Postgres role does not inherit permissions from its member role
Thanks to one of my colleague, I could resolve this issue. You have to first grant permission to the schema. EXECUTE format('GRANT USAGE ON SCHEMA %I TO %I', schem, role_name);.
Until then things won't work. Also, there was a typo in my passing parameter which I found after I passed this step.
I was debugging the issue in another direction since I was referring the admin user created by RDS when database getting created. That user has all the grant records in role_table_grants table. That is why I thought this is an inheritance issue. Good learning BTW :)