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Lead Bank Scheme (LBS)

Reserve Bank of India (RBI) has issued guidelines on the Lead Bank Scheme (LBS).

Who is a Lead Bank?

RBI designates a commercial bank as Lead Bank in each district, to coordinate the efforts of the banks, Government, National Bank for Agriculture and Rural Development (NABARD) and other stakeholders at the district level to improve credit flow to the priority sectors and promote financial inclusion in the district.

12 public sector banks and 2 private sector banks (Jammu & Kashmir Bank and ICICI Bank) have been assigned lead bank responsibilities, covering 778 districts across the country.

What appointments are made under the LBS?

  • Every lead bank shall appoint a Lead District Manager (LDM) in each district where it has the lead bank responsibility, to exclusively oversee and coordinate the implementation of the LBS in the district.
  • NABARD shall appoint a District Development Manager (DDM) for each district to act as a liaison between NABARD and the district-level banking and financial institutions in promoting rural credit, implementing financial inclusion initiatives, and supporting agricultural and rural development activities in the district.
  • RBI shall designate one of its officers as Lead District Officer (LDO) for each district. The LDO shall represent the RBI at the district level under the LBS.

What is the three-tier structure under the LBS?

  • The LBS shall function through a three-tier structure in each State / Union Territory (UT) –
    • Block Level Bankers’ Committee (BLBC) at the base level
    • District Consultative Committee (DCC) and District Level Review Committee (DLRC) at the intermediate level
    • State Level Bankers’ Committee (SLBC) / Union Territory Level Bankers’ Committee (UTLBC) at the apex level
  • Each of these fora shall broadly comprise banks, government agencies and other stakeholders.

What is Block Level Bankers’ Committee (BLBC)?

  • BLBC shall be constituted in each block of a district for coordination at the block level among banks, government and field level development agencies. 
  • BLBC shall prepare and review the implementation of the Block Credit Plan and resolve operational issues in the implementation of credit programmes at the block level.
  • LDM of the district shall convene and chair the BLBC. 
  • BLBC meetings shall be held on a quarterly basis. In the North-Eastern region, the meetings may be held at least twice per year, one for the half year ended September for finalising the Block Credit Plan, and the other for the half year ended March where the performance may be reviewed.
  • The conduct of BLBC meetings will be monitored by the DCC. 
  • BLBC may refer the issues that remain unresolved at the block level to the DCC for discussion on a wider platform.

What is District Consultative Committee (DCC)?

  • DCC shall be a forum for co-ordination at the district level to facilitate developmental activities under the LBS. 
  • DCC shall prepare and review the implementation of the District Credit Plan and resolve operational issues in its implementation.
  • The District Collector (DC) / District Magistrate (DM) shall be the Chairperson of the DCC.
  • DCC meetings shall be convened by the LDM at quarterly intervals.
  • At the DCC level, sub-committees as appropriate, may be set up to work intensively on specific issues and submit reports to the DCC for its consideration.
  • DCC should give feedback to the SLBC on issues that need to be discussed on a wider platform, so that they receive adequate attention at the state level.

What is District Level Review Committee (DLRC)?

  • The DLRC shall be a forum to devise workable solutions for enhancing flow of credit to deserving sectors, besides serving as a platform for public representatives to share their feedback. 
  • While the DCC shall serve as a coordination and implementation forum, the DLRC will be expected to serve as a review forum.
  • DLRC meetings shall be chaired by the DC / DM.
  • LDM shall be responsible for convening the DLRC meetings on a quarterly basis.
  • DLRC meetings should not be clubbed with DCC meetings. 
  • The follow-up of the DLRC’s decisions is required to be discussed in the DCC meetings.

What is State Level Bankers’ Committee (SLBC)?

