BANKING AFFAIRS

Detailed explanation-1: -The Local Area Bank Scheme was introduced in August 1996 pursuant to the announcement of the then Finance Minister. In his budget speech, the Finance Minister referred to the setting up of new private local banks with jurisdiction over two or three contiguous districts.

Detailed explanation-2: -Coastal Local Area Bank Ltd It was the first local area bank to get a licence from the Reserve Bank of India in 1999. The bank was established on December 27, 1999, and started its operations in the same year.

Detailed explanation-3: -The full form of LAB is Local Area Bank. Therefore, one can define Local Area Banks (LAB) as banks set up by the Government of India solely to enable the local institutions to pool and mobilize rural savings and ensure that these savings are made available for investment concerning needs.

Detailed explanation-4: -Each local Area bank is registered as a public limited company under the Companies Act, 1956. However, they are licensed under the Banking Regulation Act, 1949.

Detailed explanation-5: -There are totally three Local Area banks in India as per RBI. Local area banks aims mobilization of rural savings by local institutions and make them available for investments in the local areas.