UPSC Prelims 2019 Q61: Indian Economy – Banking & Financial Sector
- (a) Integrated Rural Development Programme
- (b) Lead Bank Scheme
- (c) Mahatma Gandhi National Rural Employment Guarantee Scheme
- (d) National Skill Development Mission
Answer: (b) Lead Bank Scheme
Explanation
Service Area Approach (SAA): Institutional Umbrella
| Scheme | Purpose | SAA link? |
|---|---|---|
| IRDP | Rural poverty alleviation | Related to lending but SAA is distinct |
| Lead Bank Scheme (LBS) | Every district assigned a lead bank for banking development | YES - SAA introduced 1989 as part of LBS for allocating villages to bank branches for planned credit delivery |
| MGNREGS | Rural wage employment | Not linked to SAA |
| NSDM | Skill training | Not linked to SAA |
Service Area Approach was launched in April 1989 under the Lead Bank Scheme based on the Nariman Committee recommendations. Each rural/semi-urban bank branch is assigned specific villages (its 'service area') for whom it is responsible for planned credit delivery and financial inclusion.
Answer: (b) Lead Bank Scheme.
Why each option is right or wrong
- (a) Incorrect. IRDP was a poverty alleviation programme (1978-1999) - not the umbrella for SAA.
- (b) CORRECT. Service Area Approach was implemented under the Lead Bank Scheme (introduced 1989 based on Nariman Committee) - each rural/semi-urban branch responsible for a designated cluster of villages.
- (c) Incorrect. MGNREGS is a wage employment law (2005), unrelated to banking service areas.
- (d) Incorrect. NSDM (2015) targets skill training - unrelated.
Key point
SAA (1989) = under Lead Bank Scheme (Nariman Committee, 1969) for planned rural credit delivery. Each branch has a defined service area of villages.
Remember
The Service Area Approach (SAA) was implemented under the Lead Bank Scheme in 1989, based on Nariman Committee recommendations. Under SAA, each rural/semi-urban bank branch is assigned specific villages (its 'service area') for planned credit delivery and financial inclusion.
Common mistakes
- Confusing SAA with IRDP - both rural-development related but SAA is banking-side.
- Assuming any rural scheme is under MGNREGS - SAA is a banking planning tool.
- Not knowing Nariman Committee gave the LBS design, later refined by Gadgil Study Group.
Exam tip
LBS ecosystem: Every district -> Lead Bank (usually PSB with dominant presence). Each rural/semi-urban branch -> Service Area (villages). Coordinator committees: SLBC (state), DCC (district), BLBC (block), UT-wise.
Sources
- RBI - Lead Bank Scheme documentation
- Nariman Committee Report (1969) on the Lead Bank Scheme