Master Circular – Lead Bank Scheme

RBI/2021-22/04
FIDD.CO.LBS.BC.No.02/02.01.001/2021-22

April 01, 2021

The Chairmen/ Managing Directors/ Chief Executive Officers
SLBC/ UTLBC Convenor Banks / Lead Banks

Madam/ Dear Sir,

MASTER CIRCULAR – Lead Bank Scheme

The Reserve Bank of India has issued a number of guidelines/instructions on Lead Bank Scheme from time to time. This Master Circular consolidates the relevant guidelines/ instructions issued by Reserve Bank of India on Lead Bank Scheme up to March 31, 2021 as listed in the Appendix.

2. This Master Circular has been placed on the RBI website https://www.rbi.org.in

Yours faithfully,

(Sonali Sen Gupta)
Chief General Manager-in-Charge

Encl.: As above

Structure

Introduction

(i) The genesis of the Lead Bank Scheme (LBS) can be traced to the Study Group headed by Prof. D. R. Gadgil (Gadgil Study Group) on the Organizational Framework for the Implementation of the Social Objectives, which submitted its report in October 1969. The Study Group drew attention to the fact that commercial banks did not have adequate presence in rural areas and also lacked the required rural orientation. The Study Group, therefore, recommended the adoption of an 'Area Approach' to evolve plans and programmes for the development of an adequate banking and credit structure in the rural areas.

(ii) A Committee of Bankers on Branch Expansion Programme of Public Sector Banks appointed by the Reserve Bank of India under the Chairmanship of Shri F. K. F. Nariman (Nariman Committee) endorsed the idea of an ‘Area Approach’ in its report (November 1969), recommending that in order to enable the Public Sector Banks to discharge their social responsibilities, each bank should concentrate on certain districts where it should act as a 'Lead Bank'.

(iii) Pursuant to the above recommendations, the Lead Bank Scheme was introduced by the Reserve Bank of India in December 1969.The Scheme aims at coordinating the activities of banks and other developmental agencies through various fora in order to achieve the objective of enhancing the flow of bank finance to the priority sector and other sectors and to promote banks' role in the overall development of the rural sector. For coordinating the activities in the district, a particular bank is assigned ‘Lead Bank’ responsibility of the district. The Lead Bank is expected to assume a leadership role for coordinating the efforts of the credit institutions and the Government.

(iv) In view of the several changes that had taken place in the financial sector, the Lead Bank Scheme was last reviewed by the High Level Committee headed by Smt. Usha Thorat, the then Deputy Governor of the Reserve Bank of India in 2009.

(v) The High Level Committee held wide ranging discussions with various stakeholders viz. State Governments, banks, development institutions, academicians, NGOs, MFIs etc. and noted that the Scheme has been useful in achieving its original objectives of improvement in branch expansion, deposit mobilisation and lending to the priority sector, especially in rural/semi urban areas. There was overwhelming consensus that the Scheme needs to continue. Based on the recommendations of the Committee, the guidelines were issued to SLBC Convenor banks and Lead Banks for implementation.

(vi) Envisaging greater role for private sector banks, Lead Banks were advised to ensure that private sector banks are more closely involved in the implementation of the Lead Bank Scheme. Private sector banks should involve themselves more actively by leveraging on Information Technology bringing in their expertise in strategic planning. They should also involve themselves in the preparation as well as implementation of the District Credit Plan.

(vii) In view of the changes that have taken place in the financial sector over the years, the Reserve Bank of India had constituted a “Committee of Executive Directors” of the Bank to study the efficacy of the Scheme and suggest measures for its improvement. Based on the Committee’s recommendations and feedback received from various stakeholders, certain ‘action points’ were issued to SLBC Convenors/Lead Banks and NABARD on April 6, 2018.

