Question map
The Service Area Approach was implemented under the purview of
Explanation
The Service Area Approach (SAA) was introduced in April 1989 for planned and orderly development of rural and semi-urban areas and was applicable to all scheduled commercial banks including Regional Rural[3] Banks. This approach was implemented under the purview of the Lead Bank Scheme, which focuses on district-level banking coordination and planning. Under the Lead Bank Scheme, planning starts with identifying block wise/activity wise potential estimated for various sectors.[4] As the restrictive provisions of the service area have been removed in December 2004, the Service Area Approach is applicable only for Government Sponsored programmes.[5]
The other options are incorrect: IRDP was a beneficiary-focused poverty alleviation program, MGNREGA is a demand-driven wage employment program launched much later (2005), and the National Skill Development Mission focuses on skill development rather than banking service area allocation. The Service Area Approach was specifically a banking sector initiative under the Lead Bank Scheme to ensure systematic and non-duplicative coverage of rural and semi-urban areas by banks.
Sources- [1] https://www.rbi.org.in/commonman/Upload/English/Notification/PDFs/10MC02072019.pdf
- [2] https://www.rbi.org.in/commonman/Upload/English/Notification/PDFs/10MC02072019.pdf
- [3] https://www.rbi.org.in/commonman/Upload/English/Notification/PDFs/10MC02072019.pdf
- [4] https://www.rbi.org.in/commonman/Upload/English/Notification/PDFs/94ML010714FL.pdf
- [5] https://www.rbi.org.in/commonman/Upload/English/Notification/PDFs/94ML010714FL.pdf
PROVENANCE & STUDY PATTERN
Guest previewThis is a classic 'Administrative Genealogy' question. It tests whether you understand the operational hierarchy of Indian banking history, not just current affairs. It falls squarely within the 'Financial Inclusion' and 'Rural Credit' chapters of standard Economy textbooks.
This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.
- Statement 1: Was the Service Area Approach implemented under the purview of the Integrated Rural Development Programme (IRDP)?
- Statement 2: Was the Service Area Approach implemented under the purview of the Lead Bank Scheme?
- Statement 3: Was the Service Area Approach implemented under the purview of the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA)?
- Statement 4: Was the Service Area Approach implemented under the purview of the National Skill Development Mission?
Shows IRDP was formed by bringing together several areaβbased programmes (CADP, DPAP, SFDA, MFALA), indicating IRDP functioned as a consolidation of area/targeted schemes.
A student could use this pattern (IRDP as a vehicle for areaβbased programmes) plus knowledge that Service Area Approach is an area/blockβlevel planning method to assess whether it plausibly would be subsumed under IRDP.
States IRDP was implemented through District Rural Development Agencies (DRDAs) and Block Level Agencies, highlighting block/district level administrative purview.
Given Service Area Approach operates at bank branches covering blocks/districts, one could check if its administrative units matched DRDA/block units to infer likely overlap with IRDP implementation mechanisms.
Describes IRDPβs initial confinement to specific development blocks and its objective to introduce schemes to develop the production potential of each area.
A student could combine this area/block focus with the known territorial nature of a Service Area Approach to evaluate whether the latter fits IRDPβs operational design.
Notes IRDP was introduced across all blocks (5011) with targets per block to assist familiesβemphasising blockwise implementation and asset provision.
Using this blockwise targetting fact, a student could ask if Service Area Approachβs blockwise coverage for services/credit would be consistent with IRDPβs block implementation and therefore likely coordinated under it.
Shows other programmes (DPAP, DDP, IWDP) were consolidated and their implementation basis shifted to watershed/area approachesβillustrating a pattern of grouping areaβbased interventions under integrated schemes.
A student could use this consolidation pattern to hypothesize that similarly areaβoriented approaches (such as Service Area Approach) might be placed within larger integrated programmes like IRDP and then verify with targeted sources.
- Defines the Service Area Approach (SAA) as a distinct scheme introduced in April 1989 applicable to scheduled commercial banks and RRBs.
- Describes SAA's objectives and operational design (branch-wise service area of 15β25 villages), indicating it is a standalone rural development approach.
- Separately describes the Lead Bank Scheme (LBS) and its implementation, including preparation of credit plans and PLPs under LBS, indicating a distinct programme framework.
- The document treats Lead Bank Scheme implementation as a separate section, implying SAA and LBS are separate initiatives rather than SAA being explicitly under LBS.
Describes the Lead Bank's districtβlevel coordinating role β identifying growth centres, assessing deposit potential and evolving a coordinated approach for credit deployment in each district.
A student could infer that district credit planning tasks align with a 'service area' approach and check whether Service Area Approach responsibilities match these Lead Bank functions.
States the basic idea of the Lead Bank Scheme: individual banks should adopt particular districts for intensive development (adoption/coverage of districts).
One could map this 'adopt a district' rule to the Service Area Approach concept (assignment of areas to banks) and then verify historical policy documents for explicit linkage.
Notes that all districts are allotted one Lead Bank each, emphasizing formal district allocation under the scheme.
