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.

CCP504(B).76 3
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 ?

CCP504(B).76 5
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.

CCP504(B).76 6
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

CCP504(B).76 13
 Quiz
• Are Infrastructural facilities also necessary
to develop the district ?

a. Yes
b. No

CCP504(B).76 14
Quiz
• Lead Bank is only a

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

CCP504(B).76 15
 Quiz
• Planning for the district development lies
with

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

CCP504(B).76 16
Questions

1. Write any four difficulties in implementing the

Lead Bank Scheme initially.

CCP504(B).76 17