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Question
Write a short note on Local Area Banks, Give two examples.
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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