To fill this basic requirement of funding by women entrepreneurs and empower women through financial inclusion, the countrys first Womens Bank is getting all set to start operations over the next few months.
The finance ministry is all set to seek Cabinet approval for the bank, which is aimed at empowering women. Though it will take deposits from both men and women, the bank is expected to focus on lending largely to women and women-run businesses.
The draft Cabinet note has been prepared and it will be placed before the Cabinet for approval soon, said a person privy to the development. The finance ministry, which had applied to the Reserve Bank of India, is also understood to have received in-principle clearance to set up the bank.
Hopefully, all systems will be put in place for the bank over the next two to three months and it will be inaugurated by the end of October, the official said.
Not to be confused with the ongoing race for new bank licenses by the RBI, the Womens Bank was proposed by finance minister P Chidambaram as part of the Union Budget 2013-14. It is aimed at catering to women, women-run businesses and self help groups.
Women are at the head of many banks today, including two public sector banks, but there is no bank that exclusively serves women, Chidambaram had said at the time.
The lack of access to institutional credit facilities by women in India has also been highlighted by a number of reports. A recent study by PC maker Dell revealed that though India is the best place for women entrepreneurs to start business based on factors such as technology, getting funds for the business is very difficult.
Women entrepreneurs in India and the US find banks or credit unions as most difficult source for obtaining funds, the study revealed.
To be set up with an initial outlay of Rs 1,000 crore, the proposed bank will open with six branches one each in the four metro cities, while a fifth would be in central India and the sixth in the north east. The bank is likely to be headquartered at New Delhi with a branch in Parliament Street. It would expand subsequently to 25 branches within a span of one year and scale up to 300 over the next four to five years.
While male employees would also be hired for running the bank, but to make it empathetic to the needs and aspirations of its target customer base, it is expected to be headed by a woman. However, who will head the bank is still a unclear.
Officials said that though a number of candidates all of whom are women have been identified, a final decision is yet to be taken and can be expected only after clearance from the Union Cabinet for the bank.
However, dont expect the bank to offer any concession rates to women customers. Finance ministry officials have said that it will function purely as a commercial bank and follow the RBIs guidelines. Apart from regular banking facilities, it is also likely to tie up with state-owned financial institutions and offer pension and insurance products.
Significantly, the concept of an all womens bank may be new to India but it is not unique to the country. For instance, to give a boost to women entrepreneurship, Pakistan too had set up the First Womens Bank way back in 1989. A scheduled commercial bank, it was set up with a similar goal of giving women economic independence.
Tanzania too boasts of the Tanzania Womens Bank, which was inaugurated in 2009 and aims to promote gender equality.