RBI overhauls Lead Bank Scheme; stops ‘No Due’ certificates, pushes rural outlets, sets 60% CD ratio rule
GS3Economy · S&T · Environment · Security· Monetary policy, RBI & banking· Prelims + Mains·
Why in news
The RBI proposed a revised Lead Bank Scheme to enhance credit absorption and streamline priority sector funding through bottom-up planning and alternative credit assessments.
Background
The RBI's revised scheme mandates a hierarchy of credit planning: Block Credit Plans, District Credit Plans, and Annual Credit Plans. It replaces 'no dues' certificates with alternative credit assessment methods to facilitate credit flow.
Facts for Prelims
- BodyState Level Bankers' Committees (SLBCs) are responsible for maintaining updated lists of unbanked centers.
- FactThe revised scheme sets a 60% Credit-Deposit (CD) ratio rule.
- FactDistrict level forums are tasked with monitoring coverage and progress of the scheme.
- FactThe scheme mandates bottom-up credit planning including Block, District, and Annual Credit Plans.
For Mains
Q. Discuss how the RBI's shift towards bottom-up credit planning and alternative credit assessments can enhance financial inclusion in rural India.
Dimensions to cover in your answer
- Credit accessibility: Moving beyond 'no dues' certificates to include informal economy participants
- Localized planning: Decentralizing credit priorities to Block and District levels for better rural targeting
- Monitoring mechanism: Role of SLBCs and district forums in identifying and servicing unbanked centers
Keywords: Financial Inclusion · Priority Sector Lending · Credit Absorption · Bottom-up Planning · Alternative Credit Assessment
More Economy notes
- Gift Nifty jumps 400 points from lows after US Supreme Court strikes down Trump tariffs · 20 February 2026
- NSE to launch Gold 10 grams futures from March 16 after Sebi approval. Check expiry and other details · 20 February 2026
- Hyderabad set to chart course towards becoming a integrated medical value tourism destination · 20 February 2026
- Kerala Cabinet approves IT Policy 2026 · 20 February 2026
- Cash transactions at NH toll plazas likely to be discontinued · 20 February 2026
- IMF Managing Director Kristalina Georgieva stated that AI can accelerate India's 'Viksit Bharat' goal but warned of significant risks like job displacement and financial instability · 20 February 2026
Something wrong, or something missing?
Spotted a mistake in a note, or want a topic, format or PDF that would help your preparation? Write to us. We read every mail and fix errors fast.
Report a mistake →Ask for something →thesatyadheesh@gmail.com
This note is generated automatically from SatyaDheesh's news feed and mapped to the UPSC CSE syllabus. Check facts against the original report or PIB before using them in an answer.