Introduction
The
Lead Bank Scheme was introduced by RBI in December 1969. The Scheme aims at
coordinating the activities of banks and other development agencies. For
coordinating the activities in the district, a particular bank is assigned the
lead bank’s responsibility of the district. The Scheme was last reviewed in
2009. Lead banks were advised to ensure that private sector banks are more
closely involved in the implementation of the Lead Bank Scheme.
Fora under Lead
Bank Scheme
Block Level
Bankers’ Committee (BLBC)
BLBC
coordinates between credit institutions and field level development agencies. It
prepares and reviews the implementation of Block Credit Plan, and also resolves
operational problems. LDM is the Chairman of BLBC. All the banks operating in
the block, BDO, technical officers, industries and co-operatives are members of
the Committee. BLBC meetings are held quarterly. The LDO of RBI and the DDM of
NABARD attend the meetings. The representatives of Panchayat Samitis are also
invited to attend the meetings at half yearly intervals.
District
Consultative Committee (DCC)
Constitution of
DCC
DCCs
were constituted for coordinating various activities under the Lead Bank
Scheme. The District Collector is the Chairman. RBI, NABARD, all the banks in
the district, various State Government
departments and allied agencies are the members of the DCC. The Lead District
Officer (LDO) represents the Reserve Bank as a member of the DCC. The LDM
convenes the DCC meetings. The Director of MSME-Development Institutes is an
invitee in districts where MSME clusters are located.
Conduct of DCC
Meetings
i) DCC meetings
should be convened at quarterly intervals.
ii)
Sub-committees
may be set up to work on specific issues and submit reports to the DCC for its
consideration.
iii)
DCC
should give feedback to the SLBC on issues that needs to be discussed on a
wider platform.
Agenda for DCC
Meetings
1
|
A Monitoring
mechanism to periodically assess and evaluate the progress
made to
provide banking services. Prepare district wise Financial Inclusion Plan
(FIP) for the three year period. The progress under FIP should be reviewed for
quarterly submission to SLBC.
|
2
|
Specific
issues inhibiting IT enabled financial inclusion and enabling it.
|
3
|
Facilitate
'enablers' and remove impeders of banking development.
|
4
|
Monitoring
initiatives on Financial Literacy Centres (FLCs) and RSETI type Training
Institutes for providing skills and capacity building to manage businesses.
|
5
|
Scaling up
financial literacy efforts.
|
6
|
Review of
performance under District Credit Plan (DCP)
|
7
|
Flow of credit
to priority sector and weaker sections of the society
|
8
|
Assistance
under Government sponsored schemes
|
9
|
Grant of
educational loans
|
10
|
Progress under
SHG - bank linkage
|
11
|
SME financing
& bottlenecks thereof, if any
|
12
|
Timely
submission of data by banks
|
13
|
Review
of relief measures
|
The
above list is not exhaustive. The lead banks may include any other agenda item
considered necessary.
Role of LDMs
The office of
LDM should be sufficiently strengthened. Officers of appropriate level and
attitude should be posted as LDMs. Apart from the usual role, the new functions
envisaged for LDMs include the following:
i)
Drawing
up and monitoring the road map for banking penetration
ii)
Monitoring
implementation of district credit plan
iii) Associate with
the setting up of Financial Literacy Centres (FLCs) and RSETIs by banks
iv) Associate with
organizing financial literacy camps by FLCs and rural branches of banks.
v)
Holding
annual sensitisation workshops for banks and Government officials with
participation by NGOs/Panchayati Raj Institutions (PRIs)
vi) Arranging for
quarterly awareness and feedback public meetings, grievance redressal, etc.
Quarterly Public
Meeting and Grievance Redressal
The
LDM should convene a quarterly public meeting in coordination with the LDO of
Reserve Bank, banks and other stakeholders to generate awareness, obtain
feedback from the public and provide grievance redressal or facilitate
approaching the appropriate machinery for such redressal.