Using a district allocation fact, a student can compare the administrative footprint of Lead Banks with known Service Area Approach coverage to see if they coincide.
Explains 'Local Area Banks' were created with explicit limits on area of operation (contiguous districts), illustrating precedent for geographically limited banking responsibilities.
A student can use this example of areaβbased banking institutions to reason that Indian policy has precedent for area assignment, then seek specific linkage between Lead Bank duties and the Service Area Approach.
Uses the phrase 'Area Approach basis' for implementation of another scheme, showing the terminology and concept of areaβbased implementation in Indian schemes.
A student could use this to justify comparing terminologies and implementation styles across schemes to test whether 'Service Area Approach' was implemented via the Lead Bank Scheme.
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- Explicitly states the Service Area Approach is applicable to Government Sponsored programmes.
- If MGNREGA is a government-sponsored programme, this establishes applicability of the Service Area Approach to it.
- Identifies MGNREGA as a scheme under the Ministry of Rural Development and a demand-driven wage employment programme (i.e., a government programme).
- Connects MGNREGA to the category of Government Sponsored programmes referenced by the RBI passage.
States MGNREGA is designed to strengthen water harvesting and watershed management, linking the scheme to watershed-type interventions.
A student could compare this with the Service Area Approachβs known focus on watershed/area-based planning to see if the SAA fits logically as an MGNREGA activity.
Lists creation of durable rural assets (ponds, check dams) as outcomes of MGNREGA work β asset types commonly produced under area-based watershed programmes.
One could check whether the Service Area Approach is the administrative/operational method used to plan such asset creation under rural employment schemes.
Notes MGNREGA revitalised Panchayati Raj institutions and implies decentralized implementation through local bodies.
Since the Service Area Approach often uses local administrative units (e.g., panchayats) as planning units, a student could investigate whether MGNREGAβs panchayat-based implementation corresponds to SAA practice.
Mentions implementation of MGNREGA in specific areas reduced dependence on shifting cultivation, indicating the scheme was applied via area-specific interventions.
A student might infer MGNREGA allows area-targeted measures and then verify whether those measures followed the Service Area Approach model.
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- Explicitly defines the Service Area Approach (SAA) as a banking scheme introduced in April 1989 for rural and semi-urban areas.
- States SAA was applicable to scheduled commercial banks (a banking/RBI domain), indicating it is a financial/credit programme not a skills-mission activity.
- Describes the National Skill Development Mission (NMSD) as an institutional framework to implement and scale up skill development efforts across India.
- Places NSDM within the Ministry of Skill Development and Entrepreneurship, indicating a separate administrative remit from banking schemes.
Defines the National Skill Development Mission (NSDM) as the central mission launched to implement and coordinate all skilling efforts and housed under the Ministry of Skill Development & Entrepreneurship (MSDE).
A student could use this rule to check whether the Service Area Approach is described as a skilling/coordination measure; if so it is plausibly under NSDM/MSDE's remit and not another ministry.
Shows specific skilling schemes (e.g., PMKVY) are implemented by MSDE under the broader Skill India/skill-mission ecosystem.
If Service Area Approach is an operational scheme or method for deploying skilling programmes, one could reasonably expect MSDE/NSDM involvement and thus check MSDE/NSDM documents for it.
Distinguishes which bodies run particular employment/skill initiatives (e.g., Craftsman Training Scheme by MSDE; National Career Service by Ministry of Labour & Employment).
Use this pattern to test the statement by identifying which ministry or mission typically runs the kind of intervention Service Area Approach represents (training vs. career services).
Lists multiple government skill-development programmes and the National Skills Qualifications Framework as part of the skill-policy ecosystem.
A student can check whether Service Area Approach is listed among these types of programmes or is consistent with NSQF-aligned, mission-mode interventions to infer likely administrative home.
Notes that some national employment/skill initiatives are explicitly launched 'in a Mission Mode' and administered by specific departments.
Apply this rule by verifying whether Service Area Approach was launched in 'mission mode' and then tracing which department/mission was named as administrator.
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- [THE VERDICT]: Sitter. Found in standard texts (Ramesh Singh/Vivek Singh) under 'Banking Sector Reforms' or 'Rural Banking'.
- [THE CONCEPTUAL TRIGGER]: The evolution of Rural Credit Architecture in India (from Nationalisation in 1969 to Financial Inclusion today).
- [THE HORIZONTAL EXPANSION]: Memorize the timeline: Lead Bank Scheme (1969, Nariman Comm., District-level) -> Regional Rural Banks (1975, Narasimham Comm.) -> NABARD (1982, Sivaraman Comm.) -> Service Area Approach (1989, Ojha Comm., Village-level) -> PM Jan Dhan Yojana (2014).
- [THE STRATEGIC METACOGNITION]: When studying a policy, map the 'Implementation Unit'. Lead Bank = District; Service Area Approach = Cluster of Villages (15-25); Aspirational Districts = District. UPSC tests the administrative jurisdiction.
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IRDP was implemented through District Rural Development Agencies and Block Level Agencies, which defines the administrative channels for any programme components or approaches.
