UPSC Prelims 2012 · Question 80 of 98
UPSC Prelims 2012 question on Lead Bank Scheme
- ExamUPSC CSE
- Year2012
- PaperGeneral Studies Paper I
- SubjectIndian Economy
- TopicBanking
- DifficultyEasy
- TypeDirect
The basic idea of Lead Bank Scheme is that
Show answer
Answer: C. Individual banks should adopt particular district for intensive development.
Verdict
Correct Answer: Individual banks should adopt particular district for intensive development
Analysis
The Lead Bank Scheme was introduced to promote district-level credit planning and financial inclusion.
Its main idea was to assign one bank as the lead bank for a district to coordinate banking and development activities.
1. Big banks should try to open offices in each district — Incorrect
Opening branches may be part of banking expansion, but this is not the core idea of the Lead Bank Scheme.
The main focus is district-level responsibility and credit planning.
2. Stiff competition among nationalized banks — Incorrect
The scheme promotes coordination, not competition.
The lead bank coordinates with other banks and government agencies in the district.
3. Individual banks should adopt particular district for intensive development — Correct
Under the scheme, a particular bank is assigned responsibility for a district.
It surveys the district, identifies credit gaps, prepares the District Credit Plan and helps expand credit to priority sectors.
4. Intensive efforts to mobilize deposits — Incorrect
Deposit mobilisation is a normal banking function.
The Lead Bank Scheme mainly focuses on credit deployment, rural development and financial inclusion.
Extra UPSC info
* Lead Bank Scheme was introduced by RBI in 1969.
* It was based on the recommendations of the Gadgil Study Group and Nariman Committee.
* The district is the basic unit of planning under the scheme.
* District Credit Plan is prepared to guide credit flow to priority sectors.
* District Consultative Committee coordinates banks and government agencies at district level.
* State Level Bankers’ Committee monitors implementation at the state level.
* Lead District Manager coordinates banking activities in the assigned district.
How to crack it
The Lead Bank Scheme means assigning individual banks to specific districts for intensive credit planning, coordination and development.