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.