Home › Circulars › RBI/2005-06/229

Private Banks Must Actively Join Lead Bank Scheme Fora

Current & verified — this is the latest version
Source: Reserve Bank of India · RBI/2005-06/229 · issued 06 Dec 2005 · ~1 min read
Quick answerRBI advises private sector banks to actively participate in Lead Bank Scheme meetings, improve credit flow to priority sectors, and ensure attendees have decision-making powers and branch progress data.
The rule, in the simplest words
How it plays out — a real example

An agri & priority-sector lending officer in Indore gets a call from her regional manager: 'Next week's district meeting needs you—bring branch data on farm loans and weaker-section lending, and be ready to accept targets on the spot.' She prepares the numbers, attends, and when the committee proposes a ₹2 crore target for small farmers, she agrees immediately, avoiding regulatory scrutiny.

What changed

RBI observed persistent issues: banks skipping district/block meetings, sending staff without branch performance data or decision-making authority, and new generation banks rejecting targets set by District Level Consultative Committees. This circular reiterates earlier instructions from December 2005, urging full compliance.

What it means for you

Private banks must now treat Lead Bank Scheme participation as a compliance priority. Non-attendance or sending low-level delegates risks regulatory scrutiny. Banks must also accept credit targets for agriculture, priority sector, and weaker sections, and ensure their representatives can commit on the spot.

What you must do

Who it affects

All Indian private sector banks, New generation private banks, Branch managers and district coordinators, Priority sector lending teams

❓ Common questions

What is the Lead Bank Scheme?

It is a district-level coordination mechanism where banks, led by a designated lead bank, plan and monitor credit flow to priority sectors and weaker sections.

What happens if my bank does not participate?

RBI has flagged non-participation as a concern. Continued absence or low-level engagement may lead to regulatory action or adverse observations during inspections.

Do we have to accept all targets set by the District Level Consultative Committee?

Yes, the circular explicitly states that non-acceptance of targets by new generation banks is not acceptable. Banks must work within the committee's approved framework.

📜 Read the original circular — full text as issued by RBI
RBI/2005-06/229 No. RPCD. LBS. BC. No.50/02.01.01/2005-06 December 06, 2005 The Chairman/Managing Director/Chief Executive Officer (All Indian Private Sector Banks) Dear Sir, Participation in various fora under Lead Bank Scheme Please refer to our Circular letter No. RPCD.LBS.BC.76/02.01.01/2004-05 dated 28 th January, 2005 on the captioned subject through which private sector banks were requested to take active part in various for a under Lead Bank Scheme and Government sponsored schemes and cooperate with the Lead Bank concerned in the district and take appropriate steps to improve the flow of credit to the priority sector/weaker sections so that comprehensive credit planning and monitoring can be done at various levels. 2. In this connection, we observe : - a. Non-participation/low level participation by banks in district/block level meetings, b. Participants attending the meetings having no feed back on the progress of their bank branches in the district; c. Participants attending the meeting often not having decision making powers; d. Non acceptance of targets by new generation banks, approved by District Level Consultative Committee. In view of the above, you are once again advised to ensure that your bank actively participates in these fora and increases the flow of credit to agriculture, priority sector and weaker sections of the society. Yours faithfully, (A.K.Bhandari) Deputy General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2005-06/229 · issued 06 Dec 2005. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
🏦 Branch Manager
  • Brief attendees with up-to-date branch-level progress data on priority sector and weaker section lending.
📜 Compliance
  • Ensure your bank's representatives attend all district and block level Lead Bank Scheme meetings.
  • Delegate decision-making authority to meeting participants so they can accept targets on the spot.
  • Accept and work towards credit targets approved by the District Level Consultative Committee.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template

Example: if you are a Compliance officer at a bank this circular applies to (All Indian private sector banks, New generation private banks, Branch managers and district coordinators, Priority sector lending teams), your first concrete step on “Private Banks Must Actively Join Lead Bank Scheme Fora” is: “Ensure your bank's representatives attend all district and block level Lead Bank Scheme meetings.” (RBI issued this 06 Dec 2005).

  1. Circular: RBI/2005-06/229 -- Private Banks Must Actively Join Lead Bank Scheme Fora
  2. Issued: 06 Dec 2005
  3. Action required: Ensure your bank's representatives attend all district and block level Lead Bank Scheme meetings.
  4. Action required: Brief attendees with up-to-date branch-level progress data on priority sector and weaker section lending.
  5. Action required: Delegate decision-making authority to meeting participants so they can accept targets on the spot.
  6. Action required: Accept and work towards credit targets approved by the District Level Consultative Committee.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

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BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=2656&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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