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 : 50mts
Sub topic : Lead Bank Scheme – present status of
lead bank scheme
Teaching Aids : PPT, Animation

CCP504(B).77 1
Present Status of Lead Bank Scheme

Objectives

On completion of this Topic, you would be able to :

 Understand the implementation of Lead Bank

Scheme.

CCP504(B).77 2
Recap

 Several problems were faced by Lead Banks in the

initial Stage to implement the lead bank scheme.

 They are not properly equipped to conduct the

surveys in the district.

CCP504(B).77 3
Recap

 Lead Banks have no authority over the other

departments to get any information.
 Only Banking facilities are not enough to develop
the district.
 The Government has to provide infrastructural
facilities also to develop the district.

CCP504(B).77 4
Questions for the Students

1. Say any one difficulty in implementing Lead Bank

Scheme.

3. Why Banks have faced difficulties in

implementing the Scheme ?

CCP504(B).77 5
Implementation of Lead Bank Scheme

 By 1973-74, the Lead Banks have completed their

surveys in 380 districts in the country.

 Some developmental schemes had been drawn up for

specific action on experimental basis.

CCP504(B).77 6
Implementation of Lead Bank Scheme

The Lead Banks have also constituted District Level

consultative committees to help in identifying bankable
schemes.
 These committees also help to evolve methods for
exchanging information about borrowers to lend priority
sectors etc.
Reserve Bank of India had set up a High Power
Committee (HPC) in March 1976 to watch the progress
of the lead bank scheme.
CCP504(B).77 7
Implementation of Lead Bank Scheme

 On the advice of the HPC, each Lead Bank has to

formulate District Credit Plans (DCPs) for a period
of 3 years.

 It has to prepare an Annual Action Plan (AAP) in

December every year.

 These plans would synchronize more or less with 5

year plans of the Government.

CCP504(B).77 8
Implementation of Lead Bank Scheme

 At the end of March,2002,the lead Bank scheme

covered 580 districts of the country.

 All the public sector Banks are actively involved in

the implementation of lead Banks scheme.

 The main focus of the lead Bank scheme is to

enhance the proportion of Bank Finance to the
priority sector.
CCP504(B).77 9
Implementation of Lead Bank Scheme

 The district Credit plans are to be comprehensive in

nature
 It should indicate credit targets for institutional
credit agencies in the district.

 The targets should be fixed on a Block-wise Sector-

wise, Scheme-wise and Bank-wise basis.

CCP504(B).77 10
Summary

 By 1973-74, lead banks completed their surveys in

380 districts

 On the basis of these surveys, development

schemes were devised

CCP504(B).77 11
Summary

 District level consultative committees were set up with all

the commercial Banks, other financial institutions and
government Officials in the districts.

 These committees help in exchanging information about

borrowers etc.

 High power Committee set up by RBI in 1976.

CCP504(B).77 12
Summary

 This committee recommended District Credit Plans

and Annual Action Plans to be formulated by Lead
Banks.

 These plans are helpful in fixing the targets for

various financial institutions in the district.

 These targets were based on Block-wise, Bank-wise,

Sector-wise etc.
CCP504(B).77 13
Quiz
1. District Credit Plans were formulated for a
period of

c. 3 years
d. 2 years
e. One year
f. None

CCP504(B).77 14
Quiz

1. Annual Action Plans were formulated

• Every Year
• 2 Years
• 5 Years
• 6 Year

CCP504(B).77 15
Quiz
1. Which Committees were set up Lead Banks ?

• District Co-operative Banks.

• District Level Consultative Committees
• Legal committees
• None

CCP504(B).77 16
Quiz
1. District Credit Plans are

a. Comprehensive
b. Intensive
c. Exclusive
d. None

CCP504(B).77 17