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Lead Bank Scheme

This is the scheme prepared at village level, of an objective to help the farming community.

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Lead Bank Scheme

  1. 1. Presented by Nishanth S BSA-12-244
  2. 2. Introduction Lead Bank Scheme (LBS) was introduced in 1969, based on the recommendations of the Gadgil Study Group. National Credit Council (NCC) in Lead Bank Scheme: The National Credit Council was set up in December 1967. To determine the priorities of bank credit among various sectors of the economy.  The NCC had appointed a study group in October 1968 under the chairmanship of Prof. D. R. Gadgil – to suggest an appropriate organisational framework for effective implementation of social objectives.  Report was submitted in October 1969.
  3. 3. Gadgil Study Group – outcome & recommendation Outcome of the Study Group: as on June 1967  Nationalized banks provide 83% of total credit.  Banking facilities not available to 617 of 2700 towns.  Commercial Banks had penetrated only 5000 villages (negligible @ 1%)  Besides, the credit needs of Agriculture, SSI and allied activities – neglected. Recommendation: 1) Banks should provide integrated banking facilities in unbanked areas. 2) Adoption of ‘Area Approach’- in unbanked areas – each bank should adopt an area. 3) Help agriculture and SSI. 4) ‘District’ identified as the smallest geographical unit for the scheme.
  4. 4. Objectives of Lead Bank Scheme  Sri. F. K. F. Nariman Committee appointed by RBI – In the same year.  Same recommendations were given.  Nationalized Banks should act as a ‘Lead Bank’.  336 Districts to be distributed between nationalized banks. Objectives of Lead Bank Scheme: 1) Eradication of unemployment and under employment. 2) Appreciable rise in the standard of living for the poorest of the poor. 3) Provision of some of the basic needs of the people who belong to poor sections of the society.
  5. 5. LB – as a Consortium Leader Lead Bank – Consortium Leader: Each district had been assigned to different banks (public & private). --- co-ordinating the efforts of all credit institutions a. for expansion of branch banking facilities b. for meeting the credit needs of the rural economy Allotment of Districts:  All the districts in the country.  Except – metropolitan cities of Mumbai, Kolkata, Chennai and Union Territories of Chandigarh, Delhi and Goa.  Later on, Union Territories of Goa, Daman and Diu, Delhi & Chandigarh – also brought into purview of LBS.
  6. 6. LBS Banks were allotted Districts in the basis of: 1. The capacity of the Bank – popularity of the bank in the area. 2. Geographical continuity of the Districts forming clusters. 3. If possible each Bank to operate in more than 1 State. 4. If possible to have more than 1 Bank in one State.  Lead Banks were to first undertake an impression survey of whole District.  Then a detailed survey regarding saving potential, credit requirement, credit gaps or surplus. District Consultative Committee (DCC’s):  Constituted in the lead districts during 1971-73.  To facilitate co-ordination of activities of all the Banks and the Financial Institutions & Govt. departments.
  7. 7. Functions 1) Survey resources and development of banking in the area. 2) Survey the dependency on money lenders by industrial units, farms etc., 3) Survey the facilities for storing (fertilizers & agricultural inputs), marketing, credit facilities for marketing. 4) Offering training to staff for advice to small borrowers & farmers in priority sectors. 5) Assist other agencies and involve co-operative banks, RRB’s, SFC’s, KVIB, NABARD.
  8. 8. Advantages 1. Spread the availability of banking facilities all over the country. 2. Inter link the Commercial and Cooperative banks. 3. More effective Branch Expansion. 4. Better relationship between Govt. and Banks. 5. Integration of credit activities of banks. 6. Bottlenecks in the development of a District can be located and removed. 7. Lead Bank Scheme would assist in implementation of the District Plan.
  9. 9. District Credit Plan (DCP’s)  First implemented in 1974.  DCP – consists of technically & economically viable schemes which can be taken up for financing.  It is a plan of bankable schemes in agriculture, industry and service sectors of the District.  The schemes can be taken up by different financial institutions in the District.  Implement the programme in collaboration with other institutions.  Monitor progress & evaluate progress in achieving targets.
  10. 10. Progress of Lead Bank Scheme 1. By 1974 - 90% of geographical areas in Assam, Bihar, W. Bengal, Orissa, M.P., U.P covered. 2. 2 study groups appointed by RBI in Gujarat & Maharastra concluded: a) Lead Banks were successful in identifying potential area for new branches. b) Formulation & implementation of DCP’s was slow.  They suggested preparation of Annual Action Plans followed by Annual Credit Plans (ACP’s)  By mid 90’s the Lead Bank Scheme covered 493 Districts.  As on June 30, 2014, 25 public sector banks and one private sector bank have been assigned lead bank responsibility in 671 districts of the country.
  11. 11. Problems – Lead Bank Scheme  Confusion regarding the concept of Lead Bank especially for opening branches – ambiguous scope & objectives.  Co-ordination & effective functioning between banks & F.I’s – not just providing finance.  Problems in allotment of Districts.  Expertise – knowledge on the district, agriculture, projects, etc.,  Problems in preparation and uniformity of DCP’s.  Other Infrastructure.  Did not consider the role of co-operatives – important source of institutional finance.
