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Question
Write a short note on Local Area Banks, Give two examples.
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Solution
The local Area Bank (LAB) scheme was introduced by the RBI in August 1996. LABs are small private sector banks established in rural and semi-urban areas. Each bank serves two or three adjoining districts only. Their main objective is to mobilize rural savings (accept deposits) and invest them in the same areas.
Examples:
- Coastal Local Area Bank, Vijayawada, Andhra Pradesh.
- Subhadra Local Area Bank Limited, Kolhapur, Maharashtra
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