2. Fora under Lead Bank Scheme

2.1 Block Level Bankers’ Committee (BLBC)

Block Level Bankers’ Committee (BLBC) is a forum for achieving coordination between credit institutions and field level development agencies at the block level. The forum prepares and reviews the implementation of the Block Credit Plan and also resolves operational problems in the implementation of the credit programmes of banks. The Lead District Manager (LDM) of the district is the Chairman of the Block Level Bankers’ Committee. All the banks operating in the block including the Small Finance Banks, Wholly Owned Subsidiaries (WOS) of Foreign Banks, RRBs, the District Central Co-operative Banks, Block Development Officer, technical officers in the block, such as extension officers for agriculture, industries and co-operatives are members of the Committee. BLBC meetings are held at quarterly intervals. To strengthen the BLBC forum which operates at the base level of the Lead Bank Scheme, it is necessary that all branch managers attend BLBC meetings and enrich the discussions with their valuable inputs. Controlling Heads of banks may also attend a few of the BLBC meetings selectively. Participation by the District Development Manager (DDM) of NABARD in BLBCs would ensure better and more meaningful discussions for the development of the Block. Therefore, NABARD has been advised that DDMs should attend all Block Level Bankers’ Committee meetings in their district and actively participate in the credit planning exercise and review meetings at the block level. The Lead District Officer (LDO) of the Reserve Bank of India (RBI) selectively attends the BLBC meetings. The representatives of Panchayat Samitis are also invited to attend the meetings at half yearly intervals so as to share their knowledge and experience on rural development in the credit planning exercise. Payments Banks should also be invited to attend the meetings.

2.2 District Consultative Committee (DCC)

2.2.1 Constitution of DCC

The District Consultative Committees were constituted in the early seventies as a common forum at the district level for bankers as well as Government agencies/departments to facilitate coordination in implementing various developmental activities under the Lead Bank Scheme. The District Collector is the Chairman of the DCC meetings. Reserve Bank of India, NABARD, all the commercial banks including Small Finance Banks, Wholly Owned Subsidiaries (WOS) of Foreign Banks, RRBs, Payments Banks, Co-operative banks including the District Central Cooperative Bank (DCCB), various State Government departments and allied agencies are the members of the DCC. The Lead District Officer (LDO) represents the Reserve Bank as a member of the DCC. The Lead District Manager (LDM) convenes the DCC meetings. The Director of Micro, Small and Medium Enterprises Development Institute (MSME-DI) in the district is an invitee in districts where MSME clusters are located to discuss issues concerning MSMEs.

2.2.2 Conduct of DCC Meetings

1. DCC meetings should be convened by the Lead Banks at quarterly intervals.

2. At the DCC level, sub-committees as appropriate, may be set up to work intensively on specific issues and submit reports to the DCC for its consideration.

3. DCC should give adequate feedback to the SLBC on various issues that need to be discussed on a wider platform, so that these receive adequate attention at the State Level.

2.2.3 Agenda for DCC Meetings

While Lead Banks are expected to address the problems particular to the concerned districts, some of the important areas which are common to all districts which the lead banks should invariably discuss in the fora are as under:

1. Review of progress under Financial Inclusion Plan (FIP).

2. The specific issues inhibiting and enabling IT enabled financial inclusion

3. Issues to facilitate 'enablers' and remove/minimise 'impeders' for banking development for inclusive growth

4. Monitoring initiatives for providing 'Credit Plus' activities by banks and State Governments such as setting up of Financial Literacy Centres (FLCs) and RSETI# type Training Institutes for providing skills and capacity building to manage businesses.

5. Scaling up financial literacy efforts to achieve financial inclusion.

6. Review of performance of banks under District Credit Plan (DCP)

7. Flow of credit to priority sector and weaker sections of the society

8. Doubling of Farmers’ Income by 2022

9. Assistance under Government sponsored schemes

10. Grant of educational loans

11. Progress under SHG - bank linkage

12. SME financing & bottlenecks thereof, if any

13. Timely submission of data by banks

14. Review of relief measures (in case of natural calamities wherever applicable)

The above list is illustrative and not exhaustive. The Lead Banks may include any other agenda item considered necessary.

# Rural Self Employment Training Institutes (RSETIs) should be more actively involved and monitored at various fora of LBS particularly at the DCC level. Focus should be on development of skills to enhance the credit absorption capacity in the area and renewing the training programmes towards sustainable micro enterprises. RSETIs should design specific programmes for each district/ block, keeping in view the skill mapping and the potential of the region for necessary skill training and skill up gradation of the rural youth in the district.

