A bank exclusively for women, by women, but owned by the government. How’s that?

The women’s bank will pave the way for improving the finances of the entire family, and serve the cause of the whole family admirably. Customer service should take precedent as this new bank can be a trailblazer in taking banking experience to a new orbit of happiness and satisfaction for the women of this country

Finance minister P Chidambaram in his Budget speech asked and said: “Women are at the head of many banks today, including two public sector banks, but there is no bank that exclusively serves women. Can we have a bank that lends mostly to women and women-run businesses, that supports women SHGs and women’s livelihood, that employs predominantly women, and that addresses gender-related aspects of empowerment and financial inclusion? Yes, we can.”  He then announced the setting up of India's first women's bank as a public sector bank and provided Rs1,000 crore as initial capital.

In what way exclusive women’s bank is useful?

The idea certainly appealed to women legislators, going by the thumping of the desks by many women MPs including the leader of the opposition, as shown on the TV, during the FM’s announcement. In the long-term interest of empowerment of women and inculcating in them financial literacy, the route proposed by the FM appears to be the best option under the circumstances. Because when women are financially literate, it will certainly pave the way for improving the finances of the entire family, and serve the cause of the whole family admirably. In any case, we are going to have many more banks shortly, as the Reserve Bank of India (RBI) has already announced guidelines for granting licenses to a few more banks in the private sector. If there is a need for more banks in the country as per the assessment of the RBI, why not have one more in the public sector which will cater predominantly to women and serve their needs with sympathy, understanding and concern?

Today, the biggest casualty of computerization of banks is the customer service. In the name of automation, personalized service in most commercial banks has suffered a setback and if a new bank run by women can meet the aspirations of people, specially women, and serve the society by competing with the existing banks in quality of service offered, it is certainly a welcome step in the direction of toning up the entire banking sector. After all women have a natural tendency to handle problems of people with concern and care, and if the same level of care can be extended to the bank’s customers, it will go a long way in improving customer service in all other banks as well.

But setting up a new bank and developing it to a scale and size that spreads its wings pan India will be time consuming, and may take a minimum of ten years to make an impact on the life of women of our country. The lead time required even to set up about 500 branches of this bank with at least one branch in each district may take as much as five years or more, going by the problems faced by the existing banks to set up branches in unbanked areas and to train people to manage these branches. Therefore there is a need to hasten the process of setting up this bank and here are a few suggestions to achieve this objective for the consideration of the government.

Position of female employees in commercial banks in our country:

As on 31 March 2011, the total employee strength of all scheduled commercial banks in the country is said to be 10,50,885 of which females constitute 1,86,784, or just 17.77% of the total employees.  You will observe from the following table, regional rural banks (RRBs) have the lowest percentage of female employees, mainly because of low availability of qualified women in rural areas, where the branches of RRBs are predominantly spread out, which calls for providing educational facilities in rural areas a top priority for the government.

Position of employees of all commercial banks as on 31 March 2011 is as under:  

 Total employees Female employeespercentage of females
State Bank Group3,00,62857,54419.14
Nationalized banks4,75.060 78,75916.58
Private sector banks   1,71,07138.29722.39
Regional rural banks79,886        4,4815.61  
Foreign banks24,2407,70331.78


Source: Basic Statistical Returns of SCBs in India, March 2011 (RBI website)

How to ensure success of the women’s bank?

First and foremost job of the new bank is to have enough trained women employees, who will be able to provide banking services to even the illiterate people of India.  In order to speed up the process of setting up branches in rural and semi-urban centres, the best option for the government is to seek the services of female employees on a loan basis in adequate numbers from every public sector bank, so that the new bank is able to get trained and experienced employees to start operating in right earnest, without going through the elaborate process of recruitment, training and skill development. These employees, who opt to work for the new bank can be given the deputation allowance as an incentive for them to move over to the new bank at least for the first three years, where after they can opt to go back to their parent bank or become permanent employees of the new bank.  

The next equally important job for the new bank is to set up at lest one branch in every district of our country to begin with, that will provide an all-India presence for the bank and create visibility throughout the country.  Though this is a tall order, it is desirable to have branches spread out in as many states as possible, particularly in smaller cities where there is a need to help women who are more conservative and depend on their men folk for their banking requirements.

In order to inculcate a saving habit among the women of our country, it is preferable for the new bank to aggressively go for savings deposits from the entire family with innovative schemes and incentives, which are not provided by the banks at present. This will not only help the bank to keep the costs low, but to the economy as well, as a lot of cash is said to hoarded in the homes of large number of families in the countryside, which can be tapped by the new bank for the general good of our economy.

The new bank should have a totally new business model, which should serve the needs of the society with equanimity and concern for the underprivileged people of our country. It is necessary for the new bank to equip itself with lending to womenfolk against pledge of gold, which is the most prized possession of all women in our country. Today private moneylenders and pawn-brokers do roaring business of lending against gold in all rural areas, and the new bank should, therefore, take upon this task as a challenge to provide loans against gold to all these rural population, who are at the mercy of private money lenders, at reasonable rates of interest, taking due care of the safety of their jewels as well. Besides, the women’s bank should be ready with attractive schemes to encourage girl children to go for higher education by providing education loans at reasonable interest rates, as this can change the face of rural India in the shortest possible time.

What should be the philosophy of the women’s bank?

The need of the hour is to make banking systems and procedures simple, easy and affordable to the common people of our country to make financial inclusion a reality. Today the process of opening a new bank account in any commercial bank is so cumbersome with each bank having its own KYC (know your customer) norms, calling for so many documents. The new bank should make the entire experience of banking as simple as visiting your favourite fast food outlet and walking out with some idlis or wadas. In a nutshell, customer service should take precedent over everything else and this new bank can be a trailblazer in taking banking experience to a new orbit of happiness and satisfaction for the women of this country.

In short, the philosophy of the women’s bank should be to follow both in letter and spirit what Mahatma Gandhi said in his speech in South Africa in 1890 as under:“A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider of our business. He is part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us the opportunity to do so.”

And that alone can take this new bank to unprecedented heights of glory and pinnacle of success in all its endeavours.

Other stories by Gurpur

(The author is a banking analyst and he writes for Moneylife under the pen-name ‘Gurpur’)

nagesh kini
1 decade ago
In a way women are better geared to deal with kids and elders and it is this segment of savers that needs to be serviced better. They can serve Self Help Women's Groups too.
Some banks do have All Women Branches too. Need to ascertain how they are faring.
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