Coinciding with the 96th anniversary of the birth of late Prime Minister Indira Gandhi, India has opened seven branches of its first state-owned bank for women. The bank will provide loans and financial services mostly for women and women’s self-help groups.
“The setting up of the Bharatiya Mahila Bank is a small step towards economic empowerment of our women,” said current Prime Minister Manmohan Singh
Only 26 percent of Indian women have an account with a formal financial institution, compared to 46 percent of men. In the countryside, where banks are scarce and women face more problems opening an account, the number is likely to be much lower. Per capita credit to women is 80 percent lower than that for men. Typically, Indian women give their earnings to their husbands, although many women in the country start and run their own small businesses.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
“Our main objective will be to empower and educate women financially,” Usha Ananthasubramanian, chairperson of the bank and former executive director of Punjab National Bank, told BBC.
The bank will achieve that goal by creating job opportunities for women and paying special attention to certain segments of the female population, particularly those living in the more rural areas in India, who face difficulties in society. The bank plans to open 771 branches over the next year and hopes to enter rural areas before March 2014.
Lending will predominantly be to women and to companies that focus on women, but there will be no restricts on deposits made by men. Bharatiya Mahila Bank is also looking to go beyond the banking business by providing assistance in setting up daycare centers, which could ultimately allow women to work and become more financially self-sufficient. The bank also hopes to partner with NGOs and help train women in various vocations.
The women’s bank comes almost a year after the December 16, 2012 gang rape of a female student in Delhi, which sparked nationwide protests and debate on the rape culture in India. The incident placed pressure on the government to introduce measures that would help empower women and close the gender gap. In February, Finance Minister P. Chidambaram announced the creation of the bank in his budget speech.
Although many have praised the announcement, others felt that it was a populist move designed to attract female voters in the federal elections next year. Branches of the bank have been banned in Delhi and Madhya Pradesh.