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 mobilise rural savings (accept deposits) and invest them in the same areas.
Examples:
1. Coastal Local Area Bank, Vijayawada, Andhra Pradesh.
2. Subhadra Local Area Bank Limited, Kolhapur, Maharashtra
