Local Area Banks in India- LABs

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 the 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.

  1. 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



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