District Level
Review Committee (DLRC) Meetings
DLRC meetings
are chaired by the District Collector and attended by members of the DCC. Local
MPs/MLAs/ Zilla Parishad Chiefs are also invited to these meetings. The DLRC
meetings should be convened at least once in a quarter. Review of the
programmes under Lead Bank Scheme is carried out in the meetings. Responses to
queries need to be attended to promptly. The follow up of DLRC’s decisions is to
be discussed in the DCC meetings.
DCC/DLRC
meetings- Annual Calendar of Meetings
Lead
banks have been advised to prepare an annual schedule of DCC and DLRC meetings for
all districts in consultation with the Chairperson of the meetings, lead
district officer of RBI and Public Representatives in case of DLRC and
circulate to all members.
State Level
Bankers’ Committee (SLBC)
Constitution of
SLBC
i) SLBC is chaired by the CMD/ED of the
Convenor bank. It comprises representatives of commercial banks, RRBs, State
Cooperative Banks, RBI, NABARD, heads of Government departments and
representatives of financial institutions operating in the State.
Representatives of various organizations like retail traders, exporters and
farmers’ union etc. are special invitees in SLBC meetings. SLBC meetings would
be convened by the Convenor bank.
ii)
Illustrative guidelines on the conduct of SLBC meetings have been issued.
Conduct of SLBC
Meetings
i) The SLBC
meetings are to be held at quarterly intervals. It is chaired by the CMD/ED of
the Convenor bank and co-chaired by Additional Chief Secretary or Development
Commissioner. High Level of participation ensure an effective and desired
outcome.
ii)
The
Chief Minister/Finance Minister and senior level officers of the State/RBI (of
the rank of Deputy Governor / Executive Director) may be invited. Chief
Ministers are encouraged to attend at least one SLBC meeting in a year.
iii)Steering Sub
Committee/Sub-Committees for specific tasks like agriculture, micro,
small/medium industries/enterprises, handloom finance, export promotion and
financial inclusion etc may be constituted. Such committees are expected to
meet more frequently than the SLBC.
iv)
The
secretariat of SLBC should be sufficiently strengthened.
v)
The
various fora at lower levels may give feedback to the SLBC on issues that need
to be discussed on a wider platform.
vi)
SLBCs
may invite academicians and researchers as 'special invitees' to attend SLBC
meetings occasionally both for adding value to the discussion and also associate
them for product formulation. Other 'special invitees' may be invited to attend
SLBC meetings depending on the agenda items/issues.
vii)
Bank's
linkage with NGOs/Corporate houses to ensure that the NGOs/corporates provide
the necessary 'credit plus' services.
Agenda for
SLBC Meetings
i.
Financial
inclusion - monitoring mechanism to assess and evaluate the progress made to
provide banking services. Compile and consolidate Financial inclusion Plan for
the three year period. The progress under FIP should be reviewed quarterly and
submitted to Reserve Bank.
ii.
The
specific issues inhibiting IT enabled
financial inclusion and enabling it.
iii. Issues to
facilitate 'enablers' and remove 'impeders' of banking development.
iv
Monitoring
initiatives for providing 'Credit Plus' activities by banks and setting up of
Financial Literacy Centres (FLCs) and RSETI type training institutes for
providing skills and capacity building to manage businesses
v.
Scaling
up financial literacy efforts to achieve financial inclusion.
vi.Review of performance of banks under
Annual Credit Plan (ACP)
vii.
Regional
imbalances in deployment of credit to various sectors of the economy
viii.
Credit
- Deposit Ratio of the State
ix.Flow of credit to priority sectors and
weaker sections of the society
x. Assistance under
Government sponsored schemes
xi. Grant of educational loans
xii.
Progress
under SHG - bank linkage
xiii. Discuss the problems faced by MSME
sector
xiv.
Steps
taken for improving land record and recovery mechanism
xv.Timely submission of data by banks
xvi.
Review
of relief measures
xvii.
Issues
remaining unresolved at the DCC/DLRC meetings
The above list
is not exhaustive. The Convenor may include any other agenda item considered
necessary.
Banking
Penetration
i)
SLBC
Convenor banks / lead banks are advised to focus attention on achieving 100%
financial inclusion. In addition to to the conventional brick and mortar
branches, such banking services can be provided through any of the various
forms of ICT-based models, including through BCs.
ii)
SLBC
Convenor should take up with the State Governments issues of road/digital
connectivity, conducive law and order situation, uninterrupted power supply and
adequate security etc. for ensuring banking expansion.
