Access to a bank account is essential for women's economic empowerment as it provides a safe place to save money and opens up a channel to credit which can be used for investing in education, property or in a business
NEW DELHI (Thomson Reuters Foundation) - India launched its first public sector bank catering for women on Tuesday, an initiative aimed at economically empowering millions of women across the country who do not have access to basic financial services such as bank accounts or loans.
Inaugurating the first branch of the Bharatiya Mahila Bank in the financial city of Mumbai, Indian Prime Minister Manmohan Singh told dignitaries that despite great successes made by some women in India, many continued to face financial exclusion.
"Over centuries India has produced several accomplished women leaders in a diverse range of areas - science, medicine, business, sports, politics and so on. A recent global survey of top 50 women business leaders in the world included four Indian women," Singh said.
"However, all this does not reflect the average reality of women in our country. The sad reality is that women in India face discrimination and hardship at home, at school, at their place of work and in public places. Their social, economic and political empowerment remains a distant goal."
Access to a bank account is essential for women's economic empowerment as it provides a safe place to save money and opens up a channel to credit which can be used for investing in education, property or in a business, gender experts say.
Yet more than 1.3 billion women worldwide remain largely outside the formal financial system, according to the World Bank's Global Financial Inclusion (Global Findex) database.
In regions such as South Asia, the Middle East and North Africa, it says, women are about 40 percent less likely than men to have a formal account.
"Only 26 percent of women in India admit to having a bank account," said Finance Minister P. Chidambaram at the bank's launch.
"Since fewer women than men have bank accounts, fewer women are able to get loans. Per capita credit in the case of women is 80 percent lower than in the case of men. Hence the need for a bank that predominantly serves women – from the self-help groups to the small business women and from the working woman to the high net worth individual."
Chidambaram had pledged in his budget speech in February that the government would provide an initial investment of 10 billion rupees ($160 million) to help the bank take off.
Head-quartered in New Delhi, the Bharatiya Mahila Bank will initially have branches in seven cities including Mumbai, Kolkata, Chennai, Ahmedabad and Guwahati.
This will increase to 25 in urban and rural areas by March 2014 and will further expand to 500 over the next four years.
The bank will offer usual commercial services, and will accept deposits and give loans to women or to businesses which are either managed by or make products for women. There will be emphasis on providing credit for skills development for women and slight concessions on loan rates.
It will largely be run by women, but will employ some men. Savings accounts, but not loans, will be available to men.
Experts say women lack access to finance - partly because of illiteracy, remote locations and lack of documentation, but also because of deep-rooted patriarchal attitudes which mean men still control family budgets.
Women who wish to start small businesses often do not have the technical and financial expertise or face discrimination at local banks when they try to get loans and other services.
"The setting up of the Bharatiya Mahila Bank is a small step towards the economic empowerment of our women," said Singh, adding the bank's launch coincided with the birthday of the India's first female prime minister Indira Gandhi.
"I am also sure that it will particularly benefit women from the less privileged sections of our society. The fact that it will be run largely by women will serve as an example that given the opportunity, women are capable of taking on challenging tasks."
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