LEAD BANK SCHEME--ITS OPERATIONAL PROBLEMS

The Lead Bank Scheme has to be revamped and revitalised to make it more effective in the present day context.The committee appointed under the leadership of Mrs Usha Thorat,RBI Dy Governor may come out with suitable recommendations in this regard.In my article titled''Lead Bank Scheme--Its operatioal Problems'' published in Financial Express dated 25th August 1973 I have made some suggestions .In my book titled ''Indian Banking--Yesterday,Today.and Tomorrow'' published in 2004 there is one chapter on this subject.It is chapter 6,on page 29.
There is pressing need to revamp and revitalise the lead bank scheme so as to make it an effective instrument for bringing about meaningful co-ordination among banks and other players operating in a district.Today there are new players such as micro finance institutions,NGOs ,co-operatives,rural development trusts,HFCs self help groups etc.A revamped lead bank scheme must be able to bring about greater participation among all players in achieving full and meaningful finacial inclusion.
Financial inclusion calls for united action and unity of purpose among all banks and players in a district.An approach on the lines of area approach can be adopted and in each area or location a particular bank can be given responsibility for achieving meaningful financial inclusion.A system of full computerisation of the process of data collection and feeding of data by all banks must be put in place at once.All banks must enter data online on a daily basis.With the help of this the lead district office can periodically prepare updates and review reports for monitoring purposes.Such data base can also help in preparing credit plans,fianacial inclusion plans progress reports etc from time to time.Potential linked plan of NABARD must be integrated with District Credit Plan of each district.
The district consultative committees must also be revamped and the periodic meetings must be result-oriented and not mere rituals.The revamped LBS must become an effective instrument in bringing about full and active involvement of all banks and other players in all efforts and schemes.
The lead district manager is an officer on scale III in MMG at present .The post must be upgraded and an Asst.General Manager must be appointed as Chief Lead District Manager and he must have a Deputy in Dy Chief Lead District Manager who must be a chief manager in grade.Adequately qualified officers say with postgraduation in Economics,Commerce or Statstics with flair for co-ordinating and development work must be identified and posted as Chief Lead District Manager.The RBI must give adequate importance to the scheme and its revitalisation.The regional Director of RBI in each state must take the scheme seriously so that banks can involve themselves fully in the scheme and its implementation.