Women have always been sound financial managers and yet they own only 1 percent of the individual assets in the country. In an interview with Srishti Pandey, 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.

The bank has new products and plans to go ahead of the business correspondent (BC) model and scale it up to re-designate them as business and development correspondents (B&DCs) to reach out to women in unbanked areas and also ensure their overall development.

The bank has plans to leverage technology and NGOs for reaching out into deeper pockets and lending to women for entrepreneurial activities without depending completely on collaterals. 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 percent 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.
 
So are you in talks with any NGOs?

We are in talks with Dhan Foundation and a few others. Another channel we are looking at is the handicrafts sector. We are in talks with the handicrafts development commissioners of various states, as women are responsible for making most craft items. Hence, it is easy to approach a larger number of women, including those from marginalised sections – mainly Muslims and SCs/STs – of the society in this way.
 
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 do you plan to achieve the objective of financial inclusion?

Financial inclusion is a key vertical for us. We are going through the business correspondent (BC) model for better reach. We are calling them the business and development correspondents (B&DCs) because we want them to play the role of development agents as well. We are working out our model and once the system is in place we want these B&DCs to go a step ahead of simply accepting deposits and offering loans and go on to handholding the women in rural areas and guiding them to ensure that they make sound financial decisions. Also, we have planned to involve business and development facilitators (B&DFs). So we want to incorporate the element of development besides just the mechanical job of accepting deposits and giving out loans.
 
Have you taken inspiration from any all-women bank in India or abroad?

There is SEWA Bank operating in Ahmedabad [affiliated to the Self-Employed Women’s Association, or SEWA] and then there is Mann Deshi Bank in Satara (Maharashtra). These are banks by women, for women and of women and have been doing really well. But these are operating in very small areas and don’t have a pan-India presence. So while we have closely studied these banks, trying to replicate their models will not be possible due to the sheer difference in our reach and presence.
 
The operative word in BMB is ‘mahila’. But you do plan to take deposits from men and also lend to them. Isn’t there
a chance of losing your USP that way?

We will certainly take deposits from men because deposits are my raw material. So deposits from men and women will be treated the same. But when it comes to giving out loans it will be predominantly for women and that’s how we will make the operative word ‘Mahila’ stronger. We are still to work out the final breakup though. Our women lending has certain definitions.

For instance, if a woman is a CEO of a company, or maybe 20 percent of the directors are women, or if a man takes up a loan for a cause that will benefit women like opening a school, college, etc., then we will consider lending for them as lending to women because we can’t be lending only to individuals to fulfil our target.
 
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 1-percent 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 percent 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.

Also, we have done away with processing fee on loans taken up to January 31. Besides these loans, we are also giving a higher interest of 4.5 percent on savings account of normal balance, which is higher than what any other PSB is offering. On balances of '1 lakh and above we are giving 5 percent interest. These are some of the motivations we are providing for people to bank with us.
 
Rising non-performing assets (NPAs) have been a big worry for all PSBs. What are the kinds of checks and balances you have ensured given the popular perception that women don’t have collaterals to offer?

Rising NPAs have become a phenomenon and if the banks were only running on strong collaterals there wouldn’t have been bulging NPA figures right now. So, it is incorrect to say that lending is only collateral-driven. Most women will not come with proposals for huge amounts running into crores. Loan proposals begin from a few thousand rupees at the bottom of the pyramid which are in any case collateral free.

Generally, women don’t run away with the money and spend it on alcohol, drugs and gambling. That is done by another group.
 
The legacy you want to leave…

Well, it is very difficult to answer that question on day one, but one should be remembered for the good work and the number of lives touched. I may not have made a difference to the lives of these women directly and it will be done by my people working on the grassroots but I should be able to facilitate them to be able to achieve our final objective.