The Service Area Approach was implemented under the purview of

[amp_mcq option1=”Integrated Rural Development Programme” option2=”Lead Bank Scheme” option3=”Mahatma Gandhi National Rural Employment Guarantee Scheme” option4=”National Skill Development Mission” correct=”option2″]

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UPSC IAS – 2019

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The Service Area Approach was implemented under the purview of the Lead Bank Scheme.

The Service Area Approach (SAA) was introduced by the Reserve Bank of India (RBI) in April 1989. It was an integral part of the Lead Bank Scheme, aiming to assign specific villages to each bank branch operating in rural and semi-urban areas. The objective was to ensure planned and orderly development of banking facilities, particularly credit delivery, in rural areas by making each branch responsible for a designated ‘service area’ (a cluster of villages). This was intended to improve the quality of credit planning and flow to the rural sector and avoid overlapping service areas among different banks.

The Lead Bank Scheme was introduced in 1969 based on the recommendations of the Gadgil Study Group and the Nariman Committee, aiming to give a lead role to individual banks (both public and private sector) for banking development in specific districts. The SAA operationalized the ground-level implementation of credit plans under the Lead Bank Scheme by assigning specific geographical responsibilities to bank branches. The SAA guidelines were revised in 2004, and the focus shifted towards Block as the unit for planning rather than individual villages assigned to branches.

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