Three years after it was formed, the government has approved merger of the Bharatiya Mahila Bank with the country’s largest lender SBI to ensure greater banking outreach to women.
The Union Cabinet, chaired by Prime Minister Narendra Modi, had last week cleared the merger of the two banks.
Explaining the rationale behind the merger, the finance ministry said the SBI group already has 126 exclusive all-women branches across the country while the Bharatiya Mahila Bank (BMB) has only seven.
“This would ensure greater banking services outreach to a larger number of women, at a faster pace. The objectives of affordable credit to women as well as propagation of women-centric products need to be quickly achieved through a wider network and lower cost of funds,” said the Finance Ministry in a statement.
“The Union government is committed to enhancing the access to financial services to the population at large and women in particular,” the ministry said.
Under the Pradhan Mantri Jan Dhan Yojana, preference is given to women for overdraft facility. Pradhan Mantri Mudra Yojana had 73 per cent women borrowers in the previous financial year, it added.
Last month, the Cabinet approved the merger of five associate banks with SBI, paving the way for the first such wide-scale consolidation exercise to create a banking behemoth.
The branches of 5 associate banks,State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore will start functioning as SBI branches from April 1.
After the Cabinet meeting on February 15, finance minister Arun Jaitley had said although the Cabinet didn’t take up any proposal for the merger of BMB with SBI, it was very much under the government’s consideration.
Set up three years ago, BMB has extended loans of ₹192 crore to women borrowers, while the SBI group has provided about ₹46,000 crore to women borrowers. In contrast, BMB has only 103 branches and its total business was about ₹1,600 crore.
SBI has more than 20,000 branches. Out its workforce of around 2 lakh, 22 per cent are women.