Lead Bank Scheme-Master Circular

The Reserve Bank of India has issued guidelines on Lead Bank Scheme from time to time. This Master Circular consolidates the relevant guidelines issued by Reserve Bank of India on Lead Bank Scheme up to June 30, 2017. This Master Circular has been placed on the RBI website http://www.rbi.org.in 

Lead Bank Scheme-Master Circular


(i) The genesis of Lead Bank Scheme (LBS) can be traced to the Study Group headed by Prof. D. R. Gadgil (Gadgil Study Group) on the organizational framework for implementation of the social objectives, which submitted its report in October 1969. The Study Group drew attention to the fact that commercial banks did not have adequate presence in rural areas and also lacked the required rural orientation. The Study Group, therefore, recommended the adoption of an ‘Area Approach’ to evolve plans and programmes for the development of an adequate banking and credit structure in the rural areas.

(ii) A Committee of Bankers on Branch Expansion Programme of public sector banks appointed by Reserve Bank of India under the Chairmanship of Shri F. K. F. Nariman (Nariman Committee) endorsed the idea of area approach in its report (November 1969) recommending that in order to enable the public sector banks to discharge their social responsibilities, each bank should concentrate on certain districts where it should act as a ‘Lead Bank’.

(iii) Pursuant to the above recommendations, the Lead Bank Scheme was introduced by Reserve Bank of India in December 1969. The Scheme aims at coordinating the activities of banks and other developmental agencies through various fora in order to achieve the objective of enhancing the flow of bank finance to priority sector and other sectors and to promote banks’ role in overall development of the rural sector. For coordinating the activities in the district, a particular bank is assigned the lead bank responsibility of the district. The lead bank is expected to assume leadership role for coordinating the efforts of the credit institutions and Government.

2. Fora under Lead Bank Scheme

2.1 Block Level Bankers’ Committee (BLBC)

BLBC is a forum for achieving coordination between credit institutions and field level development agencies at the block level. The forum prepares and reviews implementation of Block Credit Plan and also resolves operational problems in implementation of the credit programmes of banks. Lead District Manager of the district is the Chairman of the Block Level Bankers’ Committee. All the banks operating in the block including the district central co-operative banks, RRBs, Block Development Officer, technical officers in the block, such as extension officers for agriculture, industries and co-operatives are members of the Committee. BLBC meetings are held at quarterly intervals. The Lead District Officer (LDO) of RBI and the District Development Manager (DDM) of NABARD selectively attend the meetings of the BLBCs. The representatives of Panchayat Samitis are also invited to attend the meetings at half yearly intervals so as to share their knowledge and experience on rural development in the credit planning exercise.

2.2 District Consultative Committee (DCC)

2.2.1 Constitution of DCC

DCCs were constituted in the early seventies as a common forum at district level for bankers as well as Government agencies/departments to facilitate coordination in implementing various developmental activities under the Lead Bank Scheme. The District Collector is the Chairman of the DCC meetings. Reserve Bank of India, NABARD, all the commercial banks in the district, co-operative banks including District Central Cooperative Bank (DCCB), RRBs, various State Government departments and allied agencies are the members of the DCC. The Lead District Officer (LDO) represents the Reserve Bank as a member of the DCC. The Lead District Manager convenes the DCC meetings. The Director of Micro Small and Medium Enterprises Development Institutes (MSME-DI) is an invitee in districts where MSME clusters are located to discuss issues concerning MSMEs.

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