Govt Apathy & Weak Plans: A Flop Show Called Bharatiya Mahila Bank

Bharatiya Mahila Bank (BMB), which began with much fanfare, is set to merge with State Bank of India on 1 April.

The Bharatiya Mahila Bank (BMB), which began with much fanfare, is set to merge with the State Bank of India on 1 April. After the merger, all BMB officials and workers will become employees of SBI – India’s largest lender.

The BMB was set up in 2013 by the UPA government with an initial capital of Rs 1,000 crore. The inauguration of its first branch was attended with great enthusiasm by then Prime Minister Manmohan Singh, UPA Chairperson Sonia Gandhi, and Finance Minister P Chidambaram.

Led by Chairman and MD Usha Ananthasubramanian, the BMB sought to provide not only accessible banking services to women, but also promote asset ownership and entrepreneurship among them.

The Making of a Flop

Good intentions, however, were not enough to save the bank from bombing. A look at certain numbers is enough to give one an idea of the extent to which it flopped. In its three years, the bank has extended loans of Rs 192 crore to women borrowers. SBI, with which it will soon merge, has provided loans to the tune of Rs 46,000 crore to women borrowers within the same time period.

Further, where the BMB has only seven national branches that exclusively serve women, SBI has 126. Of the two lakh people employed by SBI, 22 percent are women; the current chairperson of SBI is also a woman. The BMB, with 103 branches across the country, has a total business of just Rs 1,600 crore.

It is clear at this point that BMB is a flop. In fact, murmurs of a shutdown had begun as far back as August 2015 despite the bank launching multiple innovative schemes to woo women customers. Among these were loans for day-care centres, kitchen modernisation, and home-based catering business. The BMB also offered a higher rate of interest on savings accounts as opposed to its competitors.

The truth is that over the last three years, both the government and the bank administration have neglected the promotion of the BMB brand.

A large percentage of the nation’s population is not even aware of the existence of this bank. Governmental neglect is evident in the fact that the position of chairperson at the BMB has been lying vacant since August 2015, after previous occupant Usha Ananthasubramnian was appointed as the CMD of Punjab National Bank.

Some people had objected to the very idea of a women-only bank at the time of the BMB’s inception. They argued that an exclusive banking service was not the way to go about achieving financial inclusion for women. Their opponents held that a bank that was staffed exclusively by women and catered only to them would have more appeal for the demographic.

Reasons Behind BMB's Failure

Without getting into that debate, the reasons behind BMB’s failure are quite clear.

1. All branches of BMB happen to be located in urban areas where banking services are in plenty.
2. BMB’s main objective of financial inclusion of women would have been better served if they had catered to rural population.
3. BMB needed stronger policies if it hoped to survive against old, established institutions.

Ultimately, the BMB’s motto of “empowering women, empowering India” is reduced to just words. Instead of creating history, the BMB will be reduced to its pages as a footnote come 1 April 2017.

(This article was first published in QuintHindi.)

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