All-woman bank set for smooth take-off

The Reserve Bank of India has said that the new bank licensing norms would not be applicable to the all-woman bank proposed in the Budget

The Reserve Bank of India has said that the new bank licensing norms would not be applicable to the all-woman bank proposed in the Budget. The government proposes to set up the bank with an initial capital of Rs 1,000 crore.

This is to be set up as a public sector bank. There is no need for separate guidelines. It is not being covered under the new bank guidelines, RBI Deputy Governor Anand Sinha said,indicating that the governments proposal would get full support from the central bank in terms of approvals and licence.

This means that the all-woman bank will be the first to get a licence after almost 10 years. The RBI came out with stringent norms especially on financial inclusion,promoters and shareholding for new banking licences last week,and invited applications from eligible entities.

The all-woman bank proposal got enthusiastic response from bank chiefs,especially woman CEOs of banks. It is an innovative step in achieving financial inclusion and empowering women. It will also prompt other banks to focus more on women, ICICI Bank MD and CEO Chanda Kochhar said.

The bank,which Finance Minister P Chidambaram said was likely to be set up by October,will lend mostly to women and woman-run businesses,support womens self-help groups and womens livelihood.

Meera Sanyal,Country Executive,RBS India,said,The womens bank is a novel idea of including women entrepreneurs in the mainstream of the economy and will help increase their contribution to the Indian growth story.

Rana Kapoor,Founder amp; CEO,Yes Bank,said: It is a tremendous and progressive step forward for further emancipation of Indian women who in most households,urban and rural,constitute a significant part of household savings. A specialised womens bank will add to their social security and personal income levels,and bring a lot of personal savings lying idle into the banking system,assuming that the savings rate and product offering are lucrative.

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R M Malla,CMD,IDBI Bank,described the setting up of the all-woman bank as an innovative measure to cater to the financial needs of women and enhance their participation in the financial sector. Financial inclusion continues to be the focal point of the Budget in a bid to ensure inclusive and sustainable growth,he said.

A co-operative bank SEWA Bank formed by women is already functioning in India. Around 4,000 women contributed share capital of Rs 10 each to establish the Mahila Sewa Co-operative Bank. In May 1974,SEWA Bank was registered as a co-operative bank under the dual control of the RBI and Gujarat government. It has been providing banking services to poor,illiterate self-employed women,and has become a viable financial venture.