Module: General Practice
Q1: Consider the following statements regarding the Lead Bank Scheme (LBS):
1. The Lead Bank Scheme (LBS) aims to coordinate the activities of banks, government entities, and developmental agencies to improve credit flow to priority sectors at the district level.
2. The RBI recently released draft revised guidelines to streamline LBS operations, specifically focusing on strengthening the State Level Bankers' Committees (SLBCs) and Lead District Manager (LDM) offices.
3. Under the proposed guidelines, banks are directed to work toward achieving a Credit-Deposit (CD) ratio of 60% across rural and semi-urban branches.
4. Districts reporting a Credit-Deposit (CD) ratio between 40% and 60% will be placed under closer monitoring by the RBI to improve their credit performance.
Which of the above statements is/are correct?
2. The RBI recently released draft revised guidelines to streamline LBS operations, specifically focusing on strengthening the State Level Bankers' Committees (SLBCs) and Lead District Manager (LDM) offices.
3. Under the proposed guidelines, banks are directed to work toward achieving a Credit-Deposit (CD) ratio of 60% across rural and semi-urban branches.
4. Districts reporting a Credit-Deposit (CD) ratio between 40% and 60% will be placed under closer monitoring by the RBI to improve their credit performance.
Which of the above statements is/are correct?
✅ Correct Answer: D
🎯 Quick Answer:
All statements are correct. (Option D)Structural Breakdown: The LBS operates through various tiers of coordination.
At the state level, it utilizes the State Level Bankers' Committee (SLBC). At the district level, the Lead District Manager (LDM) spearheads the formulation and implementation of the District Credit Plan, ensuring a bottom-up approach to estimating block-wise lending potential.
Historical / Static Context: The scheme was introduced by the Reserve Bank of India in December 1969, following the recommendations of the Gadgil Study Group and the Nariman Committee, shortly after the nationalization of major banks in India.
The Dynamic Update (NEW) & Data: In February 2026, the RBI issued draft revised guidelines to revamp the LBS.
The qualitative update focuses on clarifying the roles of key functionaries and enhancing the structural efficiency of SLBCs and LDMs.
Specifically, the data points dictate that banks must target a 60% Credit-Deposit (CD) ratio across all rural and semi-urban branches.
Furthermore, any district failing to meet this benchmark, specifically those lingering in the 40% to 60% bracket, will be subjected to closer regulatory monitoring.
The deadline for stakeholder feedback on this draft is set for March 6, 2026.