2.2.4 Role of LDMs

As the effectiveness of the Lead Bank Scheme depends on the dynamism of the District Collectors and the Lead District Managers (LDMs), with supportive role of the Regional/Zonal Office, the office of LDM should be sufficiently strengthened with appropriate infrastructural support being the focal point for the successful implementation of the Lead Bank Scheme. Apart from the provision of a separate office space, technical infrastructure like computers, printer, data connectivity, etc. which are basic necessities for LDMs to discharge their core responsibilities may be provided to LDMs’ Office without exception. Officers of appropriate level, attitude and possessing requisite leadership skills should be posted as LDMs. Additionally, it is suggested that a dedicated vehicle may be provided to LDMs’ to facilitate closer liaison with the bank officials, district administration officials as also to organise/ attend various financial literacy initiatives and meetings. The absence of a specialist officer/assistant for data entry/analysis is a common and major issue faced by LDMs. Liberty to hire the services of skilled computer operator may be given to the LDMs to overcome the shortage of staff/ in case appropriate staff is not posted at LDM office. Further, for successful functioning of the Lead Bank Scheme, we expect Lead Banks to go the extra mile to provide facilities over and above the bare minimum to these critical field functionaries. Apart from the usual role of LDMs like convening meetings of the DCC/DLRC and periodical meetings of DDM/ LDO/ Government officials for resolving outstanding issues etc., the new functions envisaged for LDMs include the following:

1. Monitoring the implementation of the District Credit Plan

2. Associate with the setting up of Financial Literacy Centres (FLCs), RSETIs by banks

3. Associate with organizing financial literacy camps by FLCs and rural branches of banks.

4. Holding annual sensitisation workshops for banks and Government officials with participation by NGOs/Panchayati Raj Institutions (PRIs)

5. Arranging for quarterly awareness and feedback public meetings, grievance redressal etc.

2.2.5 Quarterly Public Meeting and Grievance Redressal

The Lead District Manager should convene a quarterly public meeting at various locations in the district in coordination with the LDO of Reserve Bank, banks having presence in the area and other stakeholders to generate awareness of the various banking policies and regulations relating to the common person, obtain feedback from the public and provide grievance redressal to the extent possible at such meetings or facilitate approaching the appropriate machinery for such redressal.

2.2.6 District Level Review Committee (DLRC) Meetings

DLRC meetings are Chaired by the District Collector and attended by members of the District Consultative Committee (DCC). Public Representatives i.e. Local MPs/MLAs/ Zilla Parishad Chiefs are also invited to these meetings. The DLRC meetings should be convened by the Lead Banks at least once in a quarter. The DLRC is a forum to review the pace and quality of the implementation of various programmes under the Lead Bank Scheme in the district. Hence, association of non-officials is considered useful. Lead Banks are required to ensure the presence of public representatives in DLRC meetings as far as possible. Therefore, Lead Banks should fix the date of DLRC meetings with due regard to the convenience of the representatives of the public i.e. MPs/MLAs etc. and invite and involve them in all functions conducted by the banks in the districts, such as opening of new banking outlets, distribution of Kisan Credit Cards, SHG credit linkage programmes, etc. Responses to queries from public representatives need to be accorded highest priority and attended to promptly. The follow up of the DLRC’s decisions is required to be discussed in the DCC meetings.

2.2.7 DCC/DLRC meetings- Annual Calendar of Meetings

i) DCC and DLRC are the important fora facilitating coordination among commercial banks, Government agencies and others at the district level to review and find solutions to the problems hindering developmental activities. Therefore, it is necessary that all the members participate and deliberate in these meetings. On a review of the DCC/DLRC meetings, it was observed that late receipt/non-receipt of intimation of the date of meetings, clash of dates with other events, commonality of dates etc., hinder participation of members in these meetings, thus undermining the prime objective of conducting the above meetings.

ii) Lead Banks have, therefore, been advised to prepare an Annual Schedule of DCC and DLRC meetings on Calendar year basis for all districts in consultation with the Chairperson of the meetings, Lead District Officer of the RBI and Public Representatives in case of DLRC. This yearly Calendar should be prepared in the beginning of each year and circulated to all members as advance intimation for blocking future dates to attend the DCC and DLRC meetings and the meetings should be conducted as per the calendar. While preparing the Calendar, it should be ensured that DCC and DLRC meetings are not held simultaneously.

