New Delhi: The Reserve Bank of India (RBI) on Friday released draft guidelines to revise the Lead Bank Scheme (LBS), aiming to streamline its operational framework and enhance the effectiveness of credit delivery and financial inclusion at the district level.
Originally introduced in 1969, the Lead Bank Scheme focuses on coordinating efforts among banks, government departments, and other developmental agencies to improve access to credit, particularly for priority sectors, and to promote inclusive economic growth.
According to the draft circular, the revised guidelines seek to fine-tune the scheme’s objectives by strengthening institutional mechanisms such as the structure, membership, and agenda of various forums under LBS. The proposals also clearly define the roles and responsibilities of key stakeholders while enhancing the functioning of State Level Bankers’ Committees (SLBCs) and Lead District Manager (LDM) offices.
Under the revised framework, the RBI will designate one commercial bank as the Lead Bank in each district. The Lead Bank will be responsible for coordinating with credit institutions, government authorities, and other stakeholders to improve credit flow and advance financial inclusion initiatives.
SLBC convenor banks will oversee coordination among banks at the state level and engage regularly with state government officials to address operational challenges in lending. These banks will also work with government departments to resolve infrastructure-related issues such as road and digital connectivity, power supply, law and order, and security arrangements to ensure wider banking coverage.
The draft emphasizes a bottom-up approach to credit planning, requiring banks to assess block-wise and activity-wise potential across sectors before preparing district credit plans.
The RBI also highlighted the importance of monitoring the Credit-Deposit (CD) Ratio, a key indicator of how effectively banks deploy deposits as credit within a region. Banks have been directed to maintain a minimum CD Ratio of 60 percent for their rural and semi-urban branches combined, on an all-India basis.
The central bank has invited public comments and stakeholder feedback on the draft guidelines, with the consultation period open until March 6, 2026.
