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    Question

    The recommendation of which committee led to the

    adoption of the Lead Bank Scheme, which later became the foundation for the Priority Sector Lending (PSL) framework?
    A Narasimham Committee Correct Answer Incorrect Answer
    B Gadgil Committee Correct Answer Incorrect Answer
    C Ghosh Committee Correct Answer Incorrect Answer
    D Rangarajan Committee Correct Answer Incorrect Answer
    E Chakrabarty Committee Correct Answer Incorrect Answer

    Solution

    • The Gadgil Committee (1969) recommended the Area Approach, which became the basis for the Lead Bank Scheme (LBS). • Under this scheme: o One bank in each district was designated as the Lead Bank, responsible for preparing district credit plans and coordinating the flow of institutional credit to various sectors. o The aim was to increase credit penetration in rural and semi-urban areas and ensure access to priority sectors like agriculture, MSMEs, and weaker sections. • In 1972, the recommendations were formalized into the Priority Sector Lending (PSL) framework. • Later, the Ghosh Committee (1982) revised PSL categories, and other committees like Chakrabarty (2005) further refined targets.

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