2.3 State Level Bankers’ Committee (SLBC)

2.3.1 Constitution of SLBC

i) The State Level Bankers’ Committee (SLBC) was constituted in April 1977, as an apex inter-institutional forum to create adequate coordination machinery in all States, on a uniform basis for development of the State. SLBC is chaired by the Chairman/ Managing Director/ Executive Director of the Convenor Bank. It comprises representatives of commercial banks including Small Finance Banks, Wholly Owned Subsidiaries (WOS) of Foreign Banks, RRBs, Payments Banks, State Cooperative Banks, RBI, NABARD, heads of Government departments including representatives from National Commission for Scheduled Castes/Tribes, National Horticulture Board, Khadi & Village Industries Commission etc. and representatives of financial institutions operating in a State, who come together and sort out coordination problems at the policy implementation level. Representatives of various organizations from different sectors of the economy like industry bodies, retail traders, exporters, farmers’ unions, etc. are special invitees in the SLBC meetings for discussing their specific problems, if any. SLBC meetings are held on quarterly basis. The responsibility for convening the SLBC meetings would be of the SLBC Convenor Bank of the State.

ii) Recognising that SLBCs, primarily as a committee of bankers at the State level, play an important role in the development of the State, illustrative guidelines on the conduct of State Level Bankers’ Committee meetings have been issued.

2.3.2 Conduct of SLBC Meetings

i) SLBC meetings are required to be held regularly at quarterly intervals. The meetings are chaired by the Chairman/ Managing Director/ Executive Director of the Convenor Bank and co-chaired by the Additional Chief Secretary or Development Commissioner of the State concerned. In cases where the Managing Director/Chief Executive Officer/Executive Director of the SLBC Convenor Bank is unable to attend SLBC Meetings, the Regional Director of the RBI shall co-chair the meetings along with the Additional Chief Secretary/Development Commissioner of the State concerned. A High Level of participation in SLBC/UTLBC meetings ensures an effective and desired outcome with meaningful discussion on issues of public policy of both the Government of India and the Reserve Bank of India.

ii) The Chief Minister/Finance Minister and senior level officers of the State/RBI (of the rank of Deputy Governor / Executive Director) may be invited to attend the SLBC meetings. Further, the State Chief Ministers are encouraged to attend at least one SLBC meeting in a year.

iii) State Level Bankers’ Committee meetings should primarily focus on policy issues with participation of only the senior functionaries of the banks/ Government Departments. All routine issues may be delegated to sub-committee(s) of the SLBC. A Steering Sub-committee may be constituted in the SLBC to deliberate on agenda proposals from different stakeholders and finalise a compact agenda for the SLBC meetings. Typically, the Sub-Committee could consist of SLBC Convenor, RBI & NABARD representatives & senior State Government representative from the concerned department, e.g. Finance/ Institutional Finance and two to three banks having major presence.

iv) Other issue-specific sub-committees may be constituted as required. The sub committees may examine the specific issues relating to agriculture, micro, small/medium industries/enterprises, handloom finance, export promotion and financial inclusion, etc. in-depth and devise solutions/recommendations for adoption by the full committee. They are expected to meet more frequently than the SLBC. The composition of the sub-committees and subjects/ specific issues impeding/enabling financial inclusion to be deliberated upon, may vary from State to State depending on the specific problems/issues faced by the States.

v) The secretariat/offices of the SLBC should be sufficiently strengthened to enable the SLBC Convenor Bank to effectively discharge its functions.

vi) The various fora at lower levels may give adequate feedback to the SLBC on issues that need to be discussed on a wider platform.

vii) Several institutions and academicians are engaged in research, studies etc. that have implications for sustainable development in agriculture and MSME sector. Engaging with such research institutions and academicians would be useful in bringing in new ideas for furthering the objectives of the Lead Bank Scheme. The SLBCs may, therefore, identify such academicians and researchers and invite them as 'special invitees' to attend SLBC meetings occasionally both for adding value to the discussions and also associate them with studies appropriate to the State. Other 'special invitees' may be invited to attend SLBC meetings depending on the agenda items/issues to be discussed in the meetings.

viii) The activities of NGOs in facilitating and channelling credit to the low income households are expected to increase in the coming years. Several corporate houses are also engaged in corporate social responsibility activities for sustainable development. A linkage with such NGOs/Corporate houses operating in the area to ensure that the NGOs/corporates provide the necessary 'credit plus' services can help leverage bank credit for inclusive growth. Success stories could be presented in SLBC meetings to serve as models that could be replicated.

