- The Reserve Bank of India recently released a draft circular proposing revised guidelines for the Lead Bank Scheme (LBS) which was introduced in December 1969 based on the recommendations of the Nariman Committee and invited public comments.
- Aim: To ensure better coordination between banks and other development agencies so that institutional credit flows adequately to the priority sector, rural areas, and other key sectors of the economy.
- Under the scheme, one commercial bank in each district is designated as the Lead Bank, which is responsible for coordinating the activities of banks and government agencies operating in that district.
- To facilitate preparation and monitoring of District Credit Plans, the position of Lead Bank Officer (LBO) was created in 1979, which is now known as the Lead District Manager (LDM).
- The Lead Bank acts as the nodal institution for planning, monitoring, and reviewing credit deployment and developmental initiatives at the district level, ensuring that banking services contribute effectively to rural and overall economic development.
