India Inaugurates First Ever State-Owned Bank for Women
Nov. 20 – On Tuesday, India’s Prime Minister Manmohan Singh officially opened the Bharatiya Mahila Bank (BMB) at Mumbai’s Air India building. With seven branches initially, the BMB will accept deposits from, and loan money primarily to, women.
The first branches of BMB will be located in Mumbai, Delhi, Kolkata, Chennai, Indore and Guwahati. In a strong display of its support, the Indian government has contributed US$184 million in start-up capital, and future plans include setting up branches throughout India and eventually overseas as well.
Usha Ananthasubramanian, chairperson of the bank, stated “…the bank will be predominantly for women in accepting deposits and giving loans. Our main objective will be to empower and educate women financially.”
BMB has an all women board and all members are from the banking industry and are committed to the mission of the new bank. Women taking out loans from the bank will be able to receive rates at a slightly lower level than elsewhere. While seeking to bring all women into India’s banking system, rural women will be a particular target of the bank.
Currently, only 26 percent of Indian women have an account with a formal banking institution, resulting in a situation where women struggle to be able to take out loans from India’s banks. In comparison, 46 percent of Indian men have bank accounts, and in total only 35 percent of Indians have access to banking services.
During a speech about the BMB, India’s Finance Minister, P. Chidambaram, stated that “per capita credit in the case of women is 80 percent lower than in the case of men.”
Thus the bank stands as an important institution for bringing India’s women into a more active role within India’s economy.
Finance Minister Chidambaram believes that bank credit will grow at a compound growth rate of 16.5 percent from 2010 to 2030, a massive increase. The compound annual growth rate of the deposit base will grow at 14.6 percent – again a large increase.
It is clear that the banking industry has room for massive growth in India, especially when a bank can tap into the blue ocean market of women’s banking products. The Bharatiya Mahila Bank is well positioned to be a leader in this new market.
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