Lead Bank Scheme Master

What is Lead Bank Scheme?


Origin of the Lead Bank Scheme (LBS): Group headed by famous Prof. D. R. Gadgil (Gadgil Study Group) on the Organizational Framework for the Implementation of the Social Objectives and after detail studies, report submitted in the year1969.

Group observed/stated that COMMERCIAL BANKS DID NOT HAVE ADEQUATE PRESENCE IN RURAL AREAS AND ALSO LACKED THE REQUIRED RURAL ORIENTATION. 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.

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Lead Bank Scheme


Lead Bank Scheme

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) endorsed the idea of an ‘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’.

Lead Bank Scheme

Pursuant to the above recommendations, the Lead Bank Scheme was introduced by the Reserve Bank of India in December 1969.

Lead Bank Schemes
Lead Bank Schemes

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.

Lead Bank Schemes

The Lead Bank is expected to assume a leadership role for coordinating the efforts of the credit institutions and the Government.

Lead Bank Scheme

2. Fora under Lead Bank Scheme

2.1 Block Level Bankers’ Committee (BLBC) at BLOCK LEVEL

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, Wholly Owned Subsidiaries (WOS) of Foreign Banks, RRBs, the District Central Co-operative Banks, 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.

To strengthen the BLBC forum which operates at the base level of the Lead Bank Scheme, it is necessary that all branch managers attend BLBC meetings and enrich the discussions with their valuable inputs. Controlling Heads of banks may also attend a few of the BLBC meetings selectively. Participation by the District Development Manager (DDM) of NABARD in BLBCs would ensure better and more meaningful discussions for the development of the Block.

Therefore, NABARD has been advised that DDMs should attend all Block Level Bankers’ Committee meetings in their districts and actively participate in the credit planning exercise and review meetings at the block level.

The Lead District Officer (LDO) of the Reserve Bank of India (RBI) selectively attends the BLBC meetings. 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. Payments Banks should also be invited to attend the meetings.

Lead Bank Scheme

Lead Bank Schemes
Lead Bank Schemes

2.2 District Consultative Committee (DCC)

2.2.1 Constitution of DCC

Top Level Banker’s Committee at District Level. The District Collector is the Chairman of the DCC meetings. Reserve Bank of India, NABARD, all the commercial banks including Small Finance Banks, Wholly Owned Subsidiaries (WOS) of Foreign Banks, RRBs, Payments Banks, Co-operative banks including the District Central Cooperative Bank (DCCB), various State Government departments and allied agencies are the members of the DCC.

Lead Bank Scheme
Lead Bank Scheme

Lead Bank Scheme

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.

2.2.2 Conduct of DCC Meetings

DCC meetings should be convened by the Lead Banks at quarterly intervals.

At the DCC level, sub-committees as appropriate, may be set up to work intensively on specific issues and submit reports to the DCC for its consideration.

DCC should give adequate feedback to the SLBC on various issues that need to be discussed on a wider platform, so that these receive adequate attention at the State Level.

2.2.3 Role of LDMs

As the effectiveness of the Lead Bank Scheme depends on the dynamism of the District Collectors and the Lead District Managers (LDMs), with the support of the Regional/Zonal Office, the office of LDM should be sufficiently strengthened with appropriate infrastructural support.

Apart from the provision of a separate office space, technical infrastructure like computers, printer, data connectivity, etc. which are basic necessities for LDMs to discharge their core responsibilities may be provided to LDMs’ Office without exception. Officers of appropriate level, attitude and possessing requisite leadership skills should be posted as LDMs.

Additionally, it is suggested that a dedicated vehicle may be provided to LDMs’ to facilitate closer liaison with the bank officials, district administration officials as also to organise/ attend various financial literacy initiatives and meetings. The absence of a specialist officer/assistant for data entry/analysis is a common and major issue faced by LDMs.

Liberty to hire the services of skilled computer operator may be given to the LDMs to overcome the shortage of staff/ in case appropriate staff is not posted at LDM office. Further, for successful functioning of the Lead Bank Scheme, we expect Lead Banks to go the extra mile to provide facilities over and above the bare minimum to these critical field functionaries.