2.3.3 Revised Agenda for SLBC Meetings

1. Review of financial inclusion initiatives, expansion of banking network and Financial Literacy:

1. Status of opening of banking outlets in unbanked villages, CBS-enabled banking outlets at the unbanked rural centres (URCs)

2. Review of Operations of Business Correspondents – hurdles/issues involved

3. Progress in increasing digital modes of payment in the State, provision of continuous connectivity with sufficient bandwidth, resolving connectivity issues/ connectivity options (Bharat Net, VSAT, etc.), installation of ATMs and PoS machines and status of implementation of e-receipts and e-payments in the State

4. Status of rollout of Direct Benefit Transfer in the State, Aadhaar seeding and authentication

5. Review of inclusion of Financial Education in the School Curriculum, financial literacy initiatives by banks (particularly digital financial literacy)

6. Creating awareness about various schemes, subsidies, facilities e.g. crop insurance, renewable energy

7. Review of efforts towards end to end projects involving all stakeholders in the supply chain.

2. Review of credit disbursement by banks:

1. Achievement under ACP of the State, Priority Sector Lending

2. Discussion on lending towards government sponsored schemes (DAY-NRLM, DAY-NULM, MUDRA, Stand-Up India, PMEGP, etc.) and impact of these schemes

3. Flow of credit to MSMEs and for affordable housing

4. KCC loan, crop insurance under PMFBY

5. Grant of Education Loans

6. Progress under SHG-bank linkage.

3. Doubling of Farmers’ Income by 2022.

4. CD Ratio, Review of Districts with CD Ratio below 40% and working of Special Sub-Committees of the DCC (SSC).

5. Position of NPAs in respect of schematic lending, Certificate Cases and Recovery of NPAs.

6. Review of restructuring of loans in natural calamity affected districts in the State, if any.

7. Discussion on policy initiatives of the Central/State Government/RBI (Industrial Policy, MSME Policy, Agriculture Policy, Start-Up Policy, etc.), and expected involvement of banks.

8. Discussion on improving rural infrastructure/ credit absorption capacity:

1. Any large project conceived by the State Government to help improve C-D Ratio

2. Explore the scope of state-specific potential growth areas and the way forward – choosing partner banks

3. Discussion on findings of region-focused studies, if any, and implementing the suggested solutions

4. Identification of gaps in rural and agriculture infrastructure which need financing (rural godowns, solar power, agro processing, horticulture, allied activities, agri-marketing etc.)

5. Implementation of Model Land Leasing Act 2016 (exploring possibility).

9. Efforts towards skill development on mission mode partnering with Krishi Vigyan Kendra (KVK), Horticulture Mission, National Skill Development Corporation, Agriculture Skill Council of India (ASCI), etc. including a review of functioning of RSETIs.

10. Steps taken for improving land record, progress in digitization of land records and seamless loan disbursements.

11. Sharing of success stories and new initiatives at the district level that can be replicated in other districts or across the State.

12. Discussion on Market Intelligence Issues e.g.:

1. Ponzi Schemes/ Illegal Activities of Unincorporated Bodies/ Firms/ Companies Soliciting Deposits from the Public

2. Banking Related Cyber Frauds, phishing, etc.

3. Instances of usurious activities by lending entities in the area, cases of over indebtedness

4. Credit related frauds by borrower groups, etc.

13. Issues remaining unresolved at DCC/DLRC meeting.

14. Timely submission of data by banks, adhering to the schedule of SLBC meeting.

15. Any other item, with the permission of the Chair.

The above list is illustrative and not exhaustive. SLBC Convenor Banks may include any other agenda item considered necessary.

2.3.4 SLBC - Yearly Calendar of Meetings

i) To improve the effectiveness and streamline the functioning of SLBC/UTLBC meetings, SLBC Convenor Banks have been advised to prepare a yearly calendar of programmes (calendar year basis) in the beginning of the year itself, for conducting the meetings. The calendar of programmes should clearly specify the cut off dates for data submission to SLBC and acceptance thereof by the SLBC Convenor. This yearly calendar should be circulated to all the concerned as an advance intimation for blocking of future dates of senior functionaries of various agencies like Central Government, State Governments, banks, RBI, etc. The SLBC/UTLBC meetings should be conducted as per the calendar under all circumstances. The agenda should also be circulated in advance without waiting for the data from defaulting banks. The matter should, however, be taken up with the defaulting banks in the SLBC meeting. In addition, the SLBC Convenor Bank should write a letter in this regard to the controlling office of the defaulting banks under advice to the Regional Office of RBI. The SLBC Convenor Bank will, however, continue to follow-up with banks for timely data submission. Further, in case the Chief Minister, Finance Minister or other very senior functionaries are not able to attend the SLBC on some very rare occasion, then if so desired by them, a special SLBC meeting can be held. Following broad guidelines should be used for preparation of the calendar of programmes:

