Boosting Self-Employment | Finance Ministry pushes banks to step up lending for employment schemes in J&K

Srinagar, Feb 18: The Finance Ministry has instructed banks in Jammu and Kashmir to increase credit lending under employment generation schemes to boost job creation in the Union Territory.

This directive has come during the UT Level Bankers Committee Meeting, in which Secretary Department of Financial Services, Ministry of Finance,  Vivek Joshi expressed concern over the high 22% rejection rate for loan applications under government-sponsored schemes intended to promote livelihoods and entrepreneurship.

As per the minutes of the meeting, Joshi emphasised the need for proper scrutiny of cases by line departments and sponsoring agencies before they are submitted to banks, to avoid later rejection. He called on banks to improve their approval rates for advances under key schemes.

"The House was informed that against the sponsorship of 38,611 cases banks operating in J&K have sanctioned Rs 1,213.60 crore in favour of 25,875 beneficiaries under various Employment Generation Schemes, i.e. PMEGP, NRLM, NULM, PMWMY, CCS for Artisans & Weavers and JKREGP up to September 30, 2023. This included Rs 882.64 crore for 15,230 beneficiaries under PMEGP, Rs 274.14 crore for 9,145 beneficiaries under NRLM, Rs 9.99 crore for 323 beneficiaries under NULM, Rs 1.31 crore for 116 beneficiaries under PMWMY, Rs 8.22 crore for 516 beneficiaries under CCS for Artisans & Weavers and Rs.37.30 Crore for545 beneficiaries under JKREGP. A target to cover 45,382 beneficiaries involving a credit of Rs.1,142.68 Crore was set under the employment generation schemes for FY 2023-24," reads a note of minutes of the meeting," reads a note of the UTLBC meet.

"Expressing concern over the high rate of rejection of cases under Employment Generation Schemes, Principal Secretary Finance stated that a rejection rate beyond 20% is something unusual and banks need to strive hard to bring it down. He urged upon the banks not to reject cases, sponsored under government-sponsored schemes, on flimsy grounds and for every rejected case there should be a solid reason for rejection," reads the minutes of the meeting.

He directed the Sponsoring agencies to carry out case-to-case analysis of the returned/ rejected cases with the concerned banks to find out the reasons for return so that remedial measures are put in place to check the same.

During the meeting, Banks were directed to come forward and provide hassle-free financial assistance under various Employment Generation Schemes to the unemployed youth who genuinely need it to earn their livelihood.

"For all Government schemes, the data on cumulative cases, cumulative advances NPA cases and NPA amount should also be presented as part of the UTLBC presentation. Banks are to refrain from creating procedural hazards while processing the cases under the Employment Generation Scheme and dispose of all eligible cases within the permitted guidelines. It should also be ensured that no case is pending beyond the stipulated Turn.  The gap in targets and sanctions should be minimized by supporting beneficiaries and educating them on the required documents. The Banks should track actual disbursal after sanction."