Apart from the usual role of LDMs like convening meetings of the DCC/DLRC and periodical meetings of DDM/ LDO/ Government officials for resolving outstanding issues

Lead Bank Scheme

2.2.4 Quarterly Public Meeting and Grievance Redressal

The Lead District Manager should convene a quarterly public meeting at various locations in the district in coordination with the LDO of Reserve Bank, banks having presence in the area and other stakeholders to generate awareness of the various banking policies and regulations relating to the common person, obtain feedback from the public and provide grievance redressal to the extent possible at such meetings or facilitate approaching the appropriate machinery for such redressal.

2.2.5 District Level Review Committee (DLRC) Meetings

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. Public representatives (MPs/ MLAs / Zilla Panchayat Chiefs) shall invariably be invited to DLRC meetings.

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., to invite and involve them in all functions conducted by the banks in their 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 forum may also have representatives of State Minority Commission, SC/ST Corporation and representatives of the group of beneficiaries of rural lending. The forum may also consider inviting people with the expertise in the fields, such as progressive farmers and local industrialists as special invitees. The follow up of the DLRC’s decisions is required to be discussed in the DCC meetings.

Lead Bank Scheme

2.3 State Level Bankers’ Committee (SLBC)

2.3.1 Constitution of SLBC

i) 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, Wholly Owned Subsidiaries (WOS) of Foreign 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.

Recognising that SLBCs, primarily as a committee of bankers at the State level, play an important role in the development of the State, illustrative guidelines on the conduct of State Level Bankers’ Committee meetings have been issued.

2.3.2 Conduct of SLBC Meetings

i) SLBC meetings are required to be held regularly at quarterly intervals. The meetings are chaired by the Chairman/ Managing Director/ Executive Director of the Convenor Bank and co-chaired by the Additional Chief Secretary or Development Commissioner of the State concerned. In cases where the Managing Director/Chief Executive Officer/Executive Director of the SLBC Convenor Bank is unable to attend SLBC Meetings, the Regional Director of the RBI shall co-chair the meetings along with the Additional Chief Secretary/Development Commissioner of the State concerned. A High Level of participation in SLBC/UTLBC meetings ensures an effective and desired outcome with meaningful discussion on issues of public policy of both the Government of India and the Reserve Bank of India.

ii) The Chief Minister/Finance Minister and senior level officers of the State/RBI (of the rank of Deputy Governor / Executive Director) may be invited to attend the SLBC meetings. Further, the State Chief Ministers are encouraged to attend at least one SLBC meeting in a year.

iii) State Level Bankers’ Committee meetings should primarily focus on policy issues with participation of only the senior functionaries of the banks/ Government Departments. All routine issues may be delegated to sub-committee(s) of the SLBC. A Steering Sub-committee may be constituted in the SLBC to deliberate on agenda proposals from different stakeholders and finalise a compact agenda for the SLBC meetings. Typically, the Sub-Committee could consist of SLBC Convenor, RBI & NABARD representatives & senior State Government representative from the concerned department, e.g. Finance/ Institutional Finance and two to three banks having major presence.

iv) Other issue-specific sub-committees may be constituted as required. The sub committees may examine the specific issues relating to agriculture, micro, small/medium industries/enterprises, handloom finance, export promotion and financial inclusion, etc. in-depth and devise solutions/recommendations for adoption by the full committee. They are expected to meet more frequently than the SLBC. The composition of the sub-committees and subjects/ specific issues impeding/enabling financial inclusion to be deliberated upon, may vary from State to State depending on the specific problems/issues faced by the States.

v) The secretariat/offices of the SLBC should be sufficiently strengthened to enable the SLBC Convenor Bank to effectively discharge its functions.

vi) The various fora at lower levels may give adequate feedback to the SLBC on issues that need to be discussed on a wider platform.

vii) Several institutions and academicians are engaged in research, studies etc. that have implications for sustainable development in agriculture and MSME sector. Engaging with such research institutions and academicians would be useful in bringing in new ideas for furthering the objectives of the Lead Bank Scheme.

