The Bharatiya Mahila Bank (BMB) was inaugurated by former Prime Minister Dr. Manmohan Singh on November19, 2013 by the second United Progressive Alliance (UPA) Government. The BMB, incorporated under Companies Act : 1956 on August 5, 2013, had received its `certificate of operations` on August 5 and `banker`s license` from Reserve Bank of India on September 25 respectively, of the same year. The bank started its operations in 2013 with simultaneous opening of seven branches at Mumbai, Bengaluru, Chennai, Kolkata, Ahmedabad, Lucknow and Guwahati, with all of them under core-banking facility with on-site ATMs. The aim of the BMB was to promote more financial inclusion of the womenfolk of India, and enable them to avail of the benefits legitimately due to them, from the existing banking system. The special and thrust motto of the BMB was : `empowering women empowers India` . This special bank was intended to create awareness of women and enhance their knowledge of their capabilities and promote women-centric development, innovation and productivity and entrepreneurship. The BMB was to engage more intensely with women and it was so structured and oriented to instil more confidence in women to come forward and avail of its various products or services towards their own welfare. An outcome intended was the elimination of lending bias against women in the existing male-dominated socio-economic milieu.
The BMB made a modest beginning as a start-up bank with an initial seed capital of Rs.1000 crore. The bank had obtained its initial manpower resources through deputation from other public sector banks and partly and by direct recruitment through Institute of Banking Personal Selection. It had a significant complement of mahila (women) staff from its inception, and the BMB`s women staff strength was 61% by March 31, 2014. However, in certain States like those in the north-east region, the overall women staff complement was below 50% owing to certain local or region specific factors eg. non-availability of locally-recruited personnel, unwillingness of non-regional personnel to go on transfer to branches in the north-east, etc.
The expansion of the BMB network has been steady, with 23 branches opened in the first year (2013-14) of its operations, with 33 more branches added in (2014-15). The bank has been able to spread its network to 25 States (including Delhi) and the Union Territory of Chandigarh. The 89th branch has been opened recently at Chhatisgarh. However, the BMB`s footprint has not spread uniformly to the States. Some largely populated States like West Bengal, Bihar and Madhya Pradesh have two, one and three branches respectively, while the north-east region has only five branches with no branch in Mizoram, Nagaland, Manipur and Arunachal Pradesh. This is a little surprising considering the matriarchal nature of society in some of these States and women enjoying a relatively higher position in the human development index vis-a-vis other parts of the country. Maximum number of BMB branches are in Kerala and Uttar Pradesh, at seven each.
Performance-wise, the BMB has functioned creditably. The BMB had provided credit to various segments of the priority sector amounting to Rs. 294 crore during (2014-15), and achieved a net profit available for appropriation of Rs. 28.99 crore as on March 31, 2015 with an average credit-deposit ratio of nearly 60% in respect of its branches. The bank has maintained its thrust towards women depositors and entrepreneurs, particularly in lower income categories, with loans disbursed to women at concessional rates (1% lower than normal rate) except where the loans are advanced at the base rate. The bank has bagged two awards viz. (1) the Asian Banking Achievement Award : 2015 for Technology Implementation in the Category of Best Outsourcing Project (New Banks) and (2) the Core Banking System Initiative Award for 2014 by the Asian Banking and Finance – Retail Banking Awards 2014, Singapore.
As per speculation in the media, it now appears that the BMB is to be closed down and its assets and personnel merged with other scheduled nationalised banks. The present National Democratic Alliance Government, perhaps considers that the objective for setting up the BMB can be met by the other commercial banks within the nationalised banking system, and its capital transferred to or infused with the capital holdings of other banks in need of capital or affected by inadequacy in respect of its asset position, within its fold. Union Bank of India - a public sector bank, is reported to be one of the contenders for transfer of the capital from BMB. The government is yet to take a final decision in the matter. From the point of view of economics, the decision of the ruling Government may not perhaps, be faulted. However, the psychological benefits to the women community from the BMB, despite its present limited spread as compared to other larger nationalised banks, and irrespective of the direct benefits obtained by them to the extent of availing loans at concessional rates and parking their short and medium term savings in this bank, may be undermined with this governmental decision. If the anticipated government decision on winding up of the BMB is implemented, the present refreshing opportunity provided by the bank to women by enabling them to obtain a range of loans at a rate 1% lower than the prevailing rate applicable to men, except where the loans are already being disbursed at the base rate, will regrettably cease.
The banking system in India, has been basically an urban phenomenon for quite some time, apart from being male dominated, like in other spheres of economic and even, household activity. It is an undeniable fact that, the reach of the existing banking network measurably expanded post the nationalisation of commercial banks in 1969. The customer orientation of these banks has also transformed after the nationalisation, dovetailing the banks` credit policy towards robustly supporting developmental activities, small and medium entrepreneurs, and households with limited credit-worthy assets. The growth of non-performing assets in nationalised banks cannot be attributed to the development orientation of credit policy towards the lower and marginal classes, but may be more concerned with improper assessment of entrepreneurs and their ventures as well as political pressures sometimes brought to bear on the lending banks to lend for unviable schemes and projects. It is essential to highlight that, as per analyses of defaults in repayments of banking loans and the creation of non-performing assets, the contribution of the marginalised people and women, have been relatively low. In the above–referred process, women – who constitute nearly half of India`s population, have not been able to partake of the opportunities of availing loans concomitant to their entrepreneurial needs or contribute significantly towards their households` welfare.
The BMB was expected to redress this situation and play a niche role towards women`s empowerment, by expanding the banking coverage to bring more women within its fold as depositors and bank account holders, as well as loanees and entrepreneurs, and enable them individually and also as part of self-help groups to avail credits for different economic and income-generating activities. While some may view the creation of the BMB as a needless duplicating activity, the fact remains that if the BMB is de-facto closed down in the near future, it would have been denied a reasonable operating span of life to establish its viability and vitality. As of now, the performance of the BMB has been reasonably good. The internal leadership of the BMB has performed with a modicum of maturity and in harmony with its specified objectives, without undue exposure to commercial risks.
# Data indicated above are based on the Annual Reports (2013-14) and (2014-15) of Bharatiya Mahila Bank and RBI reports.
(The author is Gautam Sen, a retired IDAS officer, who served as Adviser (14th Finance Commission) of Govt. Of Nagaland, till recently, and is presently Adviser to a former Chief Minister of Nagaland. The views expressed are the author`s own. )
