DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH

Name : MAJOR K.SIVA KUMAR

Designation : Head of section
Branch : DCCP
Institute : Government Polytechnic, Srikakulam.
Year/Semester : V Semester.
Subject : Banking.
Subject code : CCP 504 (B).
Topic : Lead Banks and Merchant Banking.
Duration : 50 min.
Sub Topic : Lead Bank Scheme.
Teaching Aids : PPT and Animations
CCP-504 (B). 75 1
Objectives

On completion of this period, you would be able to:

 understand the benefits of Lead Bank
Scheme.
 understand the present status of Lead Bank
scheme.

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Questions for students

1. What benefits would a district derive from Lead Bank

Scheme?
2. Have you had any idea about the status of Lead Bank
Scheme?

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Recap

 Lead Bank Scheme was introduced to open

Branches in all the important localities in the
district.
 The banks have to mobilise savings of the
people in the district.
 They have to co-ordinate the activities of
financial institutions in the districts.

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Benefits of Lead Bank Scheme

 The following are the benefits of Lead Bank

Scheme:
 The lead bank scheme will not only result in
deposit mobilisation, but also in the expansion of
finance to agriculture and small industries.
 Individual banks make a survey of the area and
find the potential in that area.

CCP-504 (B). 75 5
Benefits of Lead Bank Scheme

 Accordingly they devise schemes for development

 The whole country would be served by both
Commercial Banks and Co-operative Banks.
 Branches expansion, supervision and guidance
would become effective.
 A dynamic relationship between Commercial
Banks, different financial institutions and
Government departments at the district level would
evolve.

CCP-504 (B). 75 6
Benefits of Lead Bank Scheme

 There would be a close integration of credit and

banking business with other activities.
 Major bottlenecks in the development of the district
would be identified.
 Lead Banks would induce the appointed agencies to
take remedial action.

CCP-504 (B). 75 7
Present status of The Lead Bank Scheme

 The scheme was implemented in 1969.

 From the very beginning, there was a
misunderstanding of the scope and objectives to
The Lead Bank Scheme.
 The Lead Bank Scheme had obviously not taken a
distinct shape.

CCP-504 (B). 75 8
Present status of The Lead Bank Scheme

 There was a serious misunderstanding about the

purpose of survey.
 A Banking Commission was appointed in 1972 to
study the situation.

CCP-504 (B). 75 9
Present status of The Lead Bank Scheme

 This commission came across two divergent views

on the role of the Lead Bank Scheme.
 One view was that the lead bank has to send a list of
the potential areas for opening branches to all the
interested banks in the district to open up their
branches, the lead bank itself would open branches
only in those places which were not taken up by
other banks.

CCP-504 (B). 75 10
Present status of The Lead Bank Scheme

 Second view was that the Lead Bank has the full
responsibility to open branches in the district
allotted to it.
 This confusion hampered the progress of the lead
bank scheme initially.

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Summary

 There are several benefits in Lead Bank Scheme.

 Branch expansion, supervision and guidance
become effective.
 Dynamic relationship will be established between
various departments.
 Bottlenecks in the district development can be
found.

CCP-504 (B). 75 12
Summary

 Corrective measures can be taken up.

 Unbanked areas can be tapped.
 The implementation of the scheme has no
good beginning though there are many
advantages.

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 Quiz

1) Which of the following is the benefit of the

Lead Bank Scheme?
a) Branch Expansion
b) Construction of Houses
c) Construction of Bridges
d) None

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Quiz

1) In which year the Lead Bank Scheme was

introduced?
a) 1980
b) 1972
c) 1969
d) 2000

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Frequently asked questions

1) What are the benefits of Lead Bank Scheme?

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