The SLBCs may, therefore, identify such academicians and researchers and invite them as ‘special invitees’ to attend SLBC meetings occasionally both for adding value to the discussions and also associate them with studies appropriate to the State. Other ‘special invitees’ may be invited to attend SLBC meetings depending on the agenda items/issues to be discussed in the meetings.

viii) The activities of NGOs in facilitating and channelling credit to the low income households are expected to increase in the coming years. Several corporate houses are also engaged in corporate social responsibility activities for sustainable development. A linkage with such NGOs/Corporate houses operating in the area to ensure that the NGOs/corporates provide the necessary ‘credit plus’ services can help leverage bank credit for inclusive growth. Success stories could be presented in SLBC meetings to serve as models that could be replicated.

Lead Bank Scheme

2.3.4 SLBC – Yearly Calendar of Meetings

i) To improve the effectiveness and streamline the functioning of SLBC/UTLBC meetings, SLBC Convenor Banks have been advised to prepare a yearly calendar of programmes (calendar year basis) in the beginning of the year itself, for conducting the meetings. The calendar of programmes should clearly specify the cut off dates for data submission to SLBC and acceptance thereof by the SLBC Convenor.

This yearly calendar should be circulated to all the concerned as an advance intimation for blocking of future dates of senior functionaries of various agencies like Central Government, State Governments, banks, RBI, etc. The SLBC/UTLBC meetings should be conducted as per the calendar under all circumstances. The agenda should also be circulated in advance without waiting for the data from defaulting banks.

The matter should, however, be taken up with the defaulting banks in the SLBC meeting. In addition, the SLBC Convenor Bank should write a letter in this regard to the controlling office of the defaulting banks under advice to the Regional Office of RBI. The SLBC Convenor Bank will, however, continue to follow-up with banks for timely data submission. Further, in case the Chief Minister, Finance Minister or other very senior functionaries are not able to attend the SLBC on some very rare occasion, then if so desired by them, a special SLBC meeting can be held. Following broad guidelines should be used for preparation of the calendar of programmes:

ActivityTo be completed by (Date)
Preparation of calendar of SLBC/UTLBC meetings and intimation to all the concerned of the cut-off dates for submission of data and dates of meetings as per the dateline given below.15th January every year
Reminder regarding the exact date of meeting and submission of data by banks to SLBC15 days before end of the quarter
Dead line for receipt of information/data by SLBC Convenor Bank15 days from the end of the quarter
Distribution of agenda cum background papers20 days from the end of the quarter
Holding of the meetingWithin 45 days from the end of the quarter
Forwarding the minutes of the meeting to all stakeholdersWithin 10 days from holding the meeting
Follow-up of the action points emerged from the meetingTo be completed within 30 days of forwarding the minutes (for review in the next meeting)

ii) The objective of preparing the calendar of meetings in the beginning of the year is to ensure adequate notice of these meetings and timely compilation and dispatch of agenda papers to all stakeholders. It also ensures clear cut guidelines for the submission of data to SLBC Convenors by participating banks & Government Departments. It is expected to save precious time of SLBC Convenors otherwise spent in taking dates from various senior functionaries attending these SLBC meetings.

iii) SLBC Convenor Banks need to appreciate the advantages of ensuring adherence to the yearly calendars. SLBC Convenor Banks have therefore been advised to give wide publicity to the annual calendar at the beginning of the year and ensure that dates of senior functionaries expected to attend the meetings are blocked for all meetings by their offices.

In case, despite blocking dates, if for some reason, the senior functionary is not able to attend the meeting, the meeting should be held as planned in the calendar. More importantly, the data for review in these meetings should be received as per deadlines set in the calendar and those who do not submit the data in time should be asked to explain the reasons for delay in sending the data that may be recorded in the minutes of the meeting. Under no circumstance, should the preparation of the agenda be delayed beyond the dates stipulated as per the calendar.

3. Implementation of Lead Bank Scheme

3.1 Preparation of credit plans

Planning plays an important role in the implementation of the Lead Bank Scheme and a bottom-up approach is adopted to map the existing potential for development. Under LBS, planning starts with identifying block-wise/ activity-wise potential estimated for various sectors.

