What changed
RBI issued a circular on March 2, 2010, implementing recommendations from a High-Level Committee that reviewed the Lead Bank Scheme. The committee found LBS useful but stressed sharper focus on financial inclusion. Key changes include strengthening SLBC/DCC machinery, reiterating quarterly DCC meetings, forming sub-committees for specific issues, and expanding agenda items to cover IT-enabled inclusion, credit counselling, and RSETI training institutes.
What it means for you
Banks must now prioritize financial inclusion in all LBS forums, moving beyond routine credit plan reviews. DCC meetings must address unbanked areas, monitor banking access roadmaps, and discuss 'enablers' vs 'impeders' for inclusive growth. Lead District Managers (LDMs) need better infrastructure and support to drive these changes. This shifts focus from mere compliance to active, outcome-oriented coordination with state governments.
What you must do
- Strengthen SLBC/DCC machinery to dedicate more time to financial inclusion issues, including IT-enabled banking and unbanked area mapping.
- Set up DCC sub-committees for intensive work on specific inclusion topics and ensure they submit reports to the DCC.
- Expand DCC agenda to include monitoring of banking access roadmaps, priority sector credit flow, SHG-bank linkage, SME financing, educational loans, and relief measures during calamities.
- Ensure Lead District Managers (LDMs) have adequate infrastructural support and are officers of appropriate level and attitude.
- Monitor and report progress on implementing these recommendations, including 'Credit Plus' activities like credit counselling centres and RSETI training institutes.
Who it affects
Lead Banks, All Scheduled Commercial Banks, State Level Bankers' Committees (SLBCs), District Consultative Committees (DCCs), Lead District Managers (LDMs), State Governments
What is the main objective of the revised Lead Bank Scheme?
The overarching objective is to enable banks and state governments to work together for inclusive growth, with a sharper focus on financial inclusion and recent banking sector developments.
How often should DCC meetings be held under the new guidelines?
DCC meetings should be convened by Lead Banks at quarterly intervals, as per extant instructions.
What are 'Credit Plus' activities mentioned in the circular?
These include setting up Credit Counselling Centres and RSETI-type training institutes to provide skills and capacity building for managing businesses, as part of inclusive growth initiatives.