India opens first state bank for women

India opened the country's first state-owned bank for women Tuesday, aimed at strengthening their financial security in a country with stark rates of gender inequality, underscored especially in the past year by a string of horrific sex crimes.

Prime Minister Manmohan Singh inaugurated the Bharatiya Mahila Bank (Indian Women's Bank) in the south of Mumbai, the country's financial capital, home to one of seven nationwide branches that are now operational.

The idea for the bank was first announced in February at a time when the country was still reeling from the fatal 2012 gang-rape of a student in New Delhi, which sparked anger and soul-searching over the treatment of women.

In a country where only 26 percent of women have accounts with financial institutions, the bank is focused on lending to women and aims to employ a mostly female staff, although men will be able to open accounts too.

"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," said Singh at the launch.

"The setting up of the Bharatiya Mahila Bank is a small step towards the economic empowerment of women," he added.

While this is the first such state initiative, there are existing co-operative banks run for and by women, such as the Mann Deshi Mahila Sahakari Bank in the western state of Maharashtra.

The Mann Deshi bank was set up in 1997 and is now the state's largest microfinance bank with over 185,000 clients, according to its website.

The new Bharatiya Mahila Bank, with the tagline "empowering women, empowering India," is due to have 25 branches by next March and 771 total branches over a seven-year period.

The board of directors is made up of eight women, said Finance Minister P. Chidambaram, who set aside 10 billion rupees ($161 million) to capitalize the new bank in his 2013/14 budget.

"It will create more job opportunities for women and it will pay special attention to the weaker and more neglected sections of women," he told reporters at the new Mumbai branch, where employees in blue-and-yellow sari uniforms were present.

Chidambaram said the bank would deal with "gender biases that are built into the system," such as the fact that a property title may not be in a woman's name, meaning she cannot offer collateral for acquring loans.

If a woman requires small loans of up to around 25,000 rupees ($400), "that kind of credit must be provided without any collateral," he said.

Other products on offer with the new bank include special loans for women and trying to establish catering services or daycare centers.

The bank had a mixed reception among the mostly female audience at the launch.

"Because it's run by women it will definitely help women. It's a male-dominated society," said Usha Kannan, an employee at the Central Bank of India.

But a senior worker at another bank, declining to be named, said most urban women already had bank accounts, and the new bank could struggle to reach those most in need in rural areas.

"They're going to have to be very innovative," she said.

Agence France-Presse