BUSINESS
A plethora of financial products – bank accounts, credit cards, loans, insurance, what have you – has been targeting women for long; but these offerings are more like old wine in a new bottle, and hence not faring too well in the marketplace.
A plethora of financial products – bank accounts, credit cards, loans, insurance, what have you – has been targeting women for long; but these offerings are more like old wine in a new bottle, and hence not faring too well in the marketplace, discover Nupur Anand and Vishwanath Nair
Bank accounts
To please their female customers, several banks have introduced ‘for-women-only’ accounts. Not just private sector banks such as ICICI Bank, Axis Bank, IDBI Bank, Yes Bank, even state-owned ones such as Central Bank and South Indian Bank are in the ‘woo-women’ mode. What these exclusive accounts offer are benefits like the freedom to maintain low average quarterly balance or the advantage of a low account opening fee. The list of freebies can also include insurance cover or a credit card. However, experts suggest that it is best to check other features thoroughly before opening this type of account. “If you look at the products closely, there is not much difference between a women’s special account and a regular savings bank account, except when they have discounted interest rates on loans. Such products rather add variety to the overall product portfolio of a bank, than actually add value to it,” says a financial planner. For instance, Axis Bank’s women’s special account requires you to maintain an average quarterly balance of Rs 10,000 which is the same for other accounts and so doesn’t stand out.
Credit cards
Women = inveterate shoppers = perfect targets for credit card peddlers? Card companies certainly seem to think so, if their recent drive to expand sales is any indication. For instance, the Bank of Baroda women’s card allows cardholders up to three add-on free cards. In addition, it offers a personal accident insurance of Rs 1 lakh. However, the catch here is in terms of internal limits. For instance, a silver credit card does not allow cardholders to spend more than 20% of the maximum limit on electronics, jewellery and cash withdrawal. The limit applies to even online travel tickets. If where credit cards offer free travel insurance, such cover is applicable only when the travel tickets are booked using the card. In other words, travel insurance would not be available if cardholders buy tickets via other means like cash or vouchers. It pays to peer through the fine print, including details like the cost of card issuance and the yearly maintenance fee.
Loans
In this segment, certain women customers certainly benefit. Many state-owned banks offer loans at a slightly lower rate of interest for women. Not all women and not for all purposes though. In order for women to avail these low-interest loans, they need to tick certain boxes framed by banks. For instance, Syndicate Bank offers these loans to women entrepreneurs seeking to expand their existing business. Similarly, Central Bank of India’s ‘Cent Kalyani’ scheme lowers interest rate by 500 basis points for women who want to open an entrepreneurial venture. “Apart from that, we have special branches run entirely by female staff members in every metro and some smaller towns too. This is to encourage women who don’t visit a bank branch because they are shy,” says a senior Central Bank official.
Although Cent Kalyani has been around for over a decade, the overall outstanding loan amount of the portfolio stands between Rs 500 crore and Rs 600 crore. Not much, in fine. “The product is not really that popular. Women in India do not usually borrow money as individuals. The Indian woman would rather go in for a joint loan with her spouse to get a higher loan amount,” says an official.
Then why do such products continue to be in banks’ portfolios? Well, bank officials would prefer to duck that question, but industry experts are more forthcoming. They say banks, particularly state-owned lenders, are obliged to maintain some products for form, to show how wide-ranging their portfolio is and how socially responsible their policies are.
Insurance
HDFC Life and LIC stand out. Apart from life insurance, their women-specific products offer cover for certain medical situations like pregnancy and newborns with congenital disease. Congenital disease is not covered under several health plans – so this is a big plus for women. In the health space, Apollo Munich Heath Insurance and Bajaj Allianz General Insurance also provide health-related plans. However, most of these offerings are either in the form of unit-linked plans or traditional plans which may not suit all women. Again, a thorough scrutiny of fine print is required before buying such women-specific plans.
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