RBI Deputy Governor Swaminathan J recently shared that banks should create credit plans by first listening to the needs of local communities. Speaking to lead district managers in Maharashtra, he emphasized that understanding the priorities of people in different areas helps banks better meet their funding needs.
The Lead Bank Scheme (LBS), started in 1969, was designed to help banks and the government work together. Swaminathan stated that plans should be based on real data gathered from local surveys instead of just theories. This hands-on approach helps identify where money is needed the most and ensures that loan plans fit local needs.
He pointed out that around half of the Self-Help Groups (SHGs) still don’t get formal loans, and many small farmers are also unable to access bank funds. Businesses, especially those run by women, are another group that often miss out on financial help. Thus, by combining data analysis with real-world experience, banks can better serve these groups with more effective credit plans.
Over the years, LBS has adapted to meet India’s changing needs, allowing banks and government agencies to improve access to banking services and provide essential funding to key areas.
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