Answer & Enrich Your Learning:
About Lead Bank Scheme:
- The Lead Bank Scheme was introduced in 1969, to guide commercial, regional, rural and Co-operatives to improve their facilities in rural areas and deliver effective services.
- The Reserve Bank of India on the basis of the study group under the Chairmanship of Prof. D.R. Gadgil and a committee of Bankers headed by F.K.F.Nariman evolved the Lead Bank Scheme.
- A “district credit” plan combined with government schemes is prepared and monitored by the lead bank.
- The effectiveness of the Lead Bank Scheme depends on the dynamism of the District Collectors and the Lead District Managers (LDMs).
Aim of the Scheme:
- The aim of the scheme is providing adequate banking and credit in rural areas through an ‘service area approach’, with one bank assigned for one area.
Objectives of The Lead Bank Scheme:
- To identify unbanked and underbanked centres in districts and to evaluate their physiographic, agro climatic end Socio-economic conditions through economic survey.
- To help in removing regional imbalances through appropriate credit deployment;
- To extend banking facilities to unbanked areas;
- To estimate credit gaps in various sectors of an economy of a district and prepare a credit plan accordingly.
- To identify economically viable and technically feasible schemes.
- To effect structural and procedural changes in banking sector.
- To develop co-operation amongst financial and non-financial institutions, in overall development of the districts.
- To serve as a clearing house for discussions of problems arising out of financing priority sectors.
Lead banks are in terms of doubling the income of farmers by 2022 advised to:
- Work closely with NABARD in preparation of Potential Linked Plans (PLPs) & Annual Credit Plans.
- Include ‘Doubling of Farmer’s Income by 2022’ as a regular agenda under Lead Bank Scheme.