Union Rural Development Minister Jairman Ramesh on Thursday shot down suggestion of bankers that extending loans should be made mandatory for the Rural Self Employment Training Institutes (RSETI) trainees to start their ventures, saying adopting it could lead to "scams" in states such as Bihar, Uttar Pradesh and Madhya Pradesh.
He was of the opinion the success of the southern States such as Karnataka, Andhra Pradesh and Kerala in implementing the model cannot be "extrapolated" in the Northern States unless there are commitment from the people and stakeholders who have made it work well.
RSETI which are supervised by the RD Ministry provides self-employment training to rural youths.
The training model includes short term training for market-linked entrepreneurship development followed by continuous hand holding support with bank linkages. Jairman suggested the banks to exercise diligence in execution of the scheme when suggestions were made that loans disbursement to the trainees be made compulsory.
"This is very dangerous. One has to be careful. The moment you say every bank is a RSETI and RSETI trainees will get a bank loan...In Bihar, Uttar Pradesh and Madhya Pradesh, this will become a scam. Don't do this. Keep it limited, leave it to the banks and built up gradually," Jairam said during an interaction at a function here celebrating Rural Self Employment Training Institutes (RSETI) diwas.
In this regard, he hailed Canara Bank and Syndicate bank for exercising the due diligence in giving loans and in areas where people are seeking self-employment and have an entrepreneurial bend of mind.
He felt the present level of disbursement was not bad as one third of the trainees have been already given loan. He also felt the success of the southern states such as Karnataka, Andhra Pradesh and Kerala in implementing the model cannot be "extrapolated" in the Northern states unless there are commitment from the people and stakeholders who have made it work well.
The Minister also expressed dissatisfaction over some components of the RSETI model and suggested that consolidation should be the aim of the programme instead of expansion.
"In fact, one district, one RSETI model, I have been opposed to it from day one. I inherited this model, I could not change it. If it is in my power, I would have closed down some of the RSETI. You need a cluster of those, you should not have one district, one RSETI model," he said.
At present, 566 RSETIs are functioning across the country sponsored by different banks, some of which were awarded on Thursday.