Local Area Banks – LABs :
Banking institutions operating in a small area, mainly in a city or town are called as Local Area Banks. They can expand their banking operations to a maximum of three districts. As of now, four local area banks are operating in India. These banks were formed by a Government of India scheme in August 1996 these banks are one of the types of Banks in India . All these Banks follows RBI Guidelines time to time for smooth functioning of operations & RBI approves the License. Throughout India we have only 4 Local area banks mentioned in the table below.
Distinct characteristics of Local Area Banks
- These banks are licensed by RBI under the provisions of Banking Regulation Act, 1949 and fall in the category of Non-scheduled banks.
- LABs can be established with an initial capital of RS. 5 crores and above. Promoters can be individuals, business firms, co-operative societies, etc.
Principal objectives of Local Area Banks in India
These Banks are formed to collect small savings from households in rural/ semi-urban areas.
- They provide a small amount of short-term finance to agriculture and allied activities, self-employment ventures and small-scale cottage industries.
List of Local Area Banks in India :
|Sl. No.||State||List of Local Area Banks|
|1||Andhra Pradesh||Coastal Local Area Bank Limited|
|2||Punjab||Capital small Finance Bank Limited|
|3||Telangana||Krishna Bhima Samruddhi Local Area Bank Limited|
|4||Maharashtra||Subhadra Local Area Bank Limited|