Lead Bank Scheme {नेतृत्व बैंक योजना}

The Lead Bank Scheme was launched in 1969 to establish the importance of bank credit among different sectors in the economy. It was launched to lead regional, commercial, rural, and co-operatives banks to develop their amenities in the villages and to deliver valuable services. The Reserve Bank of India evolved the Scheme with the help of Chairman Prof. D.R. Gadgil and a group of bankers whose head was F.K.F. Nariman. For preparation and regular monitoring of the Lead Bank Scheme, a 'district plan' was united with various government schemes.


  • To recognize unbanked and under banked centers in the areas and to examine their physiographic, socio-economic, and agro-climatic situations by doing the various economic surveys.
  • To help to eradicate the economic imbalances by suitable credit deployment.
  • To broaden banking services to unbanked villages.
  • To assess credit gas in different sectors of the economy of the districts and create a credit plan according to that.
  • To spot economically and technically feasible projects.
  • To affect the procedures and structures of the banking sector.
  • To develop teamwork among the financial institutions and non-financial institutions and complete up gradation of districts.
  • Work as a reimbursement house for the discussions of challenges rising for the financing of the concerned sectors.

Area Wise Method

The main idea behind this approach was to target and focus banking in specific areas. The head of the Banker's Committee S. Nariman added that; the districts would be allocated with particular banks under the lead bank scheme.

Phases of the Schemes

Consortium Leader

Every district under this Scheme will be assigned with various banks of both public and private sectors to regulate as the consortium leader of the harmonized efforts of the banks in the districts, mainly like branch expansion and credit forecast. The lead banks will act as the syndicate leader of the organizing of all the efforts of all the credit institutions in separate chosen districts for expansion of the bank branches and for providing the credit needs for the requirement of the village economy.

Allocation of districts

The districts of India anticipating the metro cities such as Mumbai, Chennai, Kolkata, Delhi, Union Territories of Chandigarh and Goa were also allotted with the public sector and numerous private sector banks. After that, the Union Territories of Diu, Daman, and Goa will also be allocated under the rural areas of the union territories like Chandigarh and Delhi. They are also among the purview of the Lead Bank Scheme.

District Consultative Committees

The next crucial expansion in the saga of this Scheme was the establishment of the D.C.C.s in districts. In the early 70s, the harmonization of the facilities of all the activities was given to the communities. These were handled by the financial institutions like banks and several departments of the Government. These committees were created to guide districts from 1971 to 1973.

District Credit Plan 

The most significant phase of the Lead Bank Scheme was the formulation of District Credit Plans and their execution. However, the structural gaps between the credits will be chosen before; the positive methods were launched after the banks were appropriately nationalized. These sectors, which were previously neglected, were provided with a priority rank, and they were asked to give credit to these banks in a more determined way.

Village adoption scheme (VAS)

Under this Scheme, the banks agreed to take a few villages in their control area for rigorous lending. The area method was not used in the up gradation of the selected regions for eluding the pitfalls and the invalid credit. In the early stages of VAS, India's reserve bank has supported banks to accept villages and prevent scattered lending.

Role of Lead District Manager

  • Collecting a variety of data from the Regional Rural Banks, Co-operative Banks, Scheduled Commercial Banks, other banks, and numerous government agencies.
  • Observing the execution of Annual Credit plans and various Government Sponsored Schemes in the selected areas.
  • Implementing the annual credit plans, he must provide the necessary infrastructure to accomplish the projects efficiently.
  • He must play the most crucial role in poverty easing programs introduced by the State or Central Government.
  • Researching for the Annual Credit Plan for the districts.

Usha Thorat Committee

The Government of India constituted a High-Power Committee in 2009, which was led by Mrs. Usha Thorat, the former Deputy Governor of Reserve Bank of India. The committee was created to suggest improvements for the Lead Bank Scheme to overcome the problems faced by the banks. The recommendations were:

  • The committee recommended improving the scope of the Scheme. 
  • It also suggested a more integrated focus on the facilities of financial inclusion instead of following a review of the credit schemes sponsored by the Government.
  • The Lead Bank Scheme must be continued to increase the financial inclusion of the unbanked areas of India.
  • The private sector banks will be given a more significant role in the Lead Bank Scheme for the action plans, mostly in immediate areas.
  • Improve the business correspondent model, while making the banking services accessible in all the villages with a population above two thousand and moderation in KYC norms for the accounts with a small value.

Therefore, it is seen that the lead bank scheme has more concentration on financial inclusion. That presumes significance in the recent developments of the banking sectors. The Usha Thorat Committee helped in the further continuance of the Scheme by renewing the Scheme for preserving the financial inclusion of India.

You will be able to learn more about this scheme on the official notification by RBI.

Frequently Asked Questions

Q. What is the Lead Bank Scheme?

The Lead Bank Scheme was launched to establish the importance of bank credit amongst the different sectors in the economy and to lead regional, commercial, rural, and co-operatives banks to develop their amenities in the villages and to deliver valuable services.

Q. When was the L.B.S. launched?

The Scheme was launched in December 1967.

Q. What is the aim of the Scheme?

The Scheme aimed to lead regional, commercial, rural, and co-operatives banks to develop their amenities in the villages and to deliver valuable services.

Q. What is the Usha Thorat Committee?

Usha Thorat was created to suggest improvements for the Lead Bank Scheme to overcome the problems faced by the banks.

Q. Why was the Scheme discontinued?

The Scheme was inactive because it could not achieve its targets to the fullest.

Q. When was the Scheme revamped again?

The Scheme was revamped again in 2009.

Q. How many cities were allocated under this Scheme?

All the districts of the country except the metro cities were allocated for the Scheme.