The high-level committee constituted by the Reserve Bank of India to review the Lead Bank Scheme (LBS) has come out with its recommendations.

Chaired by RBI Deputy Governor Usha Thorat, it recommends enhancing the scope of the scheme and suggests a sharper focus on facilitating financial inclusion rather than a mere review of the government sponsored credit schemes.

The committee said that most forums to monitor the implementation of LBS are being used for routine review of the government-sponsored schemes, credit deposit ratio, recovery performance, among others. Lending under such schemes constitute 0.4 per cent of the total priority sector lending. As such, the State Level Bankers’ Committee (SLBC) / District Consultative Committee (DCC) could utilise its time to discuss specific issues inhibiting and enabling financial inclusion rather than those concerning government-sponsored schemes.

The recommendations also state that the chief secretary of the state concerned may co-chair the SLBC meetings along with the chairman and the MD of the convener bank. The CM or the finance minister may be invited to attend and chair the meetings at least once a year when major policy issues are on the agenda. The RBI deputy governor/executive director may participate in the meetings on a selective basis.

Besides, the SLBC/DCC may identify and occasionally invite academicians and researchers to the meetings, both for adding value to the discussions and also for studies and product formulation for the state/district.

The report recommends that SLBC should set up sub-committees for specific tasks like IT-enabled financial inclusion, financial inclusion in urban areas, action plan for financial literacy, improvement in land records/ other evidence for land ownership/occupation, improving recovery systems, promoting bank/SHG linkage and addressing issues relating to provision of micro-finance in the state, among others.

... contd.