ii) The objective of preparing the calendar of meetings in the beginning of the year is to ensure adequate notice of these meetings and timely compilation and dispatch of agenda papers to all stakeholders. It also ensures clear cut guidelines for the submission of data to SLBC Convenors by participating banks & Government Departments. It is expected to save precious time of SLBC Convenors otherwise spent in taking dates from various senior functionaries attending these SLBC meetings.

iii) SLBC Convenor Banks need to appreciate the advantages of ensuring adherence to the yearly calendars. SLBC Convenor Banks have therefore been advised to give wide publicity to the annual calendar at the beginning of the year and ensure that dates of senior functionaries expected to attend the meetings are blocked for all meetings by their offices. In case, despite blocking dates, if for some reason, the senior functionary is not able to attend the meeting, the meeting should be held as planned in the calendar. More importantly, the data for review in these meetings should be received as per deadlines set in the calendar and those who do not submit the data in time should be asked to explain the reasons for delay in sending the data that may be recorded in the minutes of the meeting. Under no circumstance, should the preparation of the agenda be delayed beyond the dates stipulated as per the calendar.

2.3.5 SLBC Website – Standardisation of information /data

SLBC Convenor Banks are required to maintain the SLBC websites where all instructions pertaining to LBS and Government Sponsored Schemes are made available and are accessible to the common man desiring any information relating to the conduct of meetings or State-wise data/bank-wise performance. In order to standardize the information and data that is to be made available on the SLBC website, an indicative list of the information & data is given in the Annex II. SLBCs should arrange to place the prescribed minimum information on the websites of SLBCs of their bank and keep it updated regularly, at least on quarterly basis. Banks may note that the list is only indicative and SLBCs are free to put any additional information considered relevant for the State.

2.3.6 Liaison with State Government

SLBC Convenor Banks are expected to co-ordinate the activities of all banks in the State, discuss with State Government officials, the operational problems in lending, extending necessary support for banking development and to achieve the objective of financial inclusion.

2.3.7 Capacity Building/Training/Sensitization Programmes

i) There is a need for sensitising the District Collectors and CEOs of Zilla Parishads on banks and banking in general as also on the specific scope and role of the Lead Bank Scheme. In each State, a full day ‘Sensitisation Workshop’ may be convened by the SLBC Convenor Bank every year, preferably in April/May. Such sensitisation should form part of the probationary training of such officers. Further, as soon as they are posted in a district, the SLBC may arrange for exposure visits for the District Collectors to the SLBC Convenor’s office for sensitisation and understanding of the Lead Bank Scheme.

ii) Staff at the operational level of banks and government agencies associated with implementation of the Lead Bank Scheme need to be aware of the latest developments and emerging opportunities. There is need for staff sensitisation/ training/seminars, etc. at periodic intervals on an ongoing basis.

3. Implementation of Lead Bank Scheme

3.1 Preparation of credit plans

Planning plays an important role in the implementation of the Lead Bank Scheme and a bottom-up approach is adopted to map the existing potential for development. Under LBS, planning starts with identifying block-wise/ activity-wise potential estimated for various sectors.

3.2 Potential Linked Credit Plans (PLPs)

i) Potential Linked Credit Plans (PLPs) are a step towards decentralized credit planning with the basic objective of mapping the existing potential for development through bank credit. PLPs take into account the long term physical potential, availability of infrastructure support, marketing facilities, and policies/programmes of Government etc. NABARD to take measures to ensure that PLPs should be more focussed and implementable so that banks can utilize them more gainfully while preparing the Branch Credit Plan. PLPs should emphasise on promotion of sustainable agricultural practices suitable to local conditions. While preparing the PLPs, the focus must be on identifying processes and projects that:

1. reduce the carbon foot-print,

2. prevent the overuse of fertilizers,

3. ensure efficient utilisation of water and

4. address agricultural pollution issues.