  12. 12. Service Area Approach (SAA)  1980’s shortcomings of LBS identified.  SAA introduced in April 1989.  Every branch and RRB allotted 15 to 25 districts = Service Area.  Survey of villages, then village-wise credit plans prepared.  Credit plan to be monitored by Lead Bank. Advantages: 1. Branch can be concentrate on development of a village. 2. Duplication can be avoided. 3. Lending can be organized and planned. 4. End – use better controlled.
  13. 13. Committee State Level Bankers’ Committee District Consultative Committee, Review Committee. Standing Committee Block Level Bankers’ Committee STATE LEVEL DISTRICT LEVEL BLOCK LEVEL Today banks have to open 25% of their branches in a year, in unbanked rural area
  14. 14. Usha Thorat Committee  The GOI – constituted a High Power Committee headed by Mrs. Usha Thorat, Deputy Governor of RBI.  To suggest reforms in the Lead Bank Scheme.  Sharper focus on facilitating financial inclusion rather than a mere review of the govt. sponsored credit schemes. (Reason: most forums to monitor the implementation of LBS are being used for routine review of the govt. sponsored schemes, credit deposit ratio, recovery performance among others.Lending under such schemes constitute 0.4% of the total priority sector lending.)
  15. 15. Usha Thorat Committee Recommendations:  LBS should be continued to accelerate financial inclusion in the unbanked areas of the country.  Private sector banks should be given a greater role in LBS action plans, particularly in areas of their presence.  Enhance the business correspondent model, making banking services available in all villages having a population of above 2,000 and relaxation in KYC (know your customer) norms for small value accounts. “ The review on LBS has been made with a focus on financial inclusion and in view of the recent developments in the banking sector. The scheme has been found useful to promote financial inclusion in the country. Hence it should be continued” Usha Thorat May 22, 2009
  16. 16. Details of Lead Banks in Tamil nadu Quarter ended December 2012 SR District Name District code(BS R) Name of Lead Bank Name of LDM Contact Details Tel MOBILE e-mail Address 1 ARIYALUR 943 STATE BANK OF INDIA D MURALI KRISHNAN 04329-222163 220002 94458 60547 agmlboariyalur@sbi.co.in TRICHY MAIN ROAD,Ariyalur-621 704 2 CHENNAI INDIAN OVERSEAS BANK AMBITI ARUNA KUMAR 044-25323252 94441 16801 lbochennai@iobnet.co.in, lbochennai@gamil.com 15, HUMTERS ROAD, DOVETON, CHENNAI - 600 112 3 COIMBATORE 920 CANARA BANK K KRISHNAMOORT HI 0422-2542359 94432 90526 lbocoimbatore@canarabank.co m NO.27, JAWANS BAWAHAN, OPP TO COURT BUILDING, COIMBATORE 641018 4 CUDDALORE- 906 INDIAN BANK DR. P.SETHURAMAN 04142-222832, 231640 94421 39221 ibrocud@indianbank.co.in NO. 4 BHARATHY ROAD, Cuddalore 607001 5 DHARMAPURI 916 INDIAN BANK Mr. MUTHARASU 04342-264633, 260082 94431 48633 ldmdharmapuri@yahoo.co.in DDDC BUILDING, PENNAGARAM ROAD, Dharmapuram-636 702 6 DINDIGUL 939 CANARA BANK JOHN NELSON 0451-2426760 94890 45842 lbodindigul@canarabank.com SALAI ROAD, Dindigul 624 001 7 ERODE 924 CANARA BANK M SELVARAJU 0424-2240293, 2261833 94890 43556 lboerode@canarabank.com 76 PARK ROAD, Erode 638 003 8 KANCHEEPUR 903 INDIAN BANK DOMNIC MARIAKUMAR 27222156, 3013, 7117 94449 87070 ldmkancheepuram@indianbank. co.in 510/511 GANDHI ROAD, Kancheepuram 631 501
