Mahila Bank is apparently giving “kitchen loan” as per the initial press reports. Kitchen is the place where most of the women in India spend their maximum time. Surely, we want to break that paradigm, not reinforce it

“What's in a name? That which we call a rose by any other name would smell as sweet” wrote William Shakespeare. But he would have definitely changed his thoughts had he visited India, a country obsessed with not just name, but names which very rarely deliver what they are supposed to do. This obsession with names is very well entrenched in the financial services industry. We don’t just sell financial products by catchy names; now we also have financial institutions being promoted by names. Latest to join the series is “Bhartiya Mahila Bank”.
 

A bank is supposed to be for women of this country, where men can not only be employees, but also have an account opening facility. So what is that differentiates this new bank with other banks that we have in India? Sounds funny but to start with it is “kitchen loan” as per the initial press reports. After all, kitchen is the place where most of the women in India spend their maximum time. This kitchen loan is the start up USP of this bank which must make our Finance Minister happy who was completely wrong to think that all banks were just clones of each other and were offering the same products and services much to his disappointment.
 

Jokes apart, the most important question that we need to debate now is not whether India needs a “ Mahila bank” or not, as we have created one, but to see what can this bank do to transform the country. There are many things that this bank can do which other banks have failed to do till now, though the concept exists on paper for long. The first and the most important objective of this bank should be to promote financial inclusion. Important thing to note here is that financial inclusion is not something which rural India alone needs. We need financial inclusion in the financial capital of India i.e. Mumbai. There are several maid servants, women vegetable vendors and other women doing small businesses etc., who do not have access to bank accounts and find it difficult to open accounts because of various constraints. These constraints include proof of residence not available, unawareness about the process of account opening etc. There is an RBI circular to handle this scenario in the name of financial inclusion but banks rarely offer the account opening facility to those who don’t matter to them. So this new bank for women can work wonders in ensuring financial inclusion.
 

The next significant contribution that this bank can do is to promote entrepreneurship among women in India. We have a huge pool of human resource in form of non-working women, which can contribute to economic growth if capital is arranged and hand-holding for starting a business is done. Banks can definitely ensure the first one and contribute substantially to the second one. There is a scheme by the government to promote start up businesses which do not have capital of their own and is called as CGTMSE. Why not make the new bank deliver capital support to woman entrepreneurs through this scheme or any other new idea, if possible? Of course, due diligence process and control points cannot be compromised by granting loans to anybody but an attempt can be made in this direction by targeting the right group.
 

Of course, a bank cannot financially be viable by promoting financial inclusion and promoting entrepreneurship alone; hence it needs to work on general banking concepts of mobilising deposits and lending to the needy. This is to say that this new bank should continue with old bank practices to remain viable but should always focus on financial betterment of women to make its name and objectives more relevant.
 

(Vivek Sharma has worked for 17 years in the stock market, debt market and banking. He is a post graduate in Economics and MBA in Finance. He writes on personal finance and economics and is invited as an expert on personal finance shows.)