by Rudresh Pandey
Prime
Minister Manmohan Singh on Tuesday -19th November inaugurated the first women commercial bank
of the country, the Bharatiya Mahila Bank in Mumbai. Our PM on the occasion said,
“The setting up of the bank was a small step towards the economic empowerment
of women and it was also a reflection of the government’s commitment to this
cause”.
Economic
empowerment of women has been a major issue for variety of people in India.
Political parties know that Economic empowerment of women can lure votes.
Economic pundits argue that Economic empowerment of women can give a much
needed trust to our ailing economy and can be the miraculous stimulus which our
mandarins are desperately looking for. The common premise for both this set of
people is women being half of population cannot be ignored. BMB (BharatiyaMahila Bank) is the visible upshot of
collective thinking of guardians of our economy driven by their own
individual motives. Chidambaram on the occasion said “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.” Our cherished Finance
Minister also argued “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,” BMB is
offering higher interest of 4.5% on Savings balances up to 1 lakh rupees and 5%
on morer than Rs 1 lakh. This is a good strategy for any bank to start with
dosent matter if it is for women or for men.
It makes more sense if it is the first-ever public sector bank to have
been setup by the government, needless to say other ‘nationalized banks’ were
brought to existence by nationalization of private banks.
Deficiency
of Economic empowerment of women has its roots in our social fabrication where
daughters were liability and daughter in-laws were aliens in the family never
to be trusted with family properties. This resulted in failure by women to provide
collateral of any property for any bank borrowings. This has been gender
related issue with its repercussions on economic status on Indian women. This
classic example illustrates the need of banking products that take care of the
gender biases. Need for BMB is to have creative solutions to tackle gender
issues and will have to come up with better solutions than offering higher
interest rates.
Our
government hopes BMB will address gender-related biases that women face in
mainstream banking. There are no questions on the fact that there are gender
biases in our banking system. Family properties are held by the father, husband
or son. If the property is in women’s name, the plausible reason is, it is a
proxy for some legal issue. Banks are cautious to shield their safety. Business
has been men’s domain since primordial times and our society has been skeptical
on women’s capabilities on Public relations, selling skills etc. needed for survival of any
business. So, is this a banking problem or a social biases? Can a bank deal
with this issue? And if a bank can, why not all banks are pushed for it. It is
still not clear why our venerated Prime Minister and Finance Minister
conceptualized a full-service bank for Economic empowerment of women. Why other
banks who already have strong networks and strong financial backbone are pushed
to have women friendly policies and products. The answer is that Economic
empowerment of women is not just a banking issue. Our banking system need to go
beyond its framework of banking and come up with unique solutions to tackle
this socio economic problem of Indian society.
BMB can be a vanguard for
Economic empowerment of women and come up with innovative solutions.
A bank
like BMB is needed for this as they will be more focused on women issues than
any other bank who has the objective to produce better margins and have quality
assets. BMB can come up with innovative solutions show that they are practical
and effective. Government can push these solutions to other banks and achieve a
bigger objective of Economic empowerment of women. This will need out of box
thinking and ground-breaking initiatives on behalf of BMB or else it will
become one more government initiative with all its hallowed objectives. Any
initiative of this kind needs support and a very effective team. Will the
government have the will to support and give BMB the freedom to take bold
initiatives? There have been some cooperative banks with sole objective of supporting
women entrepreneurs but they were also limited by either their reach. If there
were any success stories in cooperative banks for Economic empowerment of women
they were never pushed as larger policy changes in the entire banking system.
This is a pitfall that need to be avoided in the case of BMB.
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 also 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. Government
must keep in mind the BMB is an startup and will have its own limitations.
BMB’s commercial viability must be supported as it will need to go to rural
areas where women are suppressed and need support. It is still not clear how
BMB and government will takel this as the initial plan for BMB is to have urban
branches only. Has BMB conceptualized products
without collaterals? How are they going to attract quality staff who are
dedicated to the cause and even willing to work in rural area if needed? These are the few questions BMB needs to
tackle to achieve its objectives.
