Announcing the Budget proposals for 2013-14, Finance Minister P Chidambaram said the bank is likely to be set by October this year.
"I...propose to set up India's first women bank as the public sector. I shall provide Rs 1,000 crore as initial capital. I hope to obtain the necessary approval and banking licence by October, 2013," he said.
The proposed bank will lend mostly to women and women run businesses, support women SHGs and womens livelihood, he said.
It will employ predominately women which addresses the gender related issues and empowerment and financial inclusion, he added.