Ad Here  
June
July
August
September
October
November
 
 
Banking in Telangana Perhaps small is more beautiful than big! Financial inclusion vs unclaimed deposits From lazy banking to easy banking Good, bad and ugly United India Insurance - Rs 110 crore losses have been claimed till now due to floods in Tamil Nadu Rationalised New bank licences, at last... Capital base of regional rural banks raised The paradox: clamour for the Goliath and David Growing volume of stressed assets… Reaching out: is it slowing down? Thirty more cities seek to become SMART LVB- A supermarket of financial services Bottomlines shrink, bad loans rise... Emerging crisis It’s a war on black money, support it. Greet Lakshmi the banking robot Small finance banks offer high interest rates Reaching the Unreached… Grows Bigger Hesitancy in announcing year-end results Holy or unholy? How okay are new banks? Nothing much can happen…. Bