Only 26 per cent of women in India have a bank account. Since fewer women than men have bank accounts, fewer women are able to get loans. “Per capita credit in the case of women is 80 per cent lower than in the case of men. Hence, the need for a bank that predominantly serves women — from self-help groups and small business women to working women and high net worth individuals,” said Finance Minister P. Chidambaram.
He was speaking after Prime Minister Manmohan Singh inaugurated the country’s first public sector bank focussed exclusively on catering to the financial needs of women. UPA Chairperson Sonia Gandhi and Agriculture Minister Sharad Pawar were also present.
Bharatiya Mahila Bank (BMB) kicked off operations on Tuesday by offering higher interest on savings bank deposits, in the process becoming the first public sector bank to do so. While all other public sector banks offer 4 per cent, the Bharatiya Mahila Bank (BMB) will offer 4.5 per cent on Savings Bank balances up to Rs 1 lakh and 5 per cent on balances above Rs 1 lakh.
Chidambaram said that “It makes a lot of sense to have a bank for half of India (comprising women)… Though BMB will predominantly serve women customers, it will serve men too. Who knows, men may find that they are privileged customers in the women’s bank.”
“If a woman today wants to borrow and cannot offer collateral of any property in her name, that is a gender-related issue. So, BMB will devise products that take care of the gender biases that are built into the system. Gender-related issues will have to be addressed while dealing with women’s financial needs,” Chidambaram said.
BMB will address gender-related biases that women face in mainstream banking.
According to Usha Ananthasubramanian, the bank’s first Chairperson and Managing Director, BMB will offer various loans to women, such as for education, housing, setting up food and catering business, day-care centres, , and small and medium enterprises.
Chidambaram said BMB will be a universal bank, that is, one which undertakes multifarious banking activities, including financial services such as insurance and mutual funds and commercial/investment banking.
The bank has an eight-member all-women board of directors. Besides Usha Ananthasubramanian, who was earlier executive director of Punjab National Bank, the others on the board are: Chhavi Rajawat, Sarpanch of Soda village in Rajasthan; Kalpana Saroj, CEO of Kamani Tubes; Nupur Mitra, a former CMD of Dena Bank; Pakiza Samad, Professor of Finance and Accountancy at Zakir Husain College (Delhi); Priya Kumar, Director, Ministry of Finance; Renuka Ramnath, Founder, Multiples Alternate Asset Management Private Ltd; and Tanya Dubash, ED & President (Marketing), Godrej Group.
BMB, set up with a capital base of Rs 1,000 crore, is the first bank started in the public sector space by an Act of Parliament (other public sector banks were nationalised in two tranches in 1969 and 1980).
The bank will have seven branches (Mumbai, Chennai, Kolkata, Guwahati, Bangalore, Ahmedabad and Lucknow) initially. These will soon be followed by branches in Delhi and Indore. The bank plans to have 25 branches in the next four months and thereafter add about 75 every year.