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The government today said it will seek Parliament approval for allocation of Rs 1,000 crore for setting Bhartiya Mahila Bank Ltd.
"It is proposed to solicit the approval of the Cabinet to include the allocation of Rs 1,000 crore to the Women's Bank in the first Supplementary to be approved in the current Monsoon Session of Parliament," Minister of State for Finance Namo Narain Meena said in a written reply to the Rajya Sabha.
The initial capital of Rs 1,000 crore for the bank has been so decided that the bank is not capital constrained for expansion of normal business, he said.
He further informed that the government has finalised the proposal to start the Bhartiya Mahila Bank with 6 branches, one each in North, South, West, Central and North Eastern part of the country.
The move to set-up Bhartiya Mahila Bank is aimed at encouraging women in general and women Self-Help Groups (SHGs) in particular, he said.
"A need was also felt to establish the Women's Bank to facilitate access to financial services, promote asset ownership, women entrepreneurship and participation of women in the economic activities to provide impetus to the process of inclusive growth and also their empowerment," he said.
The announcement to set up all Women's bank was made by Finance Minister P Chidambaram in the Budget speech this year.
The proposed bank is likely to be operational by November this year.
Replying to another question, Meena said increase in non-performing assets (NPAs) reduces the income of banks and affects their net profit.
As reported by the Reserve Bank of India, he said Gross NPA and net NPA ratios of all banks were 3.42% and 1.46% respectively as on March 2013.
To improve the health of the financial sector, to reduce the NPAs, to improve asset quality of banks and to prevent slippages, RBI has issued detailed instructions to address the issue of NPA management, he said.
Besides, the government has advised public sector banks to take a number of new initiatives to increase the pace of recovery and manage NPAs, which include appointment of nodal officers for recovery, to conduct special drives for recovery of loss assets, and to constitute a board level Committee for monitoring of recovery, he added.
In a separate response, Meena said, asset quality of State Bank of India (SBI) has been under pressure during the recent past on account of global recession coupled with internal factors, which have adversely affected the performance of corporate as well as SMEs.
"Majority of the problems are structural in nature and are a reflection of the stress in the economy of the country," he added.
