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The Bharatiya Mahila Bank (BMB), which opened last week, has attracted a lot of attention. But what exactly does this bank, the country’s first women’s bank, do? A visit to the Chennai branch, one of the seven branches opened, reveals more.
The bank, situated in the city’s arterial and perennially busy road, has seven employees. But no, they aren’t all women! The staff includes one male member.
Queuing up
In the days since its opening, the bank appears to have received a healthy interest. Says the bank’s manager, Nijasundari, “On the very first day, we got 12 applications for savings accounts and two for current accounts.” Now, that’s a good start.
In fact, in the half hour the writer spent in the branch, five customers walked in.
A conversation struck up with one of the women customers walking in revealed that she was there simply as a show of solidarity. As it was a women’s bank, she wanted to encourage the concept by opening an account with the bank. What’s her occupation, you ask? She works for the police.
Women coming to the bank, Nijasundari says, are mostly those looking to raise funds for business. “Women who come here tell me that they want to start a business and need finance. I tell them about our schemes for start-ups in play schools and catering services and the response has been really good….”
Time will tell whether the Bharatiya Mahila Bank turns into a success story, offering advantages other banks do not. But in the meantime, we explain here two products offered by the BMB. Watch this space for information on other products from BMB as and when they’re introduced in the coming weeks.
BMB Sangreh
All right, so men can work in the women’s bank. But can they open deposits, too? Yes, they can. The BMB takes deposits from men too. and pays them interest at par with women depositors.
As for savings accounts, the bank appears to be quite attractive. Currently, public sector banks offer interest of 4 per cent per annum on savings account (for up to Rs 1 lakh). Kotak Mahindra Bank and YES Bank give a higher 5.5-6 per cent on their savings account, but their minimum balance requirements are higher.
BMB pays 4.5 per cent interest on balances up to Rs 1 lakh and five per cent on balances above Rs 1 lakh. There is no minimum average quarterly balance requirement and no stipulation of minimum amount to open the account. Standard facilities, such as debit card, personalised cheque book and internet banking are available. A free personal accident cover of Rs 1 lakh is bundled with the account.
To open a savings account with the bank, all you need to do is to fill the application and KYC forms and provide proofs of address and identity.
BMB Nav Rasoi
Where the bank does have a women-only policy is for loan products. On the lending side, it provides finance only to women or for businesses that sell products or services to women. One of the loan products being offered is one for kitchen renovations.
This is a term loan for women to modify their kitchens. Women with net income of Rs 2.5 lakh and above a year are eligible for this loan. The borrower can be salaried or self-employed and should be between the age of 21 and 55. Borrowings under this scheme can be used for kitchen renovations — civil work, tiling and flooring, setting up a modular kitchen and plumbing. The money can also be used to fill up your kitchen.
You can purchase electrical appliances for the kitchen, including cooking stove, water purifier, chimney and microwave oven. Buy furniture for the kitchen, including dining tables. Utensils, crockery and cutlery can be bought with a ceiling of Rs 25,000.
However, the house should be in your name or in the name of the co-borrower. If it is pledged with a bank, you would not be eligible for the loan. Also, you are required to put up a margin of five per cent of the loan value for up to Rs 1 lakh. For loans above Rs 1 lakh, you will be required to put up a margin of 20 per cent.
The maximum amount loaned under this scheme is Rs 7 lakh and the minimum Rs 50,000. The bank gives a moratorium of one-six months for repayment, which will be done through EMIs. You can get a maximum repayment period of 84 months. The scheme charges an interest of 2.5 per cent over the base rate (10.25 per cent currently). The processing charge for the loan is 0.5 per cent of the loan amount.
>rajalakshmi.sivam@thehindu.co.in
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