What is Lead Bank Scheme?

What is Lead Bank Scheme?

The origin of the LBS in India can be traced to the late 60’s.

LBS was introduced in 1969, based on the recommendations of the Gadgil Study Group.

The Gadgil group has recommended “Area Approach” for the development of financial structure through intensive efforts.

To transform the Gadgil’s groups recommendation into reality, RBI set up a committee under F.S.Nariman, to fine tune the details.

This banker’s committee, headed by F. S. Nariman, concluded that districts would be the units for area approach and each district could be allotted to a particular bank which will perform the role of a Lead Bank.

As a consortium leader, the Lead Bank would

  1. co-ordinate with government office’ s, banks and other stakeholders,
  2. undertake planning and formulation of Annual District Credit Plans through Block and District Consultative Committees and
  3. help in synergizing all efforts to fulfill Plan priorities and district-specific requirements.

The LBS has been able to achieve great success in the rural areas, and also it has aided in building up a cadre of Bank Officers devoted to Rural Banking.

A central component of LBS is the SLBC’s (State Level Bankers Committee) Meetings. These SLBC Meetings are a great tool for networking and driving the Annual District Credit Plan.

Reserve Bank of India, RPCD Department, in order to revitalize the SLBC Meetings has today (26/07/2010) issued a Notification. The Notification No. is RBI/2010-11/136 RPCD.CO.LBS.BC.No 15 /02.19.10/2010-11, dt.July 26, 2010, addressed to all CMDs of all SLBC Convener Banks.

The highlights are:

  1. The circular dt.26th July, 2010, is to be read in conjunction with PCD.CO.LBS.HLC.BC.No.56/02.19.10/2009-10 dated February 26, 2010.
  2. State Chief Ministers may be encouraged to attend at least one SLBC meeting in a year.
  3. SLBC’s have been   requested to arrange workshops for district administration on the recommendations of High Level Committee to review Lead Bank Scheme, in the right locations with appropriate content in order to make it interesting and relevant for District Magistrates and other stakeholders.

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