Bhartiya Mahila Bank – Thoughtbytes

When I was at the Reserve Bank of India (RBI), it was through office gossip that I first learnt that an all ‘mahila’ bank was in the offing. At that time some of us poked some fun at the idea and the topic went somewhere in the deep abyss of my memory. I hardly realised that while studying PGPX (One year full time MBA programme) at IIM, Ahmedabad, I will have the opportunity to listen to Ms. Usha Ananthasubramanian, Chairman & Managing Director of Bhartiya Mahila Bank (BMB).

In a matter of minutes into the talk, I realised that the idea that I had previously discarded as a political stunt has not only taken shape but has become concrete and a viable business venture. Ms. Subramanian explained that how from a modest beginning in November 2013, just in 6 months the bank has 23 branches, catering to 25000 customers and that by the year end the target is to have 80 branches, catering to 100,000 customers. By no means is this a small achievement!

BMB has planned to open 20 branches in rural areas and North  East India, an area which is not yet on the radar of many banks. Further, the interest rates offered at 4.5% for deposits upto Rs. 100,000 and 5% beyond that are among the highest offered by Public Sector Banks (PSBs). From day one BMB started with Core Banking Solution (CBS), a feat achieved by many bigger Indian banks only after many years of operation and consolidation. It also follows a unique opex model where in the capital intensive technology is outsourced and a ‘pay as you go’ model is incorporated. While PGPX’s strategic cost management course taught us the benefit of converting fixed cost to variable cost, BMB demonstrated how it could be implemented in reality.

BMB caters to women in this country who are unbanked through women-centric products. However, while the bank is focussed on improving accessibility of banking services to women, it does focus on providing banking services to all. Albeit, the staff in BMB is gender neutral and all those PSB’s officials who are interested to work in this great business model are openly accepted.

It is also heartening to note that BMB is planning to launch innovative products such as Mobile Branch (Branch operated through Van), beauty-parlour loans, etc. It is to be seen that how consumers react to these innovative products. The success of a mobile van based branch banking system could mark a big shift in the way retail banking services are offered in this country.

Listening to Ms. Subramanian, I realised what a difficult task she has accomplished. I understood that with right leadership and managerial talent any business problem can be solved.

I look forward to more such learnings from the upcoming speaker series event at IIMA – PGPX.

Article written by
Mukul Shastry
IIMA PGPX Class of 2015


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