New Delhi: The State Bank of India (OSE) has closed six branches abroad and is in the process of closing another nine branches as part of the streamlining of operations abroad, said executive director Pravin K. Gupta.
SBI, the country’s largest lender, has operations in approximately 36 countries with almost 190 branches.
“Capital is usually a limitation for most of the bank’s sites, Obviously, you want to use your capital in the place where it is best used.” So, as part of our rationalization of branches abroad, we have already closed about six branches. in the last two years, there are nine more branches in the process that will be closed, “Gupta told PTI in an interview.
Not all branches abroad are full-fledged offices, he said, adding that in countries like Bangladesh and South Africa there are some small branches, as well as some retail branches, and there is a need to rationalize them. Even when public sector banks were mandated by the financial services department to liquidate businesses in unviable locations, SBI itself was looking to rationalize overseas offices before the order arrived, Gupta said.
According to the banking sector agenda approved by PSB Manthan in November last year, public sector banks (PSB) were asked to examine the 216 operations abroad.
“The rationalization of branches is a continuous process, I think each branch has to justify its existence, so unless it is commercially viable, it does not make sense that we are operating particularly in foreign places,” he added.
When asked if closing branches abroad also means not having operations in those locations, Gupta said SBI will not leave those countries. However, it will close small branches or merge two or three branches into one.
In addition, given the evolving regulatory environment in the country, Gupta said the need to open many foreign offices at this time is not viable. “If you see globally, we are already present in the main centers.” I do not think there is any important global center in which we are not present. So the need to go to too many new countries at this time is not really felt. ”
By March of this year, state banks had closed 35 branches and representative offices abroad as part of the clean and responsible banking initiative. Where, the Bank of India, the Andhra Bank, the IDBI Bank and the Indian Overseas Bank closed the operations of Dubai, the Punjab National Bank, the Canara Bank and the Union Bank of India closed their offices in Shanghai. The Bank of India also closed the operations in Yangoon and Botswana, while the Bank of Baroda and the Indian Overseas Bank closed the Hong Kong branch.
In addition, the PSBs have also closed several representative offices.
With regard to the rationalization of the national branches after the merger of its six associated banks and the Bharatiya Mahila Bank with it as of April 1, 2017, the managing director of the OSI said that up to 1,800 branches have been rationalized throughout the year . In addition, 250 offices were closed that allowed great cost savings.
“In terms of these 1,800 branches and 250 offices, we have seen approximately Rs1,000 crore savings only in rental income and other expenses.In the long term, our expectation is that this merger will definitely be beneficial to the bank,” he said. Gupta
Regarding the merger of employees and their publication in the right places, Gupta said that it took SBI some time, but due to the retirement of a large number of staff and a voluntary retirement plan (VRS), there are currently 16,000 fewer employees than a year ago. “We are also starting to see all the savings that could not happen before due to duplication,” he added.
When asked about the bank’s plans to open more branches in the country, he said there are plans to open around 300-350 branches in the current fiscal year, of which almost half will be opened in rural areas.