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Informist, Friday, Feb. 13, 2026

 

--RBI issues draft circular on revised norms for Lead Bank Scheme

--RBI seeks comments on revised Lead Bank Scheme draft norms by Mar 6

 

MUMBAI – The Reserve Bank of India Friday issued a draft circular overhauling rules on the Lead Bank Scheme. It sought comments from the public on the draft by Mar. 6. RBI Governor Sanjay Malhotra had announced last week that the central bank would issue draft norms soon to streamline operations under the scheme.

 

"The revised guidelines aim to finetune the objectives of the Scheme; the structure, membership and agenda of various fora under the Scheme; clear delineation of roles and responsibilities of key functionaries; and provisions to further strengthen the State Level Bankers' Committee and Lead District Manager offices, among others," the central bank said in a release. The Lead Bank Scheme was introduced in 1969 to enhance priority sector lending and develop the rural sector.

 

In the draft norms, the RBI listed out lead banks for each district which will coordinate with credit institutions, the government and other stakeholders to improve credit flow. The lead bank must appoint a lead district manager to oversee the implementation of the scheme. The National Bank for Agriculture and Rural Development will appoint a district development manager to liason between the all India financial institution and the lead bank. The central bank will also appoint a representative for each district, it said in its proposal.

 

The various forums for discussions between stakeholders are the block level banker's committee at the base level, with the district consultative committee above it. The district level review committee will also be at the intermediate level to review the consultative committee, with a state level committee at the top of the Lead Bank Scheme, the draft norms said. NABARD's district development manager will draw up a potential linked credit plan for the district.

 

"Under LBS (Lead Bank Scheme), a bottom-up approach is envisaged for credit planning. Block wise/activity wise potential shall be estimated for various sectors, so as to prepare credit plans accordingly," the draft directions said.

 

At the state level, or Union territory level, bankers committee will be the apex forum under the lead bank scheme. The regulator assigned the committee various roles for monitoring and enforcement of the norms. It will comprise senior state government officials, the regional director of the RBI, state heads of NABARD as well as commercial banks with a major presence, a convenor and the head of the regional rural banks and state co-operative bank.

 

The chief minister of the state shall be requested to attend at least one meeting a year, the RBI proposed. The regulator put forward guidelines for the conduct of these meetings including inviting officials from other financial entities. The meetings should be held within 45 days from the end of the quarter, with advance notice on the calendar and agenda from the convenor bank. The apex committee will also have various sub-committees on micro-, small- and medium-enterprises and other priority sector, financial inclusion and literacy, agriculture and allied activities, digital payments, with one steering sub-committee of senior officials.

 

"Banks are required to achieve a CD (credit deposit) Ratio of 60 percent in respect of their rural and semi-urban branches, taken together on an All-India basis," the RBI said in the draft norms. The district consultative committee will monitor banks with ratios between 40% and 60%, stepping in to take action in districts where the ratio is below 40%. Districts with less than 20% of a credit-deposit ratio will be placed in a special category.

 

Convenor banks of the state level committees will identify all unbanked rural centres to encourage banks to open outlet there. The apex committee shall also expand and deepen the digital payments ecosystem, covering all districts of the state fully under the programme.  End

 

Reported by Aaryan Khanna

Edited by Akul Nishant Akhoury

 

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