PSU lender may take over Bharatiya Mahila Bank in 3 months
Bharatiya Mahila Bank (BMB) may be absorbed by a state-owned bank within two to three months, sources with knowledge of the development said.Updated: Feb 08, 2016 23:23 IST
Bharatiya Mahila Bank (BMB) may be absorbed by a state-owned bank within two to three months, sources with knowledge of the development said.
The government may take a call on the merger even before the proposed Bank Board Bureau (BBB) starts operations. The BBB, which will independently oversee consolidation and chalk out business plans for public sector banks, is set to be put in place by April 1, 2016.
Launched in 2013 by the UPA government, BMB currently has 90 branches, and is looking to open 20 more by the end of the current fiscal year.
However, the bank has not been able to make much of a dent in the market. Total advances stood at Rs 446 crore by the end of September 30, 2015, while deposits amounted to Rs 920 crore.
“We are assessing the options (on BMB) and trying to shortlist the banks that can take over BMB... A final decision would be taken by the middle of this year,” an official source who did not wish to be identified told HT.
The government, however, is keen to maintain BMB’s unique identity even after its merger with another lender. Besides, the niche products designed for women will continue. For instance, women borrowers enjoy lower interest rates on several loans. The bank also offers insurance products for women like Nirbhaya — primarily a maternity cover and Sakhee — targeted at the rural women, besides Komal Kali — a recurring deposit scheme for the girl child.
The bank is running without a chairperson since August.
According to earlier reports, the finance ministry was considering a proposal to merge the Delhi-based bank with State Bank of India (SBI), though no decision was taken. When asked about the merger proposal, SBI chairman Arundhati Bhattacharya had said at that time: “I have not been approached on this...I think this is something they are discussing at the Cabinet... Bharatiya Mahila Bank has Rs 1,000-crore capital and their loan book must be Rs 150-200 crore and zero non-performing assets along with very few branches. So it is really a very small entity as of now. So we’ll see.”
“Whatever is to be done needs be done quickly, as the news of the bank merging with another bank has impacted the morale of employees and customers,” said SM Swathi, executive director, BMB.
The last merger among public sector banks was the merger of State Bank of Indore with SBI in 2010.
First Published: Feb 08, 2016 23:23 IST