The government will merge the Bharatiya Mahila Bank (BMB) with India’s largest lender State Bank of India (SBI) to ensure greater banking outreach to women.
The decision “has been taken in view of the advantage of the large network of SBI among other things”, the finance ministry said in a media statement.
A Finance Ministry StatementSBI group already has 126 exclusive all-woman branches across the country while BMB has only seven. The proportion of administrative and managerial costs in BMB is much higher to reach the same coverage. For the same cost, a much higher volume of loans to women could be given through SBI.
The Bharatiya Mahila Bank was founded in 2013 in order to drive economic empowerment of women. It has 103 branches, seven of which are run by an all-woman staff. In the first three years of its existence, the bank has disbursed loans worth Rs 192 crore to women borrowers, the ministry’s statement said.
SBI has already received Cabinet’s approval to merge its five associate banks with itself, and will complete the merger on April 1. It will take India’s largest bank’s total deposits to over Rs 26 lakh crore. The combined entity will have a balance sheet size of over Rs 32 lakh crore.
The merger with Bharatiya Mahila Bank will not impact SBI’s business significantly, but will reinforce its focus on financing women entrepreneurs, the public sector lender said in a separate statement. India’s largest lender has a loan exposure of more than Rs 46,000 crore to its women customers, the statement said.
SBI said it is awaiting a formal notification from the government on the merger with the Bharatiya Mahila Bank.