‘It is not just women, even men don’t know how to handle their money’
MUMBAI: Arundhati Bhattacharya, chairman of the country’s largest lender State Bank of India, spoke to Mint about financial independence and money management for women on the eve of International Women’s Day. According to Bhattacharya, financial independence is paramount for women. When it comes to investments, she believes in a diversified portfolio with a mix of deposits, small savings, mutual funds and exchangetraded funds. Edited excerpts:
How important is it for women to be financially independent?
If you don’t have financial independence, then you don’t have a place in the household to take part in important decisions. If you are dependent, you may not be considered to be a person who can contribute to decisions that can make a big difference. If a woman is financially independent, she can definitely make a bigger contribution in making big decisions. She can pursue her interests too.
It is assumed that many women have a fear of mathematics. Is this a myth or reality?
First, the stereotype that women are not good at math is absolutely misleading and we need to change it.
Second, it is not just women but even men don’t know how to handle their money. The reason is that from childhood, since school level, we don’t teach children about finances. Finance is something that people learn by chance and not by design... The solution lies in giving people financial training from early childhood. Children should be taught in school that you should have all kinds of asset classes in your portfolio. They should be taught what those asset classes are, and their advantages and disadvantages.
What is the process of planning your finances?
We, at SBI, have started a wealth management service aimed at the mass affluent. Currently we have rolled out wealth management services in just four centres. This year we are expecting to roll out across the country. When it comes to money management, you need to first set goals. Then you need to determine your risk appetite—how much risk you can take. If I am young, I can take more risks. If I am about to retire, I can’t take risks. If I am in the middle, I can take a balanced view.
When you invest money, remember that while you are looking for good returns, you must also have some liquidity. Don’t put all eggs in one basket. And last but not the least, don’t spend beyond your means.
Which are the instruments that you suggest for investments?
First, you should have a bank deposit because it offers liquidity. Next, you should definitely have a Public Provident Fund (PPF) account because the tax benefits and the returns you get on it are very good. After that you should look at putting some money into mutual funds. You should also look at having a little gold and also some real estate. You should have money in all of these areas Then more or less you can expect your wealth to grow and not come down over a period of time.
Personally, do you get time to manage your money?
We have a wealth management platform and I am on-board there. I have a manager who looks at my portfolio. Personally, I don’t have the time to see what is happening.