The plans must also focus on promoting innovative farming systems such as organic farming, bio dynamic farming, permaculture and sustainable small-scale farming, as also promoting Farmer Producer Organisations (FPOs) and Farmers’ Markets. Such initiatives must be supported by appropriate investments and project finance frameworks.

ii) A pre-PLP meeting is convened by LDM during June every year to be attended by banks, Government agencies, etc., to reflect their views and concerns regarding credit potential (sector/activity-wise) and deliberate on major financial and socio-economic developments in the district in the last one year and priorities to be set out for inclusion in the PLP. The DDM of NABARD makes a presentation in this meeting outlining the major requirements of information for preparing the PLP for the following year. The preparation of PLP for the next year is to be completed by August every year to enable the State Government to factor in the PLP projections.

iii) The procedure for preparing the District Credit Plan is as follows:

1. Controlling Offices of commercial banks including Small Finance Banks, Wholly Owned Subsidiaries (WOS) of Foreign Banks and Head Office of RRB and DCCB/LDB circulate the accepted block-wise/activity-wise potential to all their branches for preparing the Branch Credit Plans (BCP) by their respective branch managers. Banks should ensure that the exercise of preparation of branch/block plans is completed in time by all branches so that the Credit Plans become operational on time.

2. A special Block Level Bankers' Committee (BLBC) meeting is convened for each block where the Branch Credit Plans are discussed and aggregated to form the Block Credit Plan. The DDM and the LDM guide the BLBC in finalizing the plan, ensuring that the Block Credit Plan is in tune with the potentials identified activity-wise including in respect of Government Sponsored Schemes.

3. All the Block Credit Plans of the district are aggregated by the LDM to form the District Credit Plan (DCP). This plan indicates an analytical assessment of the credit needs of the district to be deployed by all the financial institutions operating in the district and the total quantum of funds to be earmarked as credit by all the financial institutions for a new financial year. The Zonal/Controlling Offices of banks, while finalizing their business plans for the year, should take into account the commitments made in the DCP which should be ready well in time before the performance budgets are finalized.

4. The District Credit Plan is then placed before the DCC by the Lead District Manager for final acceptance/approval. All the District Credit Plans are eventually aggregated into a State Level Credit Plan to be prepared by SLBC Convenor Bank and launched by the 1st of April every year.

5. The corporate business targets for branches, blocks, districts and states may be aligned with the Annual Credit Plans (ACP) to ensure better implementation. The Controlling Offices of the banks in each state should synchronize their internal business plans with the ACP.

3.3 Monitoring the Performance of Credit Plans

The performance of the credit plans is reviewed in the various fora created under the Lead Bank Scheme as shown below:

Monitoring of LBS by RBI - Monitoring Information System (MIS)

i) Data on Annual Credit Plan (ACP) is an important element to review the flow of credit in the State. ACP formats are aligned with the extant reporting guidelines on priority sector lending. Accordingly, the ACP is to be prepared considering the categories of priority sector that would include Agriculture, Micro, Small and Medium Enterprises, Export Credit, Education, Housing, Social Infrastructure, Renewable Energy and Others. Further, it has been decided that bank loans to Micro/Small and Medium Enterprises (Services), engaged in providing or rendering of services as defined in terms of investment in equipment under MSMED Act, 2006, shall qualify under priority sector without any credit cap. The reporting statement for ACP target is LBS-MIS-I (Annex IV), statement for disbursement and outstanding LBS-MIS-II (Annex V) and ACP achievement vis-à-vis ACP target, LBS-MIS-III (Annex VI). SLBC Convenor Banks/ Lead Banks have been advised to prepare the statements LBS MIS I, II and III as per the revised formats starting from the financial year 2018-19. They should prepare the bank group wise statements of LBS-MIS-I, II and III as per the prescribed formats and also place these statements for meaningful review in all DCC and SLBC meetings.

ii) In order to maintain consistency and integrity of data with the All-India data of scheduled commercial banks and facilitate a meaningful review/analysis of data, the ACP data needs to be grouped separately for scheduled commercial banks and other banks like State Cooperative Banks, DCCBs, etc. while presenting in the DCC/SLBC meetings and submitting to our Regional Offices. The data pertaining to scheduled commercial banks needs to be further grouped into public sector banks, private sector banks, Regional Rural Banks, Small Finance Banks and Wholly Owned Subsidiaries (WOS) of Foreign Banks to know the bank group wise position.

