MINISTER OF THE STATE IN THE MINISTRY OF FINANCE (SHRI NAMO NARAIN MEENA)
(a):- Reserve Bank of India RBI has reported that on the basis of the recommendations of the Committee
under the Chairmanship of Dr. P.D. Ojha, a decentralized planning policy was adopted and a Service Area
Approach(SAA) to Rural Lending was introduced with effect from April 1, 1989 involving five distinct stages
in its implementation:
(i) Identification of the service area for each bank branch;
(ii) Survey of the villages in the service area for assessing the potential for lending
for different activities and identification of beneficiaries for assistance.
(iii) Preparation of credit plans on annual basis for the service area by each branch;
(iv) Coordination between credit institutions on the one hand and field level development agencies
on the other on an ongoing basis for the effective implementation of credit plans; and
(v) A continuous system of monitoring the progress in the implementation of the plans and individual schemes.
Under the SAA, all rural and semi-urban branches of commercial banks and RRBs were allocated specific number
of villages, generally in geographically contiguous areas and proximity to the branch concerned, the credit
needs of which were to be taken care of by the respective service area branches.
After a review it was decided to dispense with the restrictive provisions of the scheme, while retaining
the positive features of the SAA, such as credit planning and monitoring of the credit purveyance. As per
the revised norms, the allocation of the villages among the rural and semi urban branches of banks shall
not be applicable for lending except under Government sponsored schemes.
(b) and (c):- Reserve Bank of India has informed that it has no information to furnish in this regard.
