Other special products include loans for setting up catering services and hygienic day-care centres for children of working women.
Prime Minister Manmohan Singh on Tuesday inaugurated the country’s first all-women national commercial bank, Bharatiya Mahila Bank (BMB).
On day one, the bank introduced “kitchen loans” and assured higher interest rate on savings bank accounts to lure women customers.
Women can borrow loans to redo their kitchen space, the place where most women spend most of their time, according to the bank’s chairman and managing director, Usha Ananthasubramanian.
The loan can be availed for Rs 50,000-700,000 at 2.5% above the bank’s base rate. The bank is yet to announce its base rate or the minimum lending rate. Other special products include loans for setting up catering services and hygienic day-care centres for children of working women.
BMB also announced savings bank account interest rate of 4.5% for deposits up to Rs 1 lakh and 5% for balances above Rs 1 lakh. Most public sector banks offer 4% while a number of private sector banks are providing 5-6% on the savings bank account.
“The bank aims to garner Rs 60,000 crore of total business by 2020,” said Ananthasubramanian.
The finance minister P Chidambaram, who was also present at the inaugural function, said the
bank would focus on gender-related issues that were being overlooked by existing banks.
“It will design and offer special products for women, create more job opportunities for women and pay special attention to weaker and neglected sections of women. While every bank is supposed to do these, the fact is they don’t because they have other priorities and goals,” said Chidambaram.
One of the gender-related issues that the bank aims to address is the need for collateral when the title to property is not in the name of the woman borrower. In such cases, the owner of the property can become the co-borrower.
The bank also launched education loans of up to Rs 10 lakh for girls with no processing charges.
The bank is headquartered in New Delhi with branches located in Kolkata, Chennai, Ahmedabad, Guwahati, Lucknow, Mumbai and Patna. The number would go up to 25 by the end of March 2014. Chidambaram said that the initial set of branches will be in state capitals.
“We have asked the Reserve Bank of India (RBI) to exercise regulatory forbearance for the first year,” he said adding that the bank will have to meet financial inclusion norms from next financial year onwards.
These norms specify that a bank can open a branch in Tier-I city only after opening 4 branches in unbanked or semi-banked areas.
The bank has started functions with Rs 1,000 crore as equity capital, owned fully by the government. Chidambaram said that the government intends to list the bank on stock exchanges and divest stake to public going forward. “it must reach a certain number of branches before we divest,” he said.
The bank has an 8-member all women board of directors that include Chavvi Rajawat, the sarpanch of Soda, a village in Rajasthan; Nupur Mitra, retired bank chairperson and businesswomen Tanya Dubash and Renuka Ramnath. The board can be expanded to 12 members going forward.
The bank has hired 110 employees which consists mostly of women officers from other public sector banks on deputation for three years.
Among the delegates present included UPA chairperson Sonia Gandhi and the RBI governor, Raghuram Rajan.
RBI asks banks to offer loans to women SHGs at 7%
The Reserve Bank of India (RBI) has directed public sector banks to provide loans to women self help groups (SHGs) at a rate of 7% per annum so as to get the benefit of interest rate subvention scheme. “PSBs will be subvented to the extent of difference between the weighted average interest charged and 7% subject to the maximum limit of 5.5%, for the fiscal 2014. “This subvention will be available to all the PSBs on the condition that they make SHG credit available at 7% in the 150 districts,” the RBI said.
What can women bank on?
Higher interest on savings bank account
60% of total advances will be given to women
Specialised products like kitchen loans
Will hire women preferentially
Greater focus on women in unbanked rural, urban areas
The bank’s board consists of 8 women directors, can add 4 more
7 branches across 7 states operational on inauguration
Will expand overseas in due course
Men can also open deposit accounts, borrow loans
Will support women entrepreneurs, self-help groups.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}