LBS was introduced in 1969 to improve the flow of credit to priority sectors and support rural development.
- It was formed based on the recommendation of D. R. Gadgilcommittee in 1969 because commercial banks did not have adequate presence in rural areas and also lacked the required rural orientation.
What are its features (Basics)?
- To deepen financial inclusion by improving access to and usage of formal financial services.
- Nariman Committee endorsed the idea of area approach in its report which led to formation of LBS.
- Private as well as Government banks are designated as lead banks by RBI.
- The entire country is now under the fold of the Lead Bank Scheme unlike previous exclusion of districts in metropolitan areas.
- State Level Bankers’ Committee (SLBC)/Union Territory Level Bankers’ Committee (UTLBC) coordinates the activities of the LBS.
- District Consultative Committee (DCC) under District Collector to coordinate activities under Lead Bank Scheme in each district.
New guidelines on Lead Bank Scheme (LBS) by RBI – Learn these for 2026 CSE Prelims
- Launching a unified portal for reporting of Bank-wise LBS data which is currently fragmented across various portals.
- New provisions to further strengthen the State Level Bankers’ Committee and Lead District Managers offices.
Source: The Hindu