It is about banking, mainly in India

1. Banking which caters specially to
the development needs of poor

2. Objectives of Social Banking
 To provide credit facilities to the small farmers ,small
traders, cottage industries and self employed persons.
 To give priority to industries which produce essential
goods
 To provide financial resources for the welfare
objectives.

3. Major Social banking schemes
 Lead Bank Scheme
 Service Area Approach(SAA)
 Village Adoption Scheme
 Differential Rate of Interest Scheme(DIR Scheme)
 Priority sector lending
 Micro Finance via SHG-Bank Linkage Programme

4. LEAD
BANK
SCHEME
Introduced in
1969

5. What is Lead
Bank?
A bank in each district is
selected as a key instrument
Banks
A bank which
co-ordinate the
banking
institutions in
the district
Acts as a
‘consortium
leader’
Lead
bank
Credit
Agencies

6. Activities of a lead bank
1.
2.
3.
4.
5.
6.
To survey the credit needs of the district
To evolve a credit action plan for the district
To work with the government in the development
process
To make sure that small borrowers are served
effectively by the business
Assisting primary lending services
Survey the resources and potential for banking
development in the district

7. 7. Helps in marketing the agricultural and industrial
products
8. Recruiting and training staff, for offering advice to
small borrowers and farmers, in the priority sectors.
9. Setting the district consultative Committee in coordination with other banks and financial
institutions

8. To bring about an orderly and planned
development of rural and semi-urban areas of the
country

9. Scheduled Banks
Semi Urban Banks
Rural banks
Allocate Specific Villages
Service
Area

10. Stages of SAA
Identification of the service area for each bank
Survey for assessing the lending potential of villagers
Preparation of annual credit plans for each service area
Co-ordination of credit institution and various agencies
Continuous monitoring

11. Advantages of SAA
 Improving economic status of people
 Helping banks by focus on small areas
 Making lending activity easily amenable to supervision
and control
 Development of each area through micro level
planning
 Ensuring co-ordination among financial banks and
other development agencies
 Encouraging people participation and involvement in
credit planning and dispensation

12. Development of selected villages in an integrated manner

13. Main Activities
 Meeting credit need of poor
 Watershed development/livelihood based activities
 In tribal dominant villages, development through
“wadi” approach
 Assessment of credit needs/formulation of projects for
agriculture/rural development
 Creation of infrastructure in co-ordination with the
government

14.  Marketing related intervention
 Environmental/ecological related interventions
 Value chain management
 Implementation of development programme as
envisaged under government plan

15. Introduced in March 1972
Provide concessional rate of interest to low income
group for productive purposes

16. Features of DRI Scheme
 Lending at lower rate.
 Main objective is upliftment of backward strata in the
society.
 Banks monitor the utilization of loans.
 Short term ,medium term and long term loans are
provided under this scheme.

17. Introduced in 1967-68
To provide adequate
and timely financial
support at reasonable
rate to priority sectors

18.  Agriculture
 Small Scale
Industries
 Small Road
and Water
operators
 Irrigation……
………

19. RBI stipulates banks to provide credit under
Priority sector as follows
Banks
Domestic
Banks
Foreign
Banks
40%
32%
Weaker Sections – 10%
Agriculture – 18%

20. Government give much importance to Priority
Sector Lending

21. Micro credit is the
provision of thrift,
credit and other
financial services and
products of very
small amount to the
poor.

22. Introduced by Nobel Laureate and
founder of Grameen Bank
Muhammad Yunus
“The poor are like “bonsai", which could have grown
into taller trees if given proper soil. Micro Credit can
unleash the hidden energy of the poor so that they
can take care of themselves”

23. In India Micro Finance is linked to
Self Help Groups(SHG)
 A SHG is a registered or unregistered group of micro
entrepreneurs having homogeneous social and
economic backgrounds. They save money, to
contribute to a common fund and to meet their
emergency needs on the basis of mutual help.

24. Functioning of SHG-bank linkage program
1.
2.
3.
4.
5.
6.
NGOs and banks interact with the poor, especially
women, to form small homogenous groups.
They are taught simple accounting methods to
maintain their accounts.
They meet frequently and collect small amount of
savings from their members.
This pooled savings enable them to open a formal
bank account in the name of the group.
This is the first step in establishing link with the
formal banking system
Out of the pooled savings they give small loans to
members for meeting their small emergent needs.

25. 7. Empowerment is achieved through group
dynamics, decision-making, and funds management.
8. When the pooled thrift grows they can receive
external funds in multiples of their group savings.
9. Bank loans enable the group members to undertake
income generating activities.

26. Thank You