLM
PMEGP
PMEGP: Prime Minister Employment Generation Programme
NRLM : National Rural Livelihood Mission
Chart shows number of employment through flagship schemes of Govt. of India
• 8.79 lac (No.)
• 5907 (Amt. in cr.)
Pradhan Mantri
MUDRA Yojana
• 1715 (No.)
• 371 (Amt. in cr.) Stand-up
India Scheme
Employment through PMAY & Stand-up India Scheme during FY 2016-17
GENERATING EMPLOYMENT THROUGH EDUCATION LOANS
• Education is the most crucial input for empowering people especially
youth with skills and knowledge and giving them access to productive
employment in future.
• Banks provide collateral free education loans for amount up to Rs. 4
lac
• For loans between Rs. 4 to 7.5 lac, only third party guarantee is
required.
• As of 31st March 2017, education loans outstanding of banks in M.P.
was Rs.2239 crores to 85059 students.
SELF EMPLOYMENT THROUGH SELF HELP GROUPS
• Banks help the poor households to battle poverty by providing access
to self-employment opportunities through self help groups under
National Rural Livelihood Mission (NRLM) & National Urban
Livelihood Mission (NULM).
• There are around 2.28 lac SHGs in Madhya Pradesh. Out of which,
1.20 lac SHGs are credit linked.
• The Government provides revolving fund, interest subsidy etc. to
SHGs.
CREATING INDIRECT JOB OPPORTUNITIES
• Make in India is an initiative launched by the Government of India to
encourage multi-national, as well as national companies to
manufacture their products in India.
• It is expected to create a 100 million new jobs by 2022.
• These companies are funded by banks.
• Skill development is also a part of Make in India programme. The
Banks provides loans for skill development and contribute towards job
opportunities.
RURAL SELF EMPLOYMENT TRAINING INSTITUTES
• Banks run RSETIs with co-operation from the Government of India
and State Government in each district to impart training and skill
upgradation of rural youth towards entrepreneurship development.
• There are 51 RSETIs in M.P.
• 1.54 lac candidates were trained by RSETIs since its inception. Out of
which 1.03 lac candidates are settled.
• During FY 2016-17, 0.35 lac candidates were trained at RSETIs.
ROAD AHEAD FOR PROMOTING SELF EMPLOYMENT
• About 50% of the population of Madhya Pradesh is in the age group
15-45.
• On the basis of the projected population of M.P. in 2017, this group
constitutes about 4 crore people.
• The economic empowerment of youth will centre on providing
employment as well as self-employment.
• It is targeted by State Govt. that, in the year 2017-18, 15 lakh youth
will be provided employment and self-employment through central
and state Government schemes. 7.50 lakh youth would be provided
employment through skill development and 7.50 lakh would be self-
employed by availing loans for entrepreneurship though the banking
system.
EXPECTATIONS FROM THE GOVERNMENT
• Handholding support to facilitate the borrowers. An agency need to
be appointed in each district for this purpose.
• Arranging workshops & literacy programme in each district.
• Sponsoring quality cases by the concerned department/agency of the
State Government.
• Timely submission of the cases in bank branches in proportion to
their target.
• Help in recovery of bad loans under Government Sponsored
Schemes.