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DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH
Name : MAJOR K.SIVA KUMAR
Designation : Head of Section
Branch :Commercial and Computer Practice
Institute : Government Polytechnic, Srikakulam
Year/Semester : V semester
Subject : Banking
Subject code : CCP 504(B)
Topic : Lead Banks and Merchant Banking
Duration : 50 min
Sub Topic : Lead Bank Scheme
Teaching Aids : PPT, Animation

CCP504(B).76 1
Implementation Of Lead Bank Scheme

Objectives:-

On Completion of this period, you would be able to :

 Understand the difficulties in implementing the Lead


Bank Scheme

CCP504(B).76 2
Recap

 Through nationalizations of Banks, Government


intended to develop the rural areas in our country.
 So RBI implemented the Lead Bank Scheme in
1969.
 The main objectives are Branch Expansion and
devising schemes, for developing the district and
 Tapping of unbanked areas.

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Recap

 But initially banks faced so many difficulties in


implementing scheme.

One of the difficulties were serious


misunderstanding about the purpose of surveying
the districts for branch expansion.

CCP504(B).76 4
Known To Unknown

1. What is the main purpose of Lead Bank Scheme ?


2. Say any one objective of Lead Bank Scheme ?
3. What are the functions of Lead Bank Scheme?
4. In which year it was implemented ?
5. Which committee recommended this scheme ?
6. Is there any benefit in the scheme ?

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Implementation of Lead Bank Scheme
Difficulties in implementation of Lead Bank
Scheme

 Criteria of contiguity of districts is not practicable.


 Some Regional Banks were allotted districts and states
where they had no base.
 Many of the Lead Banks could not develop the
‘personal feel’ for local problems.

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Implementation of Lead Bank Scheme

 Lack of knowledge of local language, difference in


customs and attitudes etc., is another difficulty.
 Supervision, control and guidance by the Head office
became difficult in such cases.
 The Banking Commission found that the Lead Banks
were not properly equipped to conduct the technical
and economic surveys in the districts allotted to
them.

CCP504(B).76 7
Implementation of Lead Bank Scheme

 Further Planning and banking functions were


separate
 Planning function lies with the State Government
and responsibility of implementing the schemes
rests with the Banks
 So, there was a gap between planning and
implementation of the Scheme

CCP504(B).76 8
Implementation of Lead Bank Scheme

 The Lead Bank is only a coordinating agency.


 It has no authority over the other departments to
get the necessary co-operation.
 Further, only improving banking facilities are not
enough to develop any district.

CCP504(B).76 9
Implementation of Lead Bank Scheme

 Other infrastructural facilities like Roads,


Transport etc. are also necessary to develop the
district.

 However, these problems were overcome over a


period of time.

CCP504(B).76 10
Summary

 Several problems were faced by Lead Banks in the


initial stages.
 They are not properly equipped to conduct the
surveys in the districts.
 Lead Banks have no authority over the other
departments to get any information.

CCP504(B).76 11
Summary

 Only Banking facilities are not enough to develop


the district.

 The Government has to provide infrastructural


facilities also to develop the district.

CCP504(B).76 12
Quiz
1. The Banks were not equipped properly to
conduct the following

• Social Surveys
• Legal Surveys
• Technical and Economic Surveys
• None

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Quiz
• Are Infrastructural facilities also necessary
to develop the district ?

a. Yes
b. No

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Quiz
• Lead Bank is only a

a. Coordinating agency
b. Social Organization
c. Bank
d. Office

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Quiz
• Planning for the district development lies
with

a. State Government
b. Banks
c. Offices
d. Private Organizations

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Questions

1. Write any four difficulties in implementing the


Lead Bank Scheme initially.

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