After the ordinance on the food security law, the government is set to push through another populist measure, this time specifically for women. Called Bhartiya Mahila Bank, a women’s bank headquartered in Delhi will start services with six branches from November 1.
The finance ministry has set up a core management team to coordinate the process of setting up the bank, a senior official told ET.
“It has been decided that the bank will be called the Bhartiya Mahila Bank as it will have connect with rural India, which was the main idea behind setting up a women’s bank,” said the official, who did not want to be named.
In his budget speech this year, Finance Minister P Chidambaram had announced that the government would establish a women’s bank and provided for 1,000 crore as initial capital.
“We are in discussion with the Planning Commission. They will soon approve a provision of 1,000 crore under the Plan during 2013-14,” the official said.
The Bhartiya Mahila Bank will not offer any concessional rates to women, though. “It is a commercial bank, which will follow the guidelines stipulated by the Reserve Bank of India,” the official said. The bank will primarily draw its human resource from existing employees in public sector banks.
“The idea is to empower women in the country and bring banking services at their doorstep. The bank will take initiatives to open accounts of women not only through branches but by organising camps all across the country,” he said.
The women’s bank will support and coordinate with self-help groups and other organisations to promote lending to women. It will also tie up with existing state-run financial institutions to provide other services such as insurance and pension products.
According to the finance ministry’s estimates, the bank will expand its presence up to 500 branches by its fourth year of operations.
Chidambaram had earlier said that initially there would be one branch in each major region of the country – North, South, East, West and the North-East. He had argued in his budget speech that women got a raw deal from many institutions, including public sector banks.
“A number of people have told me clearly there is a bias to lend to men rather to women,” Chidambaram had said, adding that a public sector bank for women would be a good institution that would address issues usually ignored by banks.
The government had set up a five-member panel, headed by former Canara Bank chairman MBN Rao, to prepare a blueprint for the all-women bank.