  • RBI shall designate one commercial bank with significant presence in the State / UT as the SLBC Convenor Bank / UTLBC Convenor Bank.
  • SLBC Convenor Bank in each State / UT shall designate a General Manager of the bank as the SLBC Convenor. In case no General Manager level official is available, the Zonal Head of the Convenor Bank (not below the rank of DGM) may be designated as Convenor.
  • The SLBC shall be the apex inter-institutional forum to facilitate coordination in the efforts of the State Government, banks, financial institutions and other relevant stakeholders, for the development of the State. In Union Territories, the apex forum shall be called UTLBC.
  • The Chief Minister (CM) of the State shall be requested to attend at least one SLBC meeting in a year. 
  • SLBC Convenor shall convene SLBC meetings on a quarterly basis.
  • Meetings of the SLBC shall be co-chaired by Chairman / Managing Director / Executive Director of the Convenor Bank and Chief Secretary / Additional Chief Secretary / Principal Secretary of Finance (Head of Finance Department in State Government) / Development Commissioner of the State.
  • If Managing Director / Chief Executive Officer / Executive Director of the SLBC Convenor Bank is unable to attend SLBC Meetings, Regional Director / the State head of the RBI shall co-chair the meetings.
  • SLBC shall constitute the following sub-committees –
    • Steering Sub-Committee – to deliberate on agenda proposals from different stakeholders and finalise a compact agenda for the SLBC meetings
    • Sub-Committee on Agriculture and Allied Activities (SC-AA)
    • Sub-Committee on Micro Small and Medium Enterprises and Other Priority Sectors (SC-MSME & OPS)
    • Sub-Committee on Financial Inclusion and Financial Literacy (SC-FIFL)
    • Sub-Committee on Digital Payments (SC-DP)
    • Other sub-committees – depending on the specific issues to be addressed by the respective States

How much Credit Deposit (CD) Ratio shall be maintained? 

  • Banks are required to achieve a CD Ratio of 60% in respect of their rural and semi-urban branches, taken together on an all-India basis. 
  • Districts having CD Ratio between 40% and 60% shall be monitored by the DCC for improving the performance.
  • In districts having CD Ratio less than 40% and Annual Credit Plan (ACP) achievement less than 100% for the preceding financial year, Special Sub-Committees (SSCs) of the DCC, with LDM as Convenor shall be set up to monitor the CD Ratio.
  • Districts with CD Ratio less than 20% shall be placed in a special category and their progress shall be monitored by DCC.

What is the role of SLBC / UTLBC in increasing banking penetration?

  • SLBC Convenor Banks shall identify all unbanked rural centres (URCs) in the State and maintain an updated list of all such centres. The updated list should be displayed on the website of each SLBC to facilitate banks to choose / indicate the place / centre where they wish to open a ‘banking outlet’.
  • In order to comply with the criteria of opening at least 25% of total banking outlets in URCs in Tier 5 and 6 centres, banks should give priority to villages without a banking outlet having a population of more than 5000 (i.e., Tier 5 centres) and ensure that all such villages under their jurisdiction are covered with a CBS-enabled banking outlet on priority basis.
  • As regards Tier-6 centres, SLBC / UTLBC Convenor Banks shall monitor coverage of these URCs and advise lead banks to review the progress in the coverage of such centres in DCC meetings. Convenor Banks should also advise member banks to update the information on RBI’s Central Information System for Banking Infrastructure (CISBI) portal as and when banking outlets are opened in URCs.
  • SLBCs / UTLBCs shall put in place an action plan to achieve the goals identified under the National Strategy for Financial Inclusion (NSFI): 2025-30 during the period of the strategy, with suitable mid-term goals, and monitor progress on an on-going basis.

What is Service Area Approach (SAA)?

Under SAA, each bank branch in a rural or semi-urban area is designated to serve an area of 15 to 25 villages and the branch is responsible for meeting the bank credit needs of its service area. 

What is the programme on Expanding and Deepening of Digital Payments Ecosystem (EDDPE)?

The objective of the programme is to enable every individual in the identified districts to make / receive payments digitally in a safe, secure, quick, affordable, and convenient manner. SLBCs / UTLBCs shall cover all districts of the State fully under the programme.


References

Reserve Bank of India. (2026, June 19). 'Lead Bank Scheme'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13521&Mode=0

Reserve Bank of India. (2026, May 29). 'RBI Annual Report 2025-26 - IV. Credit Delivery and Financial Inclusion'. Retrieved from https://www.rbi.org.in/Scripts/AnnualReportPublications.aspx?Id=1464

Reserve Bank of India. (2026, June 19). 'RBI issues Circular on Lead Bank Scheme'. Retrieved from https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=62980


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