SLBC - Yearly
Calendar of Meetings
i) Convenor
banks are advised to prepare a yearly calendar of programme in the beginning of
the year itself. The calendar should clearly specify the cut off dates for data
submission and acceptance thereof by SLBC Convenor. The agenda should also be
circulated in advance. Following broad guidelines should be used for
preparation of the calendar of programmes:
Activity
|
To be
completed by
|
Preparation of
calendar of SLBC/UTLBC meetings and intimation to all
the concerned of the cut-off dates
for submission of
data and dates of meetings
as per the
dateline given below.
|
5th January every year
|
Reminder
regarding the exact date of meeting and submission of data by banks to SLBC
|
15 days before
end of the quarter
|
Dead line
for receipt of
information/data by SLBC
Convenor bank
|
15 days before
end of the quarter
|
Distribution
of agenda cum background papers
|
20 days from
the end of the quarter
|
Holding of the
meeting
|
Within 45 days
from the end of the quarter
|
Forwarding the
minutes of the
meeting to all stakeholders
|
Within 10 days
from holding the meeting
|
Follow-up of
the action points emerged from the meeting
|
To be
completed within 30 days of forwarding the minutes (for review in the next
meeting)
|
ii)SLBC Convenor banks have been advised to
give wide publicity to the annual calendar at the beginning of the year and
ensure that dates of senior functionaries expected to attend the meetings are
blocked for all meetings by their offices. In case the senior functionary is
not able to attend the meeting, the meeting should be held as planned in the
calendar.
SLBC Website –
Standardisation of information /data
Convenor banks
are to maintain the SLBC websites where all instructions pertaining to Lead
Bank Scheme and Government Sponsored Schemes are made available to the common
man. In order to standardize the information and data on SLBC website, an
indicative list of the information & data is given in the Annex II of the
master circular. The list is only indicative and SLBCs are free to put any additional
information.
Liaison with
State Government
Convenor banks
are expected to co-ordinate the activities of all banks in the State, discuss
with the State Government officials the operational problems in lending,
extending necessary support for banking development and to achieve the
objective of financial inclusion.
Capacity
Building/Training/Sensitization Programmes
i) In each
State, a full day sensitisation workshop may be convened by the SLBC Convenor in
April/May every year. Such sensitisation should form part of the probationary
training of such officers. Further, as soon as they are posted in a district,
the SLBC may arrange for exposure visits for the District Collectors to the
SLBC Convenor’s office for sensitisation and understanding of the Lead Bank Scheme.
ii) Staff of
banks and government agencies are to be aware of the latest developments and
emerging opportunities. There is need for staff sensitisation/
training/seminars, etc. at periodic intervals on an ongoing basis
Implementation
of Lead Bank Scheme
Preparation of
credit plans
Under LBS,
planning starts with identifying block/activity wise potential estimated for
various sectors.
Potential Linked
Credit Plans (PLPs)
i)
PLPs
take into account the long term physical potential, availability of
infrastructure support, marketing facilities, and policies/programmes of
Government etc.
ii)
A
pre-PLP meeting is convened by LDM during June every year to be attended by
banks, Government agencies, etc. They reflect their views and concerns and
deliberate on major financial and socio-economic developments in the district
in the last one year and priorities to be set out for inclusion in the PLP. DDM
of NABARD will make a presentation in this meeting outlining the major
requirements of information for preparing the PLP for the following year. The
preparation of PLP for the next year is to be completed by August every year to
enable the State Government to factor in the PLP projections.
iii)
The
procedure for preparing the District Credit Plan is as follows:
a)
Controlling
Offices of banks and DCCB/LDB will circulate the block/activity-wise potential
to all their branches for preparing the Branch Credit Plans (BCP).
b)
A
special BLBC meeting will be convened where the Branch Credit Plans will be
discussed and aggregated to form the Block Credit Plan. DDM and LDM will ensure
that the Plan is in tune with the identified potentials.
c)
All
the Block Credit Plans will be aggregated by LDM to form a District Credit
Plan. The Zonal/Controlling Offices of banks should take into account the
commitments made in the DCP.
d)
The
District Credit Plan will be placed before the DCC for final
acceptance/approval. All the District Credit Plans would be aggregated into a
State Level Credit Plan to be prepared by SLBC Convenor bank and launched by
1st of April every year.