3.4 Revised mechanism of Data Flow for LBS fora meetings

At present, discussions at the quarterly meetings of the various LBS fora viz. State Level Bankers’ Committee (SLBC), District level Consultative Committee (DCC) and Block Level Bankers’ Committee (BLBC) primarily focus on the performance of banks in the disbursement of loans vis-a-vis the allocated target under the Annual Credit Plan. The integrity & timeliness of the data submitted by banks for the purpose has been an issue as a significant portion of this data is manually compiled and entered into the Data Management Systems of the SLBC Convenor Banks. The extent to which this data corresponds with the data present in the Core Banking Solution (CBS) of the respective banks also varies significantly. Therefore, there is need of a standardized system to be developed on the website maintained by each SLBC to enable uploading and downloading of the data pertaining to the Block, District as well as the State. The relevant data must also be directly downloadable from the CBS and/ or MIS of the banks with a view to keeping manual intervention to a minimal level in the process. The procedure relating to the envisaged intervention in this area is given below:

Management of Data Flow at LBS Fora – Procedure

1. Each bank’s CBS should have a provision to generate a report pertaining to all LBS related data/ tables to Excel. This data should have information pertaining to all the branches operating in the state including fields/ columns for District & Block name. Access to Download & Export this data from the bank’s CBS should be given to the Controlling Offices of the banks who would be solely responsible for the process of ‘Data Feeding’ for all districts/ blocks within their jurisdiction.

2. The ‘Data Feeding’ process is the process of uploading this Excel file (downloaded in step (i) above) on the SLBC websites. SLBC websites should have a provision to ‘Import/ Upload’ all the data present in the Excel Sheet on the database of the SLBC website. This would obviate any manual ‘data entry’ at the SLBC/ Controlling Office level.

3. To facilitate the above functionality, each SLBC Convenor Bank would have to add this ‘Import/ Upload’ functionality to their SLBC website along with the requisite capabilities at the back-end.

4. The SLBC website would, thus, effectively work as a data aggregation platform. Further, data analysis capabilities could also be added to the SLBC websites depending on the available resources.

5. The SLBC websites should provide access to LDMs to download district and block specific data directly from this website thus ensuring integrity and timely availability of data.

6. There could still be some data pertaining to State Government Schemes/ other data that is not available on the CBS or MIS of the banks. This would have to be collated at the Controlling Office level as is done now. At the SLBC website, functionalities could be provided to enter this data too. This could then be downloaded by the LDMs for district/ block level reports. Banks may also add Open Format fields like ‘text boxes’ for data or information that is special or is entered/ used once in a while.

7. Such a system ensures that LDMs & SLBC Convenor Banks have to do zero or minimal data entry/ feeding and all data is entered by a single ‘custodian of data’ which is the Controlling Office of each bank. Any information to be provided by Government extension agencies could also be similarly uploaded.

Necessary modifications may be made on the SLBC websites and to the CBS & MIS systems of all banks to implement the envisaged data flow mechanism.

A Working Group of select SLBC Convenor banks and NABARD was constituted by RBI to work out a standardised system for collection, storage, presentation and management of data on the SLBC/ UTLBC website. A Standard Operating Procedure (SOP), which may be followed by SLBC/ UTLBC Convenor Banks, member banks and LDMs, as suggested by the Working Group for management of the data flow is given at Annex III.

4. Assignment of Lead Bank Responsibility

i) Lead Bank Scheme is administered by the Reserve Bank of India since 1969. The assignment of Lead Bank responsibility to designated banks in every district is done by the Reserve Bank of India following a detailed procedure formulated for this purpose. As on March 31, 2021, 12 public sector banks and one private sector bank have been assigned Lead Bank responsibility in 730 districts of the country.

ii) State Level Bankers’ Committee (SLBC)/Union Territory Level Bankers' Committee (UTLBC), as an apex level forum at the State/Union Territory (UT) level, coordinates the activities of the financial institutions and Government departments in the State/Union Territory under the Lead Bank Scheme. SLBC/UTLBC Convenorship is assigned to banks for this purpose. As on March 31, 2021, the SLBC/ UTLBC convenorship of 28 States and 8 Union Territories has been assigned to 11 public sector banks and one private sector bank. A List of State/UT wise SLBC/UTLBC Convenor Banks and district wise Lead Banks is given in 

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