Source: ET
Why in News?
The Reserve Bank of India (RBI) has issued draft revised guidelines to overhaul the Lead Bank Scheme (LBS) to improve district-level credit delivery, coordination, and financial inclusion across the country.
Objective of the Revamp
- Enhance effectiveness of the scheme introduced in 1969.
- Strengthen institutional coordination among banks, governments, and development agencies.
- Improve monitoring and delivery of credit at the district level.
- Reduce regional disparities in banking access and lending.
Key Proposed Reforms
- Clearer roles and responsibilities of stakeholders under LBS.
- Strengthening of:
- State Level Bankers’ Committees (SLBCs)
- Lead District Manager (LDM) offices
- Improved data reporting and monitoring mechanisms.
- Stronger institutional framework for district-level planning.
- Greater focus on credit flow to underserved regions.
About the Lead Bank Scheme (LBS)
- Introduced: 1969
- Purpose: Improve financial inclusion and banking development across districts.
- Under the scheme:
- Each district is assigned a Lead Bank.
- The Lead Bank coordinates banking services and credit expansion in that district.
- Focus areas include priority sector lending, financial inclusion, and regional development.