Monitoring the
performance of credit plans
At
Block Level
|
Block
Level Bankers’ Committee (BLBC)
|
At
District Level
|
District
Consultative Committee (DCC) & District Level Review Committee (DLRC)
|
At
State Level
|
State
Level Bankers’ Committee (SLBC)
|
Monitoring of
LBS by RBI - Monitoring Information System (MIS)
i)
Annual
Credit Plans are prepared with the sub sectors Agriculture & allied
activities, Micro and Small Enterprises, Education, Housing and others under
priority sector and Medium Industries, Large industries, Education, Housing and
others in the non-priority sectors.
ii)
In
order to maintain consistency and integrity of data, the ACP and FIP data needs
to be grouped separately for scheduled commercial banks and other banks while
presenting in the DCC/SLBC meetings and submitting to regional offices. The
data of scheduled commercial banks needs to be further grouped into public
sector banks, private sector banks and Regional Rural Banks.
Assignment of
Lead Bank Responsibility
i)
Lead
Bank Scheme is administered by the RBI since 1969. As on June 30, 2015, 25
public sector banks and one private sector bank have been assigned lead bank
responsibility in 673 districts of the country.
ii)
As
on June 30, 2015, the SLBC/UTLBC convenorship of 29 States and 7 Union
Territories has been assigned to 16 public sector banks and one private sector
bank.
iii)
The Lead Bank Scheme (LBS) was extended to 16 districts of metropolitan areas
of Chennai (1), Delhi (11), Hyderabad (1), Kolkata (1) and Mumbai (2) during
2013-14 bringing the entire country under the fold of the Lead Bank Scheme.
Roadmap for opening
of banking outlets in unbanked villages
i)
In
November 2009, under Phase-I, guidelines for providing banking services in
villages with population more than 2000 was issued. Under Phase II, the roadmap
for villages with less than 2,000 population has been rolled out in June 2012
ii) SLBC convenor
banks have been advised to monitor the progress of Phase II. Keeping in view
the ongoing implementation of PMJDY, SLBC Convenors and lead banks have been
advised to complete the process of providing banking services under Phase II by
August 14, 2015.
Credit Deposit
Ratio
CD ratio of
banks in Rural and Semi-Urban Areas
Banks have been advised to achieve a
credit deposit ratio of 60% in respect of their rural and semi-urban branches
separately on an all-India basis. Banks should ensure that wide disparity in
the ratios between different States / Regions is avoided.
Implementation of the recommendations of
Expert Group on CD Ratio
i)
As per the recommendations of the expert group, the CD ratio of banks should be
monitored at different levels on the basis of the following parameters –
Institution /
Level
|
Indicator
|
Individual banks at Head Office
|
Cu + RIDF
|
State Level (SLBC)
|
Cu + RIDF
|
District Level
|
Cs
|
Where:
|
|
Cu = Credit as per place of Utilization
Cs = Credit as per place of Sanction
RIDF = Total Resource support provided
to States under RIDF
Further, banks are advised that:
·
In
the districts having CD ratio less than 40, Special Sub-Committees (SSCs) of
DCC may be set up to monitor the CD ratio.
·
Districts
having CD ratio between 40 and 60, will be monitored under the existing system
by DCC, and
·
The
district with CD ratio of less than 20 need to be treated on a special footing.
ii) The LDM is designated as the Convenor of the
SSC which will comprise of District co-ordinators of banks, LDO of RBI, DDM of
NABARD, District Planning Officer or a representative of the Collector duly
empowered to take decisions on behalf of the district administration.
The functions of
the Special Sub-Committees are as under:
·
The
SSCs will draw up Monitorable Action Plans (MAPs) for improving the CD ratio in
their districts.
