The RBI launched the Lead Bank Scheme (LBS) to mobilise deposits and step-up lending to weaker sections of the economy. When was the scheme launched?
- AOption (a)
1969
- BOption (b)
1958
- COption (c)
1962
- DOption (d)
1973
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Correct answer
1969
Why this answer is correct
The correct answer is 1969.
Key Points
- The Reserve Bank of India (RBI) launched the Lead Bank Scheme (LBS) in 1969.
- The primary aim of the Lead Bank Scheme was to mobilize deposits and enhance lending to weaker sections of society.
- The scheme was part of a broader initiative to promote financial inclusion and ensure that banking services reach underbanked and unbanked areas.
- Under this scheme, a designated bank, known as the Lead Bank, is responsible for the overall development and banking coverage of its assigned district.
- The scheme fosters coordination and collaboration among various banks and financial institutions to achieve inclusive growth.
Additional Information
- Financial Inclusion:
- It refers to the process of ensuring access to financial services and timely and adequate credit for all, especially vulnerable groups such as weaker sections and low-income groups, at an affordable cost.
- Financial inclusion aims to eliminate barriers and provide financial tools to all individuals and businesses to effectively manage their finances.
- Priority Sector Lending (PSL):
- Under PSL, banks are required to allocate a portion of their lending to specified sectors like agriculture, micro and small enterprises, and others that have a significant impact on large sections of the population.
- PSL is a major component of the Lead Bank Scheme aimed at directing more credit to priority sectors.
- District Credit Plans (DCPs):
- These are formulated under the Lead Bank Scheme to ensure a coordinated approach to credit planning.
- DCPs involve the preparation of a plan for each district, identifying the credit potential and setting targets for lending by banks operating in the district.
- Service Area Approach (SAA):
- Introduced in 1989, SAA is a part of the Lead Bank Scheme where each bank branch is assigned specific villages for providing financial services.
- This approach ensures that all villages are covered by banking services and helps in better monitoring and performance of rural branches.