1. COMMERCIAL BANKS & ECONOMIC DEVELOPMENT

2. Economic Development may be defined as a process whereby an economy’s National Income is carried on from a lower to a higher plank over a long period..

3. Economic Development through Banking System Mobilisation of Savings Mobilisation of Savings Creation of Creditcapt. Creation of Creditcapt.Form. Channelising the Funds into Productive Investment Channelising the Funds into Productive Investment Banks Facilitate Uniform Growth of all Regions Banks Facilitate Uniform Growth of all Regions Fuller Utilisation of Resources Fuller Utilisation of Resources Encourage Right Type of Industries Encourage Right Type of Industries Finance to Government Finance to Government Banks are Entrepreneurs Banks are Entrepreneurs

4. Economic Growth and Indian Banks- Innovative Schemes

5. The Lead Bank Scheme (1969): Obj.- to bring equity in distribution of credit to different sectors & in spread of banking offices Process: 1. Special areas to be assigned to each selected commercial banks 2. Indepth survey & identify growth centers and gaps 3. Formulate plans and programs for the development of banking strutcure 4. 338 districts were allotted to the SBI & Assoc.,14 Nationalised banks & 3 pvt. Banks 5. A Lead bank of specific district is supposed to play the role of ‘Consortium Leader’ of all banking thru District Credit Plan 6. To ensure smooth and adequate flow of credit to priority sectors & weaker sections of the society Result: The Lead Bank Scheme covered 580 districts upto end of March 2002

6. Village Adoption Scheme: Obj.: To finance agricultural and allied activities for an overall improvement of rural economy. (to avoid any overlapping) Process: 1. Selection of village 2. Survey of the village to assess potential for development 3. Preparation of action Program 4. Identification of eligible borrowers 5. Formulation of proposals for development of individual farms Results: By end June 2008 banks adopted 3,41,042 villages and financed 5 million direct agricultural loan accounts involving a total amount of Rs.5557 cr. (comparatively not much of success)

7. Service Area Approach Obj.: Development in the area of rural lending by creating a direct relationship between the rural branch personnel and rural community so that the benefits will flow to the weakest in rural community Process: 1. Assigning villages to each bank branch-service area 2. Survey of villages in the service area for assessing the village- wise potential for different activities and identification of beneficiaries for assistance 3. Preparation of credit plans on an annual basis by each branch for its service ares 4. Co-ordination between credit institutions on the one hand and field level development agencies on the other on and ongoing basis 5. Continuing system of monitoring the progress in implementation of the plans and individual schemes Results: By end of Months, credit plans prepared by all 42000 branches covering 6 lakh villages under NABARD

8. Self Employment Scheme for Educated Unemployed Youth-(SESEUY-1983) Obj.: to minimize the incidence of large scale unemployment among the educated unemployed youth by providing them means to undertake self-employment. Process: Target group 18 to 35 yrs. Minimum education upto SSC 1. Covering all parts of country except cities with over 10lakh population 2. Maximum permissible lime Rs.25000 per borrower without margin money-3 to 7years 3. Composite loan- working capt + Term loan with moratorium period of 6 to 18 months 4. With No security and banks to supervise the activities 5. Task force set up in each district:District Industries Centre, as chairman, representatives from lead bank, 2 other commercial banks, small Industries Service Institute and District Employment Officer. Results: by March 2007 amounted to Rs.1405 cr. For 2,31,524 beneficiaries during 2006-07. But since 1994, merged with Prime Minister Rozgar Yojana.

9. SELF-EMPLOYMENT PROGRAMME FOR URBAN POOR Obj.: to provide self-employment to urban (population over 10000) poor (Rs.600 per month) and should not have borrowed from any other banks- 1986 Process: it was mergedthen with the scheme of Urban Micro Enterprise with effect from April 1992 Result: by 1988-89 public sector banks sanctioned loans to 3.41 lakhs beneficiaries of Rs.130.69cr.

10. Swarnajayanti Gram Swarojgar Yojana Obj.: Poverty alleviation Program- 1999- aims at establishing micro enterprises in rural areas – holistic program of self- employment Result: provided bank credit to 12,36,511 of Rs.1141.2cr. By 2006-07

11. Integrated Rural Development Programme-1978 Obj.: helping the families living below poverty line through institutional credit enable them to acquire productive assets which would generate additional incom for the family Process: beneficiaries – small and marginal farmers, rural artisans, craftsmen Result: By 1980 5011 blocks in the country

12. Differential Interest Rate Scheme- 1972 Obj.: to assist the weakest among the weaker sections of the society. Process financial assistance at concessional rate of 4% for starting any income generating viable project - Annual income of the family not exceed Rs.1000 in rural Areas and Rs.3000 in urban and semi- urban areas Results: By March 2007, amounted to Rs708cr. in 42.87lakh borrowal accounts

13. Other Schemes Small Farmers Development Agency(SFDA) Small Farmers Development Agency(SFDA) Marginal Farmers and Agricultural Labourers Development Agencies Marginal Farmers and Agricultural Labourers Development Agencies Farmer’s Service Societies Farmer’s Service Societies Priority sector Lending Priority sector Lending Micro Finance Micro Finance