High-yield: UPSC often asks about institutional structures and implementation mechanisms of rural schemes. Mastering this helps answer questions on administrative responsibility, scheme delivery, and links with Panchayati Raj and district planning.
- Geography of India ,Majid Husain, (McGrawHill 9th ed.) > Chapter 15: Regional Development and Planning > INTEGRATED RURAL DEVELOPMENT PROGRAMME (IRDP) > p. 20
IRDP combined CADP, DPAP, SFDA and MFALA, so knowing its composite origins is essential to trace which approaches or practices might have been absorbed into IRDP.
High-yield: Questions frequently probe the evolution and amalgamation of rural programmes. This concept connects to programme design, continuity of policies, and comparative analysis of scheme components.
- Geography of India ,Majid Husain, (McGrawHill 9th ed.) > Chapter 15: Regional Development and Planning > INTEGRATED RURAL DEVELOPMENT PROGRAMME (IRDP) > p. 18
IRDP aimed to eradicate rural poverty by asset provision, set block-wise targets, covered all blocks, and was a centrally sponsored scheme shared 50:50 between Centre and States.
High-yield: UPSC asks about objectives, scale, targets and financing of flagship schemes. Understanding these aspects aids in evaluating programme impact, CentreβState fiscal arrangements, and implementation scale.
- Geography of India ,Majid Husain, (McGrawHill 9th ed.) > Chapter 15: Regional Development and Planning > INTEGRATED RURAL DEVELOPMENT PROGRAMME (IRDP) > p. 19
- History , class XII (Tamilnadu state board 2024 ed.) > Chapter 9: Envisioning a New Socio-Economic Order > Integrated Rural Development Programme (IRDP), 1980β1999 > p. 120
Lead Bank Scheme assigns one lead bank to each district to coordinate credit institutions, identify growth centres, assess deposit potential and credit gaps, and evolve a coordinated approach for credit deployment.
High-yield for questions on banking policy and financial inclusion: explains how district-wise institutional arrangements work, links to priority sector lending and branch expansion, and enables analysis of implementation mechanisms of rural credit programmes.
- Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > ii) Lead Bank Scheme > p. 74
- Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 8: Financial Market > M India's Efforts for Financial Inclusion > p. 239
Area or service-area approaches implement programmes by geographic units to achieve targeted coverage and coordinated delivery across an area.
Important for evaluating design and delivery of schemes (banking outreach, crop/insurance schemes): helps compare centralised vs area-based implementation, and to trace how geographic targeting affects inclusion and risk pooling.
- Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 9: Agriculture > 9.46 Indian Economy > p. 332
- Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > ii) Lead Bank Scheme > p. 74
MGNREGA's core design is a statutory guarantee of 100 days of unskilled wage work to rural households, which defines the scheme's operational scope.
High-yield for UPSC because many questions ask about the objectives and entitlements under major rural schemes; this concept links to poverty alleviation, labour rights, and rural livelihoods and enables answering questions on scheme design and legal guarantees.
- Understanding Economic Development. Class X . NCERT(Revised ed 2025) > Chapter 2: SECTORS OF THE INDIAN ECONOMY > How to Create More Employment? > p. 28
- History , class XII (Tamilnadu state board 2024 ed.) > Chapter 9: Envisioning a New Socio-Economic Order > Mahatma Gandhi National Rural Employment Guarantee Act, 2005 (MGNREGA) > p. 121
- Economics, Class IX . NCERT(Revised ed 2025) > Chapter 3: Poverty as a Challenge > Anti-Poverty Measures > p. 39
The scheme prioritises works that increase land productivity and supports water harvesting, watershed management and related ecological-security activities.
Important for mains and interviews: connects public works programmes to environmental management and rural development; helps frame answers on linkages between employment schemes and natural resource management and on programme outcomes.
- Environment, Shankar IAS Acedemy .(ed 10th) > Chapter 23: India and Climate Change > Do you know? > p. 311
- Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 3: Poverty, Inequality and Unemployment > Achievements made through MGNREGA so far: > p. 57
- Understanding Economic Development. Class X . NCERT(Revised ed 2025) > Chapter 2: SECTORS OF THE INDIAN ECONOMY > How to Create More Employment? > p. 28
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The 'Ojha Committee' (1988) recommended the Service Area Approach. A likely future question is matching committees to banking reforms: Nariman (Lead Bank), Narasimham (RRBs), Ojha (SAA), Gadgil (Area Approach).
Use 'Domain Matching'. 'Service Area' implies a jurisdiction for service delivery. IRDP (A) and MGNREGA (C) are welfare schemes, not administrative frameworks. Skill Mission (D) is too new (2015). 'Lead Bank' (B) inherently implies assigning a bank to a specific 'Area' (District), making 'Service Area' a logical sub-component.
Mains GS-3 (Inclusive Growth): The shift from 'Sectoral Planning' to 'Area-based Planning' (Lead Bank/SAA) was a structural attempt to fix regional imbalances in credit-deposit ratios, a key argument for financial federalism.
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