3.2 Potential Linked Credit Plans (PLPs)

1. i) Potential Linked Credit Plans (PLPs) are a step towards decentralized credit planning with the basic objective of mapping the existing potential for development through bank credit. PLPs take into account the long term physical potential, availability of infrastructure support, marketing facilities, and policies/programmes of Government etc. NABARD to take measures to ensure that PLPs should be more focussed and implementable so that banks can utilize them more gainfully while preparing the Branch Credit Plan. PLPs should emphasise on promotion of sustainable agricultural practices suitable to local conditions. While preparing the PLPs, the focus must be on identifying processes and projects that:

reduce the carbon foot-print,

prevent the overuse of fertilizers,

ensure efficient utilisation of water and

address agricultural pollution issues.

The plans must also focus on promoting innovative farming systems such as organic farming, bio dynamic farming, permaculture and sustainable small-scale farming, as also promoting Farmer Producer Organisations (FPOs) and Farmers’ Markets. Such initiatives must be supported by appropriate investments and project finance frameworks.

ii) A pre-PLP meeting is convened by LDM during June every year to be attended by banks, Government agencies, etc., to reflect their views and concerns regarding credit potential (sector/activity-wise) and deliberate on major financial and socio-economic developments in the district in the last one year and priorities to be set out for inclusion in the PLP. The DDM of NABARD makes a presentation in this meeting outlining the major requirements of information for preparing the PLP for the following year. The preparation of PLP for the next year is to be completed by August every year to enable the State Government to factor in the PLP projections.

iii) The procedure for preparing the District Credit Plan is as follows:

Controlling Offices of commercial banks including Small Finance Banks, Wholly Owned Subsidiaries (WOS) of Foreign Banks and Head Office of RRB and DCCB/LDB circulate the accepted block-wise/activity-wise potential to all their branches for preparing the Branch Credit Plans (BCP) by their respective branch managers. Banks should ensure that the exercise of preparation of branch/block plans is completed in time by all branches so that the Credit Plans become operational on time.

A special Block Level Bankers’ Committee (BLBC) meeting is convened for each block where the Branch Credit Plans are discussed and aggregated to form the Block Credit Plan. The DDM and the LDM guide the BLBC in finalizing the plan, ensuring that the Block Credit Plan is in tune with the potentials identified activity-wise including in respect of Government Sponsored Schemes.

All the Block Credit Plans of the district are aggregated by the LDM to form the District Credit Plan (DCP). This plan indicates an analytical assessment of the credit needs of the district to be deployed by all the financial institutions operating in the district and the total quantum of funds to be earmarked as credit by all the financial institutions for a new financial year. The Zonal/Controlling Offices of banks, while finalizing their business plans for the year, should take into account the commitments made in the DCP which should be ready well in time before the performance budgets are finalized.

The District Credit Plan is then placed before the DCC by the Lead District Manager for final acceptance/approval. All the District Credit Plans are eventually aggregated into a State Level Credit Plan to be prepared by SLBC Convenor Bank and launched by the 1st of April every year.

The corporate business targets for branches, blocks, districts and states may be aligned with the Annual Credit Plans (ACP) to ensure better implementation. The Controlling Offices of the banks in each state should synchronize their internal business plans with the ACP.

3.3 Monitoring the Performance of Credit Plans

The performance of the credit plans is reviewed in the various fora created under the Lead Bank Scheme as shown below:

At Block LevelBlock Level Bankers’ Committee (BLBC)
At District LevelDistrict Consultative Committee (DCC) & District Level Review Committee (DLRC)
At State LevelState Level Bankers’ Committee (SLBC)


Overall Lead Bank Scheme plays an Important role  in providing various Financial Services to the Vast Section of Disadvantageous group of people, Rural Development where no financial Services accessed by the people. Lead Bank in the district act as a facilitator to maintain liaison between District Authority, RBI, Government Departments, Line Departments, NABARD, RSETI, NGO etc.


1.What is the lead bank scheme of RBI?

Ans: 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) endorsed the idea of an ‘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’.

2.What is  LDM in bank?

Ans: Officer who is the Incharge of the Lead Bank Office in the District, selected by the Lead Bank in the District. LDM is a employee of the Bank itself.

3.Lead bank scheme was introduced in which year in India:

Ans.  1969

4.Who is the Chairmain of BLBC?

Ans.: The Lead District Manager.

5. Full Form of SLBC?

Ans.: State Level Banker’s Committee

6.Full Form of DCC?

Ans.: District Level Consultative Committee

7. Full Form of DLRC?

Ans.: District Level Review Committee



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