Budget 2013: Ladies-only banks make strong business sense, say experts

The finance minister's proposal to set up a women's bank may have triggered a flurry of jokes on twitter and the social media, but bankers acknowledge that it will give a boost to financial inclusion.

"It will provide a sense of comfort for the segment of women that finds going to a bank intimidating," said Shikha Sharma, MD & CEO, Axis Bank.

According to Aditi Kothari, EVP, DSP Blackrock, and the daughter of Hemendra Kothari, there is a tendency among women to leave financial matters to men and many do not know what to do in the event of a divorce or a death.

"I think it will encourage women and make them more confident. There are a lot of women planning to start their own business. A bank for women will help them become financially independent," she said, adding that the objective of increasing women's participation cannot be done by existing banks.

"To get so many public sector banks to change their culture and to get them to think of women's needs is a long-term goal. The medium term goal to start a bank for women would serve as a model that will help other banks realise women as a segment and help to change culture," she said.

The new bank will have a paid-up capital of Rs 1,000 crore and should get its licence by October. The government is yet to come out with the fine print on the extent to which the new entity will lend to women and the extent to which jobs will be reserved for women. In the past a private sector bank discontinued a women's only branch ostensibly on the grounds of security.

Rana Kapoor, MD & CEO of Yes Bank suggests that the Women's Bank could tie in a gold deposit account, which would help convert physical savings into financial savings. "It is a tremendous and progressive step forward for emancipation of Indian women who constitute a significant part of household savings. A specialized women's bank will add to their social security and personal income and even bring in a lot of personal savings lying idle into the banking system," said Kapoor.

The All India Bank Employee Association has supported the proposal for a women's bank.


Source: Economictimes