Reserve Bank of India introduced the Lead Bank Scheme to guide commercial, regional, rural and Co-operatives banks to improve their facilities in rural areas and deliver effective services.
Enrich Your Learning:
Lead Bank Scheme:
- The Lead Bank Scheme was introduced in 1969 to guide commercial, regional, rural and Co-operatives banks 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 was evolved the Lead Bank Scheme.
Aim of the Scheme:
- The aim of the scheme is providing adequate banking and credit in rural areas through an ‘area approach’ with one bank assigned for one area.
- There is a “district credit” plan combined with government schemes and it is prepared and monitored by the lead bank.
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 and doubling the income of farmers by 2022:
- These banks are advised to Include ‘Doubling of Farmer’s Income by 2022’ as a regular agenda under Lead Bank Scheme.
- Lead banks have to work closely with NABARD in preparation of Potential Linked Plans (PLPs) & Annual Credit Plans for doubling the income of farmers.
- The effectiveness of the Lead Bank Scheme depends on the dynamism of the District Collectors and the Lead District Managers (LDMs).