English Quiz for IBPS Clerk 2015 – Set 5

That women in India are much more
financially excluded than the men is evident from the figures as of March 2011.
Only 21 per cent of total bank deposit accounts were held by women and these
accounted for just about 12 per cent of the total volume of deposits.
Similarly, women availed only 18 per cent of the total small credit from banks
in 2011. The problem must be understood in the context of larger issues arising
from the underprivileged status of a woman in India. Finance minister P
Chidambaram has proposed to deal with the financial exclusion of Indian women
by setting up a women’s bank. There are two reasons why the idea is not exciting for some of us. First, merely
setting up an all women bank is not likely to address the core issue of
attitudinal bias against women, which is so prevalent in our banking
institutions. There is both overt and covert exclusion in the system. Second, there
is no guarantee that the all-women bank is going to mitigate the problem of financial exclusion of Indian women. My
scepticism also stems from the
limited success of other previous attempts at focused banking, such as the
setting up of the regional rural banks. In order to assess the likely impact of
the proposed women-only bank, it would be interesting to draw an analogy with
the launching of the regional rural banks in the 1970s. The RRBs were set up in
1976 as special conduits of credit delivery in rural India. They were supposed
to combine the “local feel and familiarity of rural problems with the
professionalism and large resource base of commercial banks”. Thus, there was
an acknowledgment that mainstream commercial banks could not effectively cater
to the needs of the villages, so a new type of locally oriented banks, the RRBs
had to be set up. This is very similar to the proposed women’s bank’s ambition
“to address the gender-related issues of financial inclusion”. On the face of
it, there is nothing wrong in setting up new institutions that target specific
segments of the population. However, we have seen in the case of the RRBs that,
less than ten years into operation, their financial viability became a matter
of concern. Starting from 1981, more than 10 committees were set up to address
various issues (of financial viability, reconstruction and amalgamation,
manpower and human resources and technological upgradation) relating to
operation of the RRBs. Following this, the RRBs went through the process of
recapitalisation and amalgamation so as to make them financially sound. Due to
amalgamation and mergers, some RRBs have become large entities that defeat the
very concept of “locally oriented” banks. Ironically the number of urban and
metropolitan branches of RRBs has increased over the years, while that of their
rural branches has declined. Between 1992 and 2009, there was a 22-percentage
point decline in the proportion of rural bank branches of RRBs while there was
a 16-percentage point increase in the share of their non rural branches. Thus
the creation of “localised rural banks” as a means for tackling the “lack of
familiarity of rural problems on the part of mainstream commercial banks” does
not seem to have served its purpose. In fact, rural India is much more
financially excluded today when compared to the 1990s, both in terms of banking
outlets and availability of institutional credit. Going by this analogy, it
must be asked if the women only bank can promote financial inclusion of India
women unless we address the core
issue of exclusion at a more fundamental level. Attitudinal changes in our
banking system should be an essential and integral part of all our efforts to
promote financial inclusion. Not too long ago, the Rangarajan Committee on
financial inclusion had emphasised the correction of mindsets of the bank staff.
Citing a study conducted in Madhya Pradesh, the committee highlighted that the
“majority of the bank branch managers held negative attitudes towards lending
to (the) poor, although (the) poor, if guided properly, not only succeed as
entrepreneurs but also are good repayers”. There is no doubt that if the poor
happens to be a woman, this discrimination
gets doubled.