LEAD BANK SCHEME
Pursuant to the above recommendations, of the Study Group headed by Prof. D. R. Gadgil (Gadgil Study Group) on the Organizational Framework for the Implementation of the Social Objectives and a Committee of Bankers on Branch Expansion Programme of Public Sector Banks appointed by the Reserve Bank of India under the Chairmanship of Shri F. K. F. Nariman (Nariman Committee) Lead Bank Scheme was introduced by the 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 the priority sector and other sectors and to promote banks' role in the overall development of the rural sector. For coordinating the activities in the district, a particular bank is assigned ‘Lead Bank’ responsibility of the district. The Lead Bank is expected to assume a leadership role for coordinating the efforts of the credit institutions and the Government.
In view of the several changes that had taken place in the financial sector, the Lead Bank Scheme was last reviewed by the High Level Committee headed by Smt. Usha Thorat, the then Deputy Governor of the Reserve Bank of India in 2009.
The High Level Committee held wide ranging discussions with various stakeholders viz. State Governments, banks, development institutions, academicians, NGOs, MFIs etc. and noted that the Scheme has been useful in achieving its original objectives of improvement in branch expansion, deposit mobilisation and lending to the priority sector, especially in rural/semi urban areas. There was overwhelming consensus that the Scheme needs to continue. Based on the recommendations of the Committee, the guidelines were issued to SLBC Convenor banks and Lead Banks for implementation. In view of the changes that have taken place in the financial sector over the years, the Reserve Bank of India had constituted a “Committee of Executive Directors” of the Bank to study the efficacy of the Scheme and suggest measures for its improvement. Based on the Committee’s recommendations and feedback received from various stakeholders, certain ‘action points’ were issued to SLBC Convenors/Lead Banks and NABARD on April 6, 2018 as Revamped LBS. The revamped LBS is in force now.
Fora under Lead Bank Scheme
i. Level Bankers’ Committee (BLBC)
ii. District Consultative Committee (DCC)
iii District Level Review Committee (DLRC)
iv. State Level Bankers’ Committee (SLBC)
Block Level Bankers’ Committee (BLBC)
Block Level Bankers’ Committee (BLBC) is a forum for achieving coordination between credit institutions and field level development agencies at the block level. The forum prepares and reviews the implementation of the Block Credit Plan and also resolves operational problems in the implementation of the credit programmes of banks. The Lead District Manager (LDM) of the district is the Chairman of the Block Level Bankers’ Committee. All the banks operating in the block including the Small Finance Banks, 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
District Consultative Committee (DCC)
The District Consultative Committees were constituted as a common forum at the 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 including Small Finance Banks in the district, co-operative banks including the District Central Cooperative Bank (DCCB), RRBs, Payments Banks 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 (LDM) convenes the DCC meetings. The Director of Micro, Small and Medium Enterprises Development Institute (MSME-DI) in the district is an invitee in districts where MSME clusters are located to discuss issues concerning MSMEs.
District Level Review Committee (DLRC)
DLRC meetings are Chaired by the District Collector and attended by members of the District Consultative Committee (DCC). Public Representatives i.e. Local MPs/MLAs/ Zilla Parishad Chiefs are also invited to these meetings. The DLRC meetings should be convened by the Lead Banks at least once in a quarter. The DLRC is a forum to review the pace and quality of the implementation of various programmes under the Lead Bank Scheme in the district. Hence, association of non-officials is considered useful. Lead Banks are required to ensure the presence of public representatives in DLRC meetings as far as possible. Therefore, Lead Banks should fix the date of DLRC meetings with due regard to the convenience of the representatives of the public i.e. MPs/MLAs etc. and invite and involve them in all functions conducted by the banks in the districts, such as opening of new banking outlets, distribution of Kisan Credit Cards, SHG credit linkage programmes, etc. Responses to queries from public representatives need to be accorded highest priority and attended to promptly. The follow up of the DLRC’s decisions is required to be discussed in the DCC meetings.
State Level Bankers’ Committee (SLBC)
The State Level Bankers’ Committee (SLBC) was constituted in April 1977, as an apex inter-institutional forum to create adequate coordination machinery in all States, on a uniform basis for development of the State. SLBC is chaired by the Chairman/ Managing Director/ Executive Director of the Convenor Bank. It comprises representatives of commercial banks including Small Finance Banks, RRBs, Payments Banks, State Cooperative Banks, RBI, NABARD, heads of Government departments including representatives from National Commission for Scheduled Castes/Tribes, National Horticulture Board, Khadi & Village Industries Commission etc. and representatives of financial institutions operating in a State, who come together and sort out coordination problems at the policy implementation level. Representatives of various organizations from different sectors of the economy like industry bodies, retail traders, exporters, farmers’ unions, etc. are special invitees in the SLBC meetings for discussing their specific problems, if any. SLBC meetings are held on quarterly basis. The responsibility for convening the SLBC meetings would be of the SLBC Convenor Bank of the State.