Service Area Approach is a modification of the Lead Bank Scheme and is mainly effec­tive insofar as it relate to formulation of credit plans, and the review systems, as recom­mended by the working group to review the working of the Lead Bank Scheme.

Under this approach, Annual Credit Plans (ACPs) are prepared at the grass root level, i.e., at the level of Service Area Branch of Commercial Banks and Regional Rural Banks (RRBs).

In terms of the earlier scheme, credit plans were first prepared at the district level and targets were distributed down the line to the branches of commercial banks and RRBs.

In order to re­view the progress made under these plans on an ongoing basis at quarterly intervals, com­prising of Government officials, banks and other financial institutions were set-up.

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Such group as (a) Block Level Bankers Committee (BLBC) (b) District Consultative Committee (DCC) (c) State Level Bankers Committee (SLBC) at block, district and state levels respec­tively.

In addition, district and state levels, District Level Review Committee (DLRC) and State Level Review Committee (SLRC) were set-up for half-yearly reviews of the progress in the implementation of Annual Credit Plans and to obtain a direct feedback about the success or otherwise of the schemes. Standing Committee of DCC is also formed at district level.

For the follow-up of implementation of the Credit Plans, different committees are set­up under the scheme. They include the following:

(a) District Consultative Committee

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(b) District Level Review Committee

(c) Block Level Bankers Committee

(d) State Level Bankers Committee

(e) State Level Review Committee and

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(f) Standing Committee.

The banks have posted an experienced officer as Lead Bank Officer. He is a spokesman for all the banks in the district. He is also a liaison officer between the credit agencies and Government and development agencies in the district. The important functions of Lead Bank Officer are

(i) Liaison with bank branches, District Rural Development Agency (DRDA) and other agencies.

(ii) Convening and effective conduct of DCC and DLRC meetings.

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(iii) Playing a leading part in the Standing Committee.

(iv) Take active role in the preparation of credit plans and annual action plans.

(v) Studying the field level problems.

(vi) Analysing the problems identified and seeking better solutions for them through the co-ordinated actions of the various agencies.

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(vii) Providing information about these matters to the Lead Bank Manager and seeks his guidance

Let us discuss the important forums set-up under the Lead Scheme

(a) District Consultative Committee (DCC):

DCCs were constituted in the districts as a common forum for consultations among financial institutions like banks and the con­cerned Government Departments.

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All the commercial banks, co-operative banks including DCCB and SLDB, RRBs, NABARD, etc., and most of the State Government Departments and allied agencies are members of the DCC. Lead District Officer (LDO) of RBI also is a member of this forum. District collector is the Chairman of this committee.

Its membership is restricted to 20-25 for effective and meaningful discussion in the meeting. The Lead Dis­trict Manager (LDM) of the Lead Bank is the convener of DCC. Important functions of DCC are as under:

(i) Identification of potential bankable schemes for inclusion in the Annual Credit Plan (ACP).

(ii) Finalization of DCP/IRDP block plan.

(iii) Allocation of shares of DCP/ACP outlays.

(iv) Monitoring the overall progress in physical and financial terms in the implemen­tation of ACP, IRDP, etc.

(v) Review/Monitoring of the support forthcoming from government departments.

(vi) Reviewing the progress in disposal of loan applications and ensuring that appli­cations are sent in a phased manner and not in bunches in the last quarters of the financial year.

(vii) Identifying problems/bottlenecks in the flow of credit as also of infrastructure inputs, etc., and taking steps to overcome them.

(ix) Overseeing and ensuring smooth release of subsidies. Monitoring the recovery position of financial agencies and rendering necessary help for recovery of over dues.

(x) Taking up with state government/SLBC/SLCC, items/issues which cannot be tackled at the district level and ensuring proper follow up thereof including secu­rity arrangement, lack of infrastructural support, etc.

(xi) Identification of unbanked centres for opening of branches and reviewing the progress in the opening of branches.

(xii) Evolution of the ground level implementation of various schemes and benefits accruing thereunder to the identified beneficiaries.

A small functional sub-committee of the DCC is constituted in the district and it meets every month for regular monitoring of IRDP and other government sponsored schemes. Also other important matters concerning DCC which require urgent attention are discussed in this forum.

(b) District Level Review Committee (DLRC):

One meeting of DCC every half year is being held as a District Level Review Meeting with a view to evaluate the progress made in the implementation of schemes included in DCP/ACP, identifying problem areas and dividing suitable remedial steps.

The follow-up of the decisions of the DLRCs are discussed and necessary steps are taken by the DCCs. Non-officials like local MLAs/MPs and repre­sentatives of groups of beneficiaries of rural lending are also included as members of the DLRC.

(c) Block Level Bankers Committee (BLBC):

BLBC is fallout of the Service Area Approach and endeavors towards achieving co-ordination between credit institutions on one hand and field level development agencies on the other and it helps in the effective implementation of credit plans at the block level.

The membership of BLBC consists of bankers and government extension officers at block level. Broadly, BLBC attends to all items of work connected with a credit plan including government sponsored programmes and allocation of villages under service area approach. BLBC at the block level is the counter part of DCC at the district level.

(d) State Level Bankers Committee (SLBC):

SLBC is a state level forum comprising representatives of commercial banks including (RRBs), State Co-operative Bank, Land De­velopment Bank, NABARD, RBI, etc. It is chaired by the Chairman/Executive director of the convener bank. SLBC reviews the banking developments in the state with special refer­ence to Annual Credit Plans, government sponsored programmes, flow of credit to priority sector, branch expansion.

(e) State Level Review Committee (SLRC):

Similar to DLRC at district level, SLRC exists at the state level and meets at half-yearly intervals. The proceedings of the DLRC meetings form the basis of discussion at SLRC meetings.

(f) Standing Committee:

This is a sub-committee of the District Consultative Com­mittee. With a view to speed up the work and also to provide an expert technical assistance the RBI felt that a standing committee should be constituted. Representatives of Lead Bank, RBI, NABARD, DRDA, Co-operative Department, DCC Bank, Gramina Bank are the mem­bers of this committee. ,

In addition to those representatives, the Districts Planning wing, the Commercial Banks having a large number of branches in the district (other than Lead Bank), and other devel­opment agencies have representatives in the committee.

The Lead Bank officer is its convener and the meetings are convened under the chair­manship of the District Development Commissioner or Collector. The committee meets once a month and its main objective is to monitor the implementation of IRDP at the dis­trict level. This committee acts as a task-force of the District Consultative Committee under the Lead Bank Scheme. The main functions of the committee are:

(a) To make in-depth studies of development potential in the block.

(b) To review the progress under special programmes such as IRDP, SC /ST Develop­ment plans, etc.

(c) To study and identify the basic operational problems in implementing various schemes.

(id) To finalize the financial limits for various crops cultivated in the district.

(e) To act as the effective machinery for the district consultative committee and carry out its tasks more effectively and in right time.

The Lead Bank Scheme improves the tempo of economic growth of the country by providing gainful employment to the people, particularly the small borrowers and by up­lifting the weaker sections of the society. This scheme helps in reducing regional, economic, as also, spatial and functional disparities in the country and thereby correcting the pectoral imbalances in the economy.