GS PrelimsEconomyBanking2012

The basic aim of Lead Bank Scheme is that

A

big banks should try to open offices in each district

B

there should be stiff competition among the various nationalized banks

C

individual banks should adopt particular districts. for inten- sive development

D

all the banks should make intensive efforts to mobilize deposits

Correct Answer: Option C

Explanation

1. The Lead Bank Scheme (LBS) was introduced in India in 1969, based on the recommendations of the Gadgil Study Group and Nariman Committee. 2. The basic aim of the scheme was to assign a leadership role (hence 'Lead Bank') to an individual bank (either a commercial bank or a cooperative bank) for each district. 3. Option (C) correctly states this core objective: individual banks should adopt particular districts for intensive development. The Lead Bank was expected to coordinate the efforts of all credit institutions in the district to increase the flow of credit for agriculture and other priority sectors, survey the credit needs, identify growth centres, and prepare District Credit Plans. 4. Option (A) is partially related but not the core aim; the focus was on coordination and leadership, not just opening offices. 5. Option (B) is contrary to the spirit of the scheme, which aimed at cooperation and coordination rather than stiff competition in a specific context. 6. Option (D), while important for banks, mobilizing deposits was not the central or defining aim of the Lead Bank Scheme itself; its focus was primarily on coordinated credit deployment for development.

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