The Lead Bank Scheme (LBS) was introduced in 1969 by the Reserve Bank of India (RBI) with the aim of promoting financial inclusion and rural development. Under this scheme, each _________ in India is assigned a Lead Bank responsible for coordinating credit and banking activities in that region. Fill in the gap.​

Correct option is B

The Lead Bank Scheme (LBS) was introduced in 1969 by the Reserve Bank of India (RBI) with the objective of improving financial inclusion and rural development. Under this scheme, each district in India is assigned a Lead Bank, which is responsible for coordinating credit and banking activities in that region.

The Lead Bank identifies the credit requirements of the district, prepares district-level credit plans, and works in close collaboration with other banks and government agencies through a structured committee framework such as the District Consultative Committee (DCC) and the State Level Bankers’ Committee (SLBC).

Key Objectives:

• To expand banking and credit access in rural and underbanked areas.

• To reduce regional disparities in the distribution of institutional credit.

• To promote priority sector lending, especially in agriculture, micro and small enterprises, and other productive economic activities.

• To ensure effective coordination among different banks and financial institutions.

Operational Structure:

1. Assignment:
Each district is assigned to a Lead Bank, selected based on the bank’s branch network and presence in the area.

2. Coordination:
The Lead Bank functions as the nodal agency to synchronize the activities of all credit institutions operating in the district.

3. Planning:
It follows a bottom-up approach, identifying local development potential, assessing credit needs, and preparing area-specific credit plans accordingly.

4. Committee Framework (Three-tier system):

• Block Level Bankers’ Committee (BLBC): Focuses on block-level coordination and prepares block credit plans.

• District Consultative Committee (DCC): Brings together bankers and district officials to discuss and resolve district-level issues.

• State Level Bankers’ Committee (SLBC): Acts as the apex forum at the state level, ensuring inter-agency coordination and policy alignment across districts.