On October 23rd, 2014, we updated our
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Banking which caters specially to
the development needs of poor
Objectives of Social Banking
To provide credit facilities to the small farmers ,small
traders, cottage industries and self employed persons.
To give priority to industries which produce essential
To provide financial resources for the welfare
Major Social banking schemes
Lead Bank Scheme
Service Area Approach(SAA)
Village Adoption Scheme
Differential Rate of Interest Scheme(DIR Scheme)
Priority sector lending
Micro Finance via SHG-Bank Linkage Programme
What is Lead
A bank in each district is
selected as a key instrument
A bank which
Acts as a
Activities of a lead bank
To survey the credit needs of the district
To evolve a credit action plan for the district
To work with the government in the development
To make sure that small borrowers are served
effectively by the business
Assisting primary lending services
Survey the resources and potential for banking
development in the district
7. Helps in marketing the agricultural and industrial
8. Recruiting and training staff, for offering advice to
small borrowers and farmers, in the priority sectors.
9. Setting the district consultative Committee in coordination with other banks and financial
To bring about an orderly and planned
development of rural and semi-urban areas of the
Semi Urban Banks
Allocate Specific Villages
Stages of SAA
Identification of the service area for each bank
Survey for assessing the lending potential of villagers
Preparation of annual credit plans for each service area
Co-ordination of credit institution and various agencies
Advantages of SAA
Improving economic status of people
Helping banks by focus on small areas
Making lending activity easily amenable to supervision
Development of each area through micro level
Ensuring co-ordination among financial banks and
other development agencies
Encouraging people participation and involvement in
credit planning and dispensation
Development of selected villages in an integrated manner
Meeting credit need of poor
Watershed development/livelihood based activities
In tribal dominant villages, development through
Assessment of credit needs/formulation of projects for
Creation of infrastructure in co-ordination with the
Marketing related intervention
Environmental/ecological related interventions
Value chain management
Implementation of development programme as
envisaged under government plan
Introduced in March 1972
Provide concessional rate of interest to low income
group for productive purposes
Features of DRI Scheme
Lending at lower rate.
Main objective is upliftment of backward strata in the
Banks monitor the utilization of loans.
Short term ,medium term and long term loans are
provided under this scheme.
Introduced in 1967-68
To provide adequate
and timely financial
support at reasonable
rate to priority sectors
RBI stipulates banks to provide credit under
Priority sector as follows
Weaker Sections – 10%
Agriculture – 18%
Government give much importance to Priority
Micro credit is the
provision of thrift,
credit and other
financial services and
products of very
small amount to the
Introduced by Nobel Laureate and
founder of Grameen Bank
“The poor are like “bonsai", which could have grown
into taller trees if given proper soil. Micro Credit can
unleash the hidden energy of the poor so that they
can take care of themselves”
In India Micro Finance is linked to
Self Help Groups(SHG)
A SHG is a registered or unregistered group of micro
entrepreneurs having homogeneous social and
economic backgrounds. They save money, to
contribute to a common fund and to meet their
emergency needs on the basis of mutual help.
Functioning of SHG-bank linkage program
NGOs and banks interact with the poor, especially
women, to form small homogenous groups.
They are taught simple accounting methods to
maintain their accounts.
They meet frequently and collect small amount of
savings from their members.
This pooled savings enable them to open a formal
bank account in the name of the group.
This is the first step in establishing link with the
formal banking system
Out of the pooled savings they give small loans to
members for meeting their small emergent needs.
7. Empowerment is achieved through group
dynamics, decision-making, and funds management.
8. When the pooled thrift grows they can receive
external funds in multiples of their group savings.
9. Bank loans enable the group members to undertake
income generating activities.