Paving the way for setting up of all-women bank , the government on Thursday approved Rs 1,000-crore seed capital for Bhartiya Mahila Bank Ltd.
The Cabinet cleared setting up of all-women bank, sources said.
Earlier this week, Minister of State for Finance Namo Narain Meena had said in a written reply to the Rajya Sabha that "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".
The proposed bank will be headquartered in New Delhi. It will start with 6 branches in North, South, West, Central and North Eastern part of the country.
The bank is expected to become profitable in five years of its operation.
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 had said.
The move to set up Bhartiya Mahila Bank is aimed at encouraging women in general and women self-help groups (SHGs) in particular, he had 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.