• The Service Area Approach (SAA) introduced in April 1989, in order to bring about an orderly and planned development of rural and semi- urban areas of the country, was extended to all Indian scheduled commercial banks including Regional Rural Banks (RRBs). • Service area approach is an alternative and improved method of Lead Bank Scheme for deployment of bank credit for rural development. Under SAA, each bank branch in rural and semi-urban area was designated to serve an area of 15 to 25 villages and the branch was responsible for meeting the needs of bank credit of its service area. • The primary objective of SAA was to increase productive lending and forge effective linkages between bank credit, production, productivity and increase in income levels