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Mar 18, 2013, 06.34 PM | Source: Moneycontrol.com

Union Budget 2013 - 14: A Women's Bank: Is it the need of hour?

In Union Budget 2013-14, Finance Minister - P Chidambaram advocated the cause of women empowerment. He proposed to set up India's first ever state-owned bank by the women and for the women.

Moneycontrol Bureau

In Union Budget 2013-14 , Finance Minister - P Chidambaram advocated the cause of women empowerment. He proposed to set up India's first ever state-owned bank by the women and for the women.

"Women are at the head of many banks today, including two public sector banks, but there is no bank that exclusively serves women. I propose to set up India's first Women's Bank as a public sector bank and I shall provide Rs 1,000 crore as initial capital. I hope to obtain the necessary approvals and the banking licence by October, 2013," FM said in his Budget speech.

Modus Operandi

The said bank is supposed to lend mostly to women and women-run businesses, that supports women self help groups and women's livelihood, that employs predominantly women, and that addresses gender related aspects of empowerment and financial inclusion.

Meanwhile, the move has fanned fresh debate in the industry circle. While some believe, it is a welcome move, others term it as a sheer political gimmick.

In favour...

"This is a good move towards financial inclusion," Vijayalakshmi Iyer, chairman and managing director, Bank of India (BoI) told moneycontrol.com.

"This bank will create impact particularly in rural and semi-urban area wherein local women will feel comfortable and confident in dealing with a lady banker. A bank led by women will give a sense of security to all those female customers, who till today are not comfortable to walk into a general bank branch in rural belt. However, it may not be the case in big cities," she said.

The proposed bank, according to Chidambaram, may take deposits from male customers but lend to ladies mostly. Women will form the majority of staffers in the bank.

According to Rana Kapoor, founder & CEO, Yes Bank , the move is a progressive step forward for further emancipation of Indian women who in most households, urban and rural, constitute a significant part of household savings.

"By establishing a specialized women's bank, it will add to their social security, their personal income levels as well as bring in a lot of personal savings lying idle into the banking system. Ideally such a bank should also have a gold deposit account integrated," Kapoor said.

Not in favour...

Currently, there are four prominent bankers including V Iyer from BoI, S Panse from Allahabad Bank, Chanda Kochhar from ICICI Bank the largest private sector lender, Shikha Sharma from Axis Bank third largest private sector lender. All of them are heading respective banks that do not refuse any credit to women customers.

"This is another gimmick. Credit is available to the entire woman folk irrespective of any bank. If somebody does not qualify in the credit appraisal process, it is quite nature that she will be refused. There is no gender bias here," said a senior official from a large private sector bank.

If the upcoming bank shows any relaxation in sanctioning loans to women, who may have been denied credit in a general bank, then it is going to be an asset quality issue (loan defaults), some bankers observe.

"Wonderful. We can't stop rapes, crimes against women. But we want to open a bank for women. As if women cant use normal banks!," Pritish Nandy, a veteran writer cum journalist exclaimed in a social networking platform on Thursday.

Moreover, some are of opinion that the government is highlighting the gender division only by taking such a step.


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