Tapping masala dabba savings
Women have always been sound financial managers and yet they own only one per cent of the individual assets in the country. In this interview, Usha Ananthasubramanian, CMD of the newly opened Bharatiya Mahila Bank, the country’s first all-women public sector bank, talks about why it is important to bring out the money kept in the masala dabbas at home into the formal banking channel. Edited excerpts:
You have come from a bigger bank (in terms of size) where you have been catering to more men than women. Moving to an all-women bank, the experience is going to be very different. What is your plan?
I come from working in Bank of Baroda and Punjab National Bank, which are two strong pillars of the banking industry in the country. The Bharatiya Mahila Bank (BMB) may be small but it is going to be a very interesting and exciting journey ahead because this is something new and one has to create things from scratch. This is a first-of-its-kind bank that has been set up in the public sector; so there is excitement, there is a challenge, a lot of anxiety and there are going to be a lot of happy moments. I have always believed that women have a good sense of money management. They always have this tendency to save and especially, in middle and lower middle income households, women are not spendthrifts. They are good managers of household finance. Generally, their savings remain in the masala dabbas and don’t come into the formal banking channel or the productive channel. So at BMB, in our own best way, we will try and reach out to all these women and bring them into the formal channel.
Would you have preferred heading an existing bank instead of a newly launched one?
I am very happy to be given this opportunity. I prefer heading the BMB because here I will be able to do something new. The scope of doing much in a limited tenure is very less in existing banks. (But) the opportunities here are tremendous, and exciting as well.
What is your vision for the bank? How will it create a niche product in this sector?
The vision of the bank has been: ‘Empowering women economically.’ These words are very powerful. We are not only going to empower women economically but will also focus on their overall development, including education, health and skill development. By March 2014, we plan to open 25 branches, one in each state capital, and open another 55 branches by March 2015. We have identified the centres with strong presence of women in the workforce. This includes not only white-collar jobs but also farming and other such activities which will enable us to comply with the Reserve Bank of India’s mandate of having 25 per cent of our branches in the rural, unbanked areas. We will also target women engaged in homogeneous activities which are not covered by self-help groups (SHGs). As of now, we have projected a target of reaching 60,000 crore in deposits and advances by 2020. Technology is going to be our big driver of growth.
How does Mahila Bank, with only 25 branches by the end of this year, plan to reach out to these women? After all, even an existing PSB with thousands of branches is finding it difficult to achieve the financial inclusion objective.
The best way to reach out is through NGOs and other foundation trusts which are already working in rural areas. There are two types of NGOs: first, those which will take money from us and then distribute it out to the rural women, like micro-financing. The other category includes NGOs which are involved in skill development. So, if they are able to train a group of 50 women for any job like, say, mobile repairing, then a potential is created for us to cater to them. We can then lend out to them to set up a mobile repairing centre in the village and make their accounts savings-linked.
Women are quick learners, are very receptive and come with an economic agenda – reasons why lending to them does not involve too much hassle. Most of them have simple goals – a better standard of life, quality education for children and the like. So there is an economic agenda for them. They take smaller loans and as they repay the first loan there is motivation to take the second. This process leads to economic empowerment.
Having identified your target group and your medium, how would you go about selling your products?
We are also involved in spreading financial literacy. For people, the most important factor in taking a loan is the timeliness of credit and that is why moneylenders have existed for so long and are still a part of the ecosystem. Making people financially more aware about such things is very important which will simultaneously lead them into the formal banking channel.
How would you attract more women into the banking activities?
First of all, we encourage entrepreneurship of any kind – from a roadside tea stall to a manufacturing unit. So we will be catering to a spectrum of women – from the have-nots to the haves to the high net-worth individuals (HNIs), everybody will be encouraged. So micro and small enterprises like boutiques, fashion studios, beauty parlours, day-care centres, catering units etc. will be our greater focus. As far as other loans are concerned, we will come up with a lot of concessions. For instance, a one per cent concessional lending for education of girl children, which will help encourage more parents to send their daughters to school. We will also be give 0.5 per cent concession on loans to buy homes owned by women, and similar concessions on vehicle loans to women buying the vehicle. All these concessions are a token of our recognition of the need to empower women.
By arrangement with Governance Now