On slippery ground?


After nearly two years of existence, Mahila Bank struggles to carve a niche

mahila-banksINAUGURATED WITH much fanfare on November 19, 2013, with a promise of a bigger leap towards greater emancipation of women, what went wrong with Bharatiya Mahila Bank (BMB) that “rumors” of its merger is in the air of the banking world today? Of the women, for the women and by the women, all in all a power house for women’s entrepreneurship best defines the idea behind the Mahila Bank. One of its kinds, the BMB was started to create an institution  with selected group of talented women who would contribute towards increasing the visibility of women in the decision-making arena and enhance their financial inclusion. The Government took the decision to set-up India’s first Women’s Bank based on the idea that women need equal access to economic institutions and assets. Now both of these components are interrelated; control over assets is essential to access finance and vice versa. The first logical step towards economic empowerment, therefore, is to provide equal access to capital to women while addressing the problems of lack of collateral. This would help promote both asset ownership by women and entrepreneurship.

Thus, to help increase employment and entrepreneurial opportunities for the women in India, the Government infused an initial capital of Rs. 1000 crore in the Bharatiya Mahila Bank Limited. However, today this ambitious project faces the threat of losing its identity.

So what went wrong, or is it too early to draw conclusions?

Going by the analysis of the establishing process of the Mahila Bank over last two years, it can be said that hiccups have always
been there. Even during the planning stage there were people who disagreed with the very basic concept of Mahila bank and the
notion that it would promote financial inclusion of women. The concept rather the basis of creating BMB was an assumption that an all-women bank will be inherently wiser about dealing with women customers. This concept failed to convince a number of people in the knowhow of business and economy. These people believed that success of any financial institution depends on factors like capital, costs, risk, governance, labor, systems, technology and administration rather than the gender of capital provider. Even psychologists say that this idea that women are better than men or vice-versa is wrong. They say that it is easy for both men and women to fall prey to stereotyping and discriminatory behavior, so how is it justified that women staff would serve better to women customers? Effort should be to improve the quality of products and service and focus on better training than creating men and women divide. As to build a successful institution, bias and malpractice need to be checked through good leadership and effort, not through sexual discrimination.

The banking industry which is head-deep in nonperforming assets (NPA), when global economy seems to be reeking under continuous devaluation of currency and where scams along with natural disasters are corroding the Indian treasury right up to its base, investment into another new set-up rather than strengthening the already existing ones definitely doesn’t seem to be a good idea, at least not now. Another area where the Mahila bank seems to be missing its objective is the promise of enhanced financial inclusion of women. The Mahila Bank opened its first branch at Nariman Point area of Mumbai and not in any rural area. Entire bunch of its first batch of branches was in urban centers. The umbrella of financial inclusion was spread out in an area of Mumbai which is one of the richest areas in India. The women here are probably as much financial ‘included’ as women in the western countries. So instead of beginning with financial inclusion in a backward village, as it was expected to be, the first branch was dedicated to the glitterati of Mumbai not the needy villagers of India where financial inclusion of women is truly lacking.

Despite these issues facing the Mahila Bank, bankers still have positive views for the bank. Senior bank officials say, “The very concept goes by the approach expressed. Many a time you have to move out of the designed fashion to achieve the objective of the plans. The specialized cadre of the women employees taking care of the business at the nascent stage is sometimes difficult, however years of study and social observation suggest that financial empowerment of women has a multiplier effect on welfare of families which then percolates down to the economy. Mahila bank has been started keeping this in mind.” As far as the allegations are concerned, the bank people say that the number may not be adequate and so the organization, at present, looks  like a “mixed up population”. Further clarifying the concept, a senior banking official said, “Its vision was never restricted to woman entrepreneurs only for financial module. However, going by the theme, women entrepreneurs were to be given preference and priority over their male counterparts.”

Diamond (60th) branch of BMB
Diamond (60th) branch of BMB opened in Nagpur

So the question of it being a sexual decision doesn’t hold true. It was done to help those women who do need special attention as they are much backward than the women in the cities. Countered with the question of the first bank being opened in Mumbai and not in a village for backward women, it was defended on the grounds of administrative and business plans. “It was done to give it a better start and nothing else,” said another senior bank official. Talking on the issue of merger of the Mahila Bank with the State Bank of India, the officials said, “At the moment there is no official communication towards merger move of the Mahila Bank.” A number of negative comments and headlines for the Mahila Bank have been hitting the headlines for quite some time. News of it being a failure, a flop show, and even a politically correct but financially stupid idea have been carried by esteemed dailies all over the country. However, the bankers’ fraternity negates these “unofficial” news. They defend the bank on the grounds of it being a very new organization which is bound to have teething problem.

Defending the credibility of the institution, another official says, every organization has to meet the challenges of the system and in the competitive scenario with no background on the track, it takes some time for any organization to have its own identity and brand name.” He further adds that banking has become a challenge in the present set up and Mahila Bank will have to keep the things in place and make a space for its visibility. “There is no basis for understanding that such modules cannot survive in Indian context. The economy of India is doing fine and we should have a positive outlook,” he says.

In totality, therefore, on the one hand, critics are speaking out loud on Bharatiya Mahila Bank being a complete flop show, on the other hand, bankers are asking for more time for the institution. Forming opinions about an institution during its gestation period is never a healthy practice but it is nothing but the bank’s wobbly start-up that has invited all the flak. So whether BMB proves a gradual wipe out of public money or emerges as the harbinger patron of women entrepreneurship, only time will tell. For the time being, it is all crystal gazing.

Sagarika Ranjan