The scheme mainly aimed at developing plans and programmes for the development of banking and credit structure in the rural areas by adopting area approach. Its main objective was removal of regional and sect oral imbalances.
Originally, the District was selected as the unit for development. Later on, block became the basic unit. Presently special emphasis is laid on the improvement of functional clusters of villages in a block.
Lead Bank Scheme was the first scheme, which brought together financial institutions and development agencies on a common platform to work for the economic upliftment of the rural poor.
The basic functions of the Lead Bank are as follows:
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(i) Preparation of Service Area credit-Plans and Annual Action Plans, etc.
(ii) Monitoring the progress of the implementation of the credit plans.
(iii) Monitoring the progress of the implementation of the special programme like IRDP, etc., (IRDP Integrated Rural Development Programme). Since it is a national programme separate targets are fixed for this programme within the credit outlays of the Service Area Credit Plans. These plans require institutional credit.
(iv) Convening of Meetings of District Consultative Committee, District Level Review Committee, Standing Committee, etc.
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(v) Co-ordination of the Efforts of Government, Developmental and Credit Agencies, etc.