The article talks about a few innovative promotional schemes, like Rural Industrial Development Program (RIDP), Assistance for Marketing of Non-farm products of Rural Women (MAHIMA), Assistance to Rural Women in Non-farm Sector Development (ARVIND), Community Service Center and Flexible Approach Scheme, for non-farming sector of NABARD. The development of non-farming sector is important from both policy and developmental point of view.

It is praiseworthy that Indian banking sector has achieved the target of agricultural credit during 2005-06 and the time is not far when this will also achieves the target to double the its achievement in the next two years if everything goes right. However, the word of caution given by Finance Minister, P Chidambaram, in Bancon 2006, held at Hyderabad, cleared that he is more inclined to provide quality credit than merely achieving the target. On the other hand, he also asked the banks to double the credit to Small and Medium Enterprises (SMEs) and Non-farming Sectors in the next five years.

The question arises whether the Indian banking scenario is really ready for this and whether they have sufficient funds to finance SMEs and Non-farming Sectors in the long run, amidst tough competition with foreign banks. There is no doubt, banks are financing SMEs and non-farming sectors in one or the other way. But as far as the magnitude of the funds is needed, they will surely make the bankers anxious in future. Thus, in a changing environment, banks need to diversify their role in non-farm sector in order to uplift the economy and rural sector.

Professional Banker Magazine, Non-farming Sector, Rural Industrial Development Program, RIDP, Promotional Schemes, National Bank for Agriculture and Rural Development, NABARD, Agricultural Ccredit, Small and Medium Enterprises, SMEs, Rural Industrial Development Program, RIDP, Government Organizations, NGOs, Non-farm Sector Development, Business Development, Skill Development.