Mumbai, February 13 The RBI on Friday proposed revised guidelines for the Lead Bank Scheme (LBS) to streamline operational aspects and further enhance the effectiveness of the programme, which was introduced in 1969 to coordinate development activities at the district level.
The LBS aims to coordinate the activities of banks, the government, and other developmental agencies through forums established under the scheme to enhance the flow of credit to priority sectors for inclusive growth and deeper financial inclusion.
The proposed guidelines aim to fine-tune the objectives of the scheme – the structure, membership, and agenda of various forums; a clear delineation of the roles and responsibilities of key functionaries; and provisions to further strengthen the State Level Bankers' Committee (SLBC) and Lead District Manager offices, among others.
"The RBI shall designate a commercial bank as the Lead Bank in each district, to coordinate the efforts of credit institutions, the Government, and other stakeholders to improve credit flow to priority sectors and promote financial inclusion in the district," stated the draft circular on the Lead Bank Scheme (LBS).
The SLBC Convenor Banks would coordinate the activities of all banks in the state and regularly discuss operational problems in lending with state government officials, while extending necessary support for banking development and to achieve the objective of greater financial inclusion, it added.
The convenor banks should take up with the state governments / other concerned government departments, any impediments, such as issues related to road/digital connectivity, a conducive law and order situation, uninterrupted power supply, and adequate security, to ensure adequate banking coverage and achieve greater financial inclusion.
"Under LBS, a bottom-up approach is envisaged for credit planning. Potential should be estimated for various sectors at the block-wise/activity-wise level, so as to prepare credit plans accordingly," the draft said.
Since the Credit Deposit Ratio (CD Ratio) is an important parameter of credit disbursed in relation to deposits mobilized in the area, it should be monitored at different levels, the draft said while prescribing certain parameters.
Banks are required to achieve a CD Ratio of 60 per cent in respect of their rural and semi-urban branches, taken together on an All-India basis.
The central bank has invited comments/feedback on the draft circular by March 6, 2026.