Question 89 from UPSC CSE 2019 - Economics

Question

The Service Area Approach was implemented under the purview of

Accepted Answer

Correct Option: B. Lead Bank Scheme

Strategy: Focus on the core banking and rural development context. The phrase 'Service Area Approach' closely aligns with credit delivery and rural banking—key elements of the Lead Bank Scheme. The other options are flagship development or employment missions but have no direct linkage to banking area demarcation. Elimination of non-banking schemes quickly narrows down the answer to the Lead Bank Scheme.

Key Info: The Service Area Approach (SAA) was introduced by the Reserve Bank of India in April 1989 as a refinement of the Lead Bank Scheme (LBS). Its main aim was to systematically allocate specific geographic areas (villages or groups of villages) to particular bank branches, ensuring focused and adequate credit delivery in rural and semi-urban areas. The LBS, launched in 1969, tasked designated 'Lead Banks' in each district with coordinating banking activities to drive rural development and financial inclusion. Under the SAA, every rural and semi-urban branch became responsible for all banking operations in its assigned service area, including credit planning and monitoring of development schemes. The SAA sought to establish close linkages between bank credit and beneficiary needs and was implemented by all scheduled commercial banks and Regional Rural Banks in India. Integrated Rural Development Programme, Mahatma Gandhi National Rural Employment Guarantee Scheme, and the National Skill Development Mission are distinct government interventions focusing on poverty alleviation, wage employment, and skill enhancement respectively, without a banking-area demarcation mechanism like SAA.

Answer

Option A: Integrated Rural Development Programme

Answer

Option C: Mahatma Gandhi National Rural Employment Guarantee Scheme

Answer

Option D: National Skill Development Mission