4. Lead Bank Scheme
A bank having a relatively large network of
branches in the rural areas of a given district finance and man power
resources generally has been entrustred with the lead responsibility for
the district.
Lead Bank may be Private or Govt.
Objectives:-
Credit provide for rural areas
Preparation of Credit Plan for District level
5. Group under Chairmanship Dr. D.R. Gadagil appointed
Under the National Credit Council – recommended “Area Approach”
for unbanked districts. By RBI Act 1934
Report submitted in October 1969
Bank should provide integrated banking facilities in unbanked areas
District identified as the smallest geographical unit for the scheme
Lead bank is the leading bank among the commercial banks in a district.
6. Nationalized bank should develop a district
Lead Bank Scheme: 336 District to be distributed between
nationalized banks at the starting point
First Nationalization of Bank in 1969 of 14 Banks
Second Nationalization of Bank in 1980of 6 banks under the banking
regulation Act 1949
Scheme applicable to all districts except the Metro. Cities of
Mumbai, Kolkata, Chennai, Delhi, Pondicherry and Goa.
8. Lead Bank Scheme
Development Plan
SHG
Integration of
Various Schemes
Production
Marketing
Establishment of
industries
Area Development
Industrial
Development
Sector Flow of
Credit
District Credit Plan
9. District Credit Plans
The district credit plan is based on the
strategy of development sustainable to a particular district taking into
account principle economic activities and their potential for development.
In india there are 731 district currently all district is covered by “Lead
Bank Scheme” to provide loan.
10. First implemented for Jaintia Hills District of Meghalaya in 1974
The district was allotted to the State Bank of India (SBI) under the lead
bank scheme
The methodology followed in the compilation of the first District Credit
Plan for Jaintia Hills
On the Basis of the Growrh Center Aproach
DCP – consists of technically and economically viable schemes which can
be taken up for financing
It is plan of bankable scheme in agriculture, industry and service sector of
the District
The scheme can be taken up by the different financial institute in the district
11. The lead bank scheme has two important phage:
Phage I - Survey of the lead district
Survey resources and development of banking in the area
Survey the dependence on money leaders by industrial units, farm
etc.
Examining the market facilities available for agriculture and
industrial commodities and liking credit with marketing
Survey the facilities for storing (Fertilizer & agricultural inputs)
Estimating the credit gaps in various sector of the district economy
Developing contacts and maintaining liaison with the govt. and
other agencies
12. Phage II - Preparation of the district credit plan
Formulate banking loaning scheme having labour intensive
orientation so as to generate employment
Provide desired loan to increase the productivity of land and allied
activities
Reduce unemployment and thus increase income level
Give maximum credit to weaker section of the society mainly for
productive purpose.
13. Review of the first District Credit Plan (1974-79)
The first Credit Plan for Jaintia Hills was implemented by the tow existing Commercial Bank
The first round credit plan was complited as started earlier on the “Growth Center
Approach”
1. State Bank of India
2. United Bank of india
3. Co-operative Apex Bank
S. N. Name of the Bank Plan allocation
(Rs. In lakhs)
Achievement
(Rs. In lakhs)
Percentage
Achievement
1 State Bank of India 8.92 6.96 78.0
2 United Bank of india 7.52 3.08 50.5
3 Co-operative Apex Bank 2.88 6.94 41.0
Source: second round district credit plan p.37
Credit Plan for Jaintia Hills District, First Plan, S.B.I., Rgional Officr, Shillong, ppt.1-2.
14. Review of the Second District Credit Plan (1980-82)
Plan allocation and achievement (1980-82)
1. State Bank of India
2. United Bank of india
3. Co-operative Apex Bank
S.
N.
Name of the Bank Plan allocation
(Rs. In lakhs)
Achievement
(Rs. In lakhs)
Percentage
Achievement
1 State Bank of India 57.36 55.24 96.30
2 United Bank of india 25.57 4.77 18.65
3 Co-operative Apex Bank 15.92 4.71 29.58
Source: Credit Plan for Jaintia Hills District, First Plan, S.B.I., Rgional Officr, Shillong, ppt.1-2.
15. Progress of lead bank scheme
In 1974 – 90% of area in Assam, Bihar, W.Bnagal, Orissa, MP, UP
covered
Study group appointed by RBI in Gujarat & Maharastra conclude
Lead bank were successful in identifying potential area for new
branches
Formulation and implementation of DCP
The suggested Annual Credit Plan
Now 731 district is cover by Lead Bank Scheme.
16. Problems – Lead bank scheme
Confused regarding the concept of “Lead Bank Scheme”
Co-ordination and effective Functioning between bank and Borrower is
not good
Problems in allotment districts
Less expertise knowledge about the district of different sector as like
agriculture and allied sector etc.
Problems in preparation and uniformity of DCP
Less literacy level of peoples and poor communication system.
17. Reference:
1. Agricultural Economics – S.SUBBA REDDY- P. 393 to 394
2. Pdf
http://shodhganga.inflibnet.ac.in/jspui/bitstream/10603/55525/9/09_chapter%205.pdf
3. Credit Plan for Jaintia Hills District, First Plan, S.B.I., Rgional Officr, Shillong, ppt.1-2.
4. https://www.slideshare.net/Boicha/lead-bank-scheme