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
- Ensure your bank's representatives attend all district and block level Lead Bank Scheme meetings.
- Brief attendees with up-to-date branch-level progress data on priority sector and weaker section lending.
- 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.
Who it affects
All Indian private sector banks, New generation private banks, Branch managers and district coordinators, Priority sector lending teams
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.