This article throws light upon the top six government sponsored schemes under which banks are required to finance as per the respective scheme norms prescribed by the RBI. The schemes are: 1. DRI Scheme 2. SLRS 3. PMRY Scheme 4. SJSRY 5. SGSY 6. SELF HELP GROUP.
Government Sponsored Scheme # 1. DRI (Differential Rate of Interest Scheme):
Differential rate of interest means lower rate (4%) of interest. The scheme has been initiated to provide financial help to lower strata of population through the help of Banks. Banks are required to contribute to the national goals. Advances under this scheme should be at least 1% of total advances as at the end of previous year on an ongoing basis. SC/ST to get 40% of DRI advances, 2/3rd of DRI are to be routed through rural/semi urban branches of the banks.
For advances under this scheme the borrowers should be eligible:
1. Borrowers having family income from all sources not exceeding Rs. 7200 p.a in urban/semi urban areas and Rs 6400 p.a in Rural areas.
2. Borrowers should not own any land or the size of land holding should not exceed 1 acre in case of irrigated and 2.5 acres in case of un irrigated.
3. Indigent students of merit going in for higher studies who do not get scholarships or grant from Govt.
4. Physically handicapped persons.
5. The maximum amount of borrowing will be the assistance per beneficiary as per the ceiling of the scheme.
6. Maximum loan amount is Rs. 15000/- per beneficiary at 4% rate of interest.
7. Banks are compensated by the government with regard to rate of interest.
Government Sponsored Scheme # 2. SLRS (Scheme of Liberation and Rehabilitation of Scavengers):
The purpose of the scheme is to liberate the Scavengers and their dependents from existing hereditary and obnoxious occupation of manually removing shit, night soil and filth and to provide for and engage them in alternative and dignified occupations.
Scavenger is one practically or wholly engaged in the obnoxious occupation of manually removing night soil and filth. The dependent is one who is member of his family or is dependent upon him irrespective of the fact whether he is also engaged in this field or not.
Maximum Financial limit under the scheme is Rs. 50000/- out of which bank loan shall be Rs. 32500/-. State Scheduled Caste Development Corporation will contribute Rs. 7500/- as margin and Government subsidy shall be Rs. 10000/-.
Government Sponsored Scheme # 3. PMRY (Prime Minister Rozgar Yojna):
The PMRY has been designed to provide employment to educated unemployed youth of economically weaker sectors. The scheme aims at assisting the eligible youths in setting up self-employment ventures in industry, service and business sectors.
1) Family would mean applicant and the spouse, if two or more brothers live together, they will constitute different families,
2) For married women the income of parents in laws shall be considered,
3) One than more member of the family will not be assisted,
4) The scheme covers urban and rural areas in whole of the country,
5) Income of the entire family through all sources should not exceed Rs. 1 lac p.a.,
6) Subsidy provided by the government will be limited to 15 % of the project cost subject to maximum of RS. 12500/- per entrepreneur, and
7) Project cost will be Rs. 2 lacs for business/service sector and Rs. 5 lacs for industry sector.
Government Sponsored Scheme # 4. Swarna Jayanti Shahri Rozgar Yozna (SJSRV):
The scheme was launched in 1997 in all urban towns in India replacing 3 existing schemes:
i) Nehru Rozgar Yojna,
ii) Urban Basic Services for the poor, and
iii) Prime Minister Integrated Urban Poverty Eradication Programme.
The SJSRY seeks to provide gainful employment to the urban poor living below the urban poverty line, unemployed or underemployed through setting up of self-employment ventures. The scheme is to be funded by central government and state governments in the ratio of 75: 25 basis.
The scheme has two parts:
a) Urban self-employment Programme,
b) The urban Wage Employment Programme. The bank credit is available for Urban Self Employment programme.
Government Sponsored Scheme # 5. Swarna Jayanti Gram Swarozgare Yozna (SGSY):
Before introduction of this scheme there were different schemes with same aim. In order to provide better co-ordination all these schemes like IRDP, TRYSEM, DWCRA, SITRA, GKY and MWS were replaced with this new scheme.
A brief description of this scheme is:
1. The scheme became operative in rural areas in 1999 covering all aspects such as organization of poor into self help group, training, credit, technology, infrastructure, marketing etc. This scheme is funded by the central and respective state government in ratio of 75: 25
2. The list of below poverty line (BPL) households identified through BPL census duly approved by the Gram Sabha are considered for assistance under SGSY. The objective of SGSY is to bring the assisted poor families (swarozgaries) above the poverty line by ensuring appreciable sustained income over period of time.
3. The rural poor such as those with land, landless labour, educated unemployed, rural artisans and disabled etc. are covered under the scheme.
Government Sponsored Scheme # 6. Scheme for Financing Self Help Groups (SHGS):
The aim of the scheme is to find out supplementary credit policies for meeting the credit needs of the poor as well as encouraging banking activity, both on the thrift and credit sides, in a segment of the population that the formal financial institutions usually find difficult to cover.
A self help group consists of many members but under this scheme no single member shall be financed by the bank. The bank shall extend finance to the Group only. If required the group may further extend financial help to individual members for any purpose. It is a link between the bank and SHG. Under this linkage programme there is need to the assessment of SHG for credit linkage.
Under the Self-Help Group (SHG) Bank linkage programme, banks are expected to finance such SHGs, which show certain minimum level of group dynamics, financial management capabilities and behavioural discipline. The NABARD has laid down certain criteria for selection of SHGs for the purpose of lending, which envisage active existence of SHGs for at least six months.
Successful saving and credit operations from own resources, democratic working, maintenance of proper accounts/records, homogeneity and affinity among members and support from Non-Governmental Organization (NGO)/Self Help Promoting Institutions (SHPI) in the grooming of SHGs. Certain norms have been devised for identification of SHGs for credit linkage for the use and benefit of all banks which are in very detail and require no mention here.