Jayati Godhawat
JWB Blogger
Here’s Why India’s First Ever Women-Only Bank Is Shutting Down
- JWB Post
- April 18, 2016
Three years ago, in 2013, former Prime Minister Manmohan Singh had launched a unique banking service to empower women in India.
Bharatiya Mahila Bank (BMB) is the first ever government-owned Indian bank for women. It has only women staff, and only the women customers or the businesses owned by women can borrow from the bank. But, men are allowed to open deposit accounts.
It now has about 100 branches, with its first branch situated at Air India’s building at Nariman Point, Mumbai.
Unfortunately, this experiment has kind of failed to make its mark in the Industry and market.
The government in operation is possibly planning to merge it with State Bank of India which is another public sector bank.
There are reasons why the Rs.1000-crore idea failed. It’s said that other public and private banks followed their suit and opened women-only branches due to which they lost its competitive advantage. It is also alleged that the project lacked optimum promotion and marketing due to which most people were unaware about these banks. The returns were also low and it was becoming economically unfeasible. In three years, its advances until September 30, 2015, were just Rs 446 crore, and deposits just Rs 920 crore.
A senior finance ministry official reportedly told, “We are looking at options and a decision will be taken soon.”
The former Finance Minister P Chidambaram also commented, “I hope the idea is not being killed because it was launched by the UPA.”
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