Abstract

Financial inclusion has emerged as a key driver of rural development in India, with the Lead Bank Scheme playing a crucial institutional role in expanding banking services to underserved regions. This study examines the contribution of the Lead Bank in promoting financial inclusion and rural development in Bhagalpur district, while also linking these developments to the broader framework of Global Value Chains (GVCs). The research is based on both primary and secondary data. Primary data were collected from 120 rural respondents through structured questionnaires, while secondary data were sourced from district credit plans, RBI reports, and government publications. The study analyzes the role of the Lead Bank in areas such as credit distribution, financial literacy, support to self-help groups (SHGs), and promotion of digital banking services. The findings indicate that the Lead Bank has significantly improved access to banking services, increased credit flow to agriculture and small enterprises, and enhanced rural livelihoods. Financial inclusion initiatives have enabled rural producers to access formal financial systems, thereby facilitating their integration into broader economic networks. However, challenges such as low financial literacy, inadequate infrastructure, and procedural delays in credit delivery continue to hinder optimal outcomes. From a GVC perspective, improved financial access enables rural producers and micro-enterprises to participate in value chains by facilitating production, processing, and market linkages. The study concludes that strengthening institutional mechanisms and improving digital and financial literacy are essential for sustainable rural development and global economic integration.

Keywords: Financial Inclusion, Rural Development, Lead Bank Scheme, Bhagalpur, Global Value Chains, SHGs, Digital Banking