·
SSC
will hold a special meeting immediately after its constitution and, set for
itself a target for increasing the CD ratio initially for the current year. It
will also set a definite time frame.
·
On
the completion of this process, the target and time frame will be placed before
the DCC for approval.
·
Take
up the plans for implementation and monitor the same assiduously once in two
months.
·
Report
the progress to the DCC quarterly and through them to the Convenor of SLBC.
·
Consolidated
report will be prepared and tabled at the SLBC meetings for discussion /
information.
iii)
Areas,
where the CD ratio less than 20, are generally located in hilly, desert,
inaccessible terrains and / or those dependent solely on the primary sector
and/ or characterized by a breakdown of the law and order machinery. In such
areas, conventional methods are not likely to work unless the banking system
and the State Government come together in a specially meaningful way.
iv) While the
framework for implementation for raising the CD ratio in these districts will
be the same as in the case of districts with CD ratio below 40, the focus and level
of efforts should be of a much higher scale.
For this,
·
All
such districts should first be placed in a special category.
·
The
responsibility for increasing CD ratio should be taken by banks and State
Governments and the districts should be "adopted" by the District
Administration and the lead bank jointly.
·
While
banks would be responsible for credit disbursement, the State Government would give
a commitment for creation of rural infrastructure and support banks to lend and
recover their dues.
·
Progress
will be monitored at the district level and reported to the corporate offices
of the concerned banks.
·
CMDs
of banks would give special attention to the CD ratio in such districts.
Direct
Benefit Transfer
Direct Benefit
Transfer (DBT) was rolled out by Government of India in selected districts
since January 2013. Banks have been advised to:
·
Complete
account opening and Aadhaar seeding in all the DBT districts.
·
Monitor
the progress in seeding of Aadhaar in bank accounts.
·
Provide
acknowledgement to the beneficiary of seeding request and also send aconfirmation.
·
form
DBT Implementation Co-ordination Committee, along with State Government
department concerned, at district level and review the seeding of Aadhaar
number in bank accounts.
·
ensure
that district and village wise details of BCs engaged and other arrangements
made by the bank is displayed on the SLBC website.
·
set
up a Complaint Grievance Redressal mechanism in each bank and nominate a
Complaint Redressal Officer in each district, to redress the grievances related
to ‘seeding of Aadhaar number in bank accounts'.
Service Area
Approach (SAA)
The
Service Area Approach scheme was reviewed in December 2004 and it was decided
to dispense with the restrictive provisions of the scheme while retaining the
positive features such as credit planning and monitoring of the credit
purveyance. Thus, while the commercial banks and RRBs are free to lend in any
rural and semi-urban area, the borrowers have the choice of approaching any
branch for their credit requirements except under Government Sponsored schemes.
Dispensing with
No Due Certificate
i)
Banks have been advised to dispense with obtaining ‘No Due Certificate’ from
the individual borrowers (including SHGs & JLGs) in rural and semi-urban
areas unless the Government Sponsored Scheme itself provides for obtention of
‘No Dues Certificate’. It is clarified that this policy is also applicable to
urban areas including metropolitan cities.
ii)
Banks
are encouraged to use an alternative framework of due diligence which could,
among others, consist of one or more of the following:
·
Credit
history check through credit information companies
·
Self-declaration
or an affidavit from the borrower
·
CERSAI
registration
·
Peer
monitoring
·
Information
sharing among lenders
·
Information
search (writing to other lenders with an auto deadline)
iii)
Banks
are also advised to submit information/data to all Credit Information Companies
(CICs).
Monitoring of
Financial Inclusion Plans (FIP) –State and District Level
i)
SLBC
Convenor banks have been advised to compile /consolidate State wise bank group
wise Financial Inclusion Plans for the 3 years and to review the progress in
SLBC meetings.
ii)
FIP
data needs to be grouped separately for scheduled commercial banks and other
banks while presenting in the DCC/SLBC meetings and submitting to regional
offices. The data of scheduled commercial banks needs to be further grouped
into public sector banks, private sector banks and Regional Rural Banks.
_________________________________________________________________________________
Based on RBI
Circular dt 1/07/15. Please visit www.rbi.org.in for any further clarification
if required….. Poppy