Wednesday, November 20, 2013

India gets first all-women bank; 10 things you need to know about Bharatiya Mahila Bank

Prime Minister Manmohan Singh presents the new account kit to the first account holder of the bank
INDIA'S first ever all-women’s bank, Bharatiya Mahila Bank (BMB), was inaugurated by Prime Minister Manmohan Singh in Mumbai on Tuesday. Even though the bank will focus on lending predominantly to women, there will be no restriction on account opening deposits by men. The all-woman bank will be universal in nature, with Prime Minister saying it as a small step towards empowerment of women. Here are ten things you need to know about the country’s first public sector women specific lender...

1. The BMB is the first public sector bank created by the government. PSU banks such as SBI were to begin with private banks and were later nationalized. The idea for an exclusive bank for women was proposed at the Jaipur Congress session last year.
2. The bank was launched with a corpus of Rs 1,000 crore. The bank will give 4.5 percent interest on savings accounts up to Rs 1 lakh and 5 percent for above Rs 1 lakh.
3. BMB is likely to break-even in the next “three to five years” and total business will grow to Rs 60,000 crore by 2020, finance minister P Chidambaram said. BMB will be a universal bank and will provide every banking service and facility that is provided by comparable public and private sector banks.
4. Apart from the Nariman Point branch in Mumbai, BMB has six other branches at Kolkata, Chennai, Bangalore, Ahmedabad, Lucknow and Guwahati. Two more branches in Delhi and Indore would be opened in December after the state assembly polls are over there. Headquartered in Delhi, the bank proposes to have 25 branches by March 31, 2014. In near future, the bank will open branches abroad also, says the finance minister. After starting with one branch in each banking region, the bank will expand to 500 branches by the fourth year of operation, which is when it sees operations becoming profitable.
5. BMB will have an all-women board, including Chhavi Rajawat, a village council chief from Rajasthan; Nupur Mitra, former CMD of Dena Bank; Renuka Ramnath, ex-MD and CEO of ICICI Venture; Kalpana Saroj, CEO of Kamani Tubes Ltd; finance ministry official and government nominee Priya Kumar; a Delhi-based professor and finally CMD Usha Ananthasubramanian.  Though the bank is making its debut in metros and urban centre, gradually it will enter rural areas before March 2014 with focus on areas where working women population is significant.
6. In his Budget 2013-14 speech finance minister had announced setting up of all-women bank with an initial capital infusion of Rs 1,000 crore. Chidambaram appointed a committee headed by MBN Rao, former chairman, Canara Bank, to draw the blue print for the Mahila Bank. The report was submitted in a record time of two months. The application was made in June and the final licence was obtained by 25 September.
7. The bank’s approach will be to inspire people with entrepreneurial skills. The BMB will tie up with NGOs. It will also locally mobilize women to train them in vocations like toy-making or driving tractors or mobile repairs. BMB is not a symbol of empowerment of women but is the substance of empowerment of women, along with many other measures that the Government has taken, affirms Chidambaram.
8. While men may not be allowed to take loans from BMB, but they account for about 36 percent of the candidates found provisionally eligible for appointment as probationary officers (PO). The PO post is an entry-level position in the officer’s grade in BMB had advertised 115 vacancies for this rank last month, and selected 103 candidates, according to the results notification.
9. Finance ministry has asked PSU banks to provide 125 officers on deputation to BMB. Most of these officers would be taken at one level above in the women’s bank, but their experience here would not count for promotions.
10. Per capita credit in the case of women is 80 percent lower than in the case of men. Hence the need for a bank that predominantly serves women – from the self-help groups to the small business women and from the working woman to the high net worth individual (HNI).

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