  17. 17. 9 KANYAKUM ARI 936 INDIAN OVERSEAS BANK N DEVANATH 04652-233461 94862 76642 leadbank@nagesco.iobnet.co.i n 64/B FIRST FLOOR, CHRISTU NAGAR MAIN ROAD , NAGERCOIL - 629001 10 KARUR 912 INDIAN OVERSEAS BANK S.M.MURUGESA N 04324-234815 94426 13165 dinlbd@erosco.iobnet.co.in 12J, EIGHTY FEET ROAD, Karur 639 002 11 KRISHNAGIRI 950 INDIAN BANK T RUDRAPPA 04343 - 236074 - 237390 94422 90901 iblbo.kgiri635@yahoo.co.in 410, FIRST FLOOR, GANDHI ROAD, Krishnagiri 635 001 12 MADURAI 930 CANARA BANK C MANOKARAN 0452-2330335 94421 89880 lbomadurai@canarabank.com 118, WEST PERUMAL MAISTRY ST., Madurai 625 001 13 NAGAPATTIN AM 909 INDIAN OVERSEAS BANK A.KADIRVELU 04365-240170 94866 01188 2005lbd@nagasco.iobnet.co.in 584, PUBLIC OFFICE ROAD, VELIPPALAYAM, Nagapattinam 611 001 14 NAMAKKAL 915 INDIAN BANK R ARIVALAGAN 04286-221866 94439 41389 ldmnamakkal@indianbank.co.i n 31, RENGAR SANNATHI ST., Namakkal 637 001 15 NILGIRIS 918 CANARA BANK K MOHAN 0423-2443633 94890 43558 lboooty@canarabank.com COMMERCIAL ROAD, UDHAGAMANDALAM, Nilgiris 643 001 16 PERAMBALU R 914 INDIAN OVERSEAS BANK S.CHANDRASEK AR 04328-277898 94422 71994 ldmpblr@gmail.com 229-A/15-2 RENGA NAGAR, Perambalur 621 212 17 PUDUKOTTAI 938 INDIAN OVERSEAS BANK S. RAMASAMY 04322-221777 94426 10725 lbdpudukottai@karsco.iobnet.c o.in 5476, OLD THIRUMAYAM ROAD, NEAR VICTORIA ARCH, Pudukkottai 622 001 18 RAMANATH APURAM 932 INDIAN OVERSEAS BANK K.S. SURESH BAPU 04567-220277 94426 32145 leadbank@tutsco.iobnet.co.in 3-A SANNATHI STREET, Ramanathapuram 623 501 19 SALEM 913 INDIAN BANK J RAVICHANDRA N 0427- 2312499,2319661 94433 66180 ldmsalem@indianbank.co.in 3RD FLOOR, FORT MAIN ROAD, Salem 636 007 20 SIVAGANGA 922 INDIAN OVERSEAS BANK DURAICHAMY 04575-240508 94426 10408 lbdsivagangai@karsco.iobnet.c o.in C' BLOCK, NO. 6, T.S.NO.4/2-B, THONDI ROAD, Sivanganga 630 561
  18. 18. 21 THANJAVUR 908 INDIAN OVERSEAS BANK N GAJENDRANAT HAN 04362-238798 94422 71993 leadbank@tansco.iobnet.co.in 85 B MARKET ROAD EXTENSION THANJAVUR , 6130001 22 THENI 942 CANARA BANK G BALAKRISHNA N 04546-255378 97909 63474 lbotheni@canarabank.com 365-A MADURAI ROAD, Theni 625 531 23 THIRUVANN AMALAI 919 INDIAN BANK C.SEKHAR 04175-222647 94425 04971 lbdtvm@gmail.com 47, SANNATHI STREET (UPSTAIRS), Thiruvannamalai 606 601 24 TIRUCHIRAP ALLI 911 INDIAN OVERSEAS BANK S PRABHAKARAN 0431-2465577 94437 07854 roplan@tri1sco.iobnet.co.in 215, MADURAI ROAD, Tiruchirapalli 620 001 25 TIRUNELVEL I 934 INDIAN OVERSEAS BANK S.ALAGARSAMY 0462-2332411 94426 20472 lbtirun@tirsco.iobnet.co.in 131, EAST CAR STREET, II FLOOR, Tirunelveli 627 006 26 TIRUPPUR 305 CANARA BANK V GANESAN 0421-2210957, 2212870 94890 43557 lbotiruppur@canarabank.com CANARA BANK MAIN BRANCH, PALADAM ROAD, Tiruppur 641 604 27 TIRUVALLUR 902 INDIAN BANK T.R. SURESH 27663382 94449 87069 ldmtiruvallur@gmail.com 2, PANAGAL STREET, Thiruvallur 602 001 28 TIRUVARUR 907 INDIAN OVERSEAS BANK R.SAMARAJ 04366-221269 94425 70007 lbtiruvarur@nagasco.iobnet.co .in 33/C-1, THANJAVUR ROAD, Tiruvarur 610 001 29 TUTICORIN 933 STATE BANK OF INDIA K ELAMARAN 0461-2324066 /4200066 94432 48166 sbi.09900@sbi.co.in SME BRANCH , FIRST FLOOR, 360 BEACH ROAD, TUTICURIN 628002 30 VELLORE 904 INDIAN BANK T. MAHENDRAN 0416-2223044 94425 04974 leadbankvellore@indianbank.c o.in 46-51, KATPADI ROAD, TKM COMPLEX, Vellore 632 001 31 VILLUPURA M 940 INDIAN BANK A RAJENDRAN 04146- 227380,242291 94430 47742 ldmvillupuram@indianbank.co .in VVA TOWER, 793, NEHRUJI ROAD, Villupuram 605 602 32 VIRUDHUNA GAR 926 INDIAN OVERSEAS BANK P SULAIMAN 04562-244645 94421 44645 leadbankvnr@gmail.com 74,RAILWAY FEEDER ROAD, Virudhunagar 626 001
  19. 19. References Websites: • www.slideshare.com • http://www.gktoday.in/lead-bank-scheme/ Text Books: • S. Subba Reddy, P. Raghu Ram, Agricultural Finance and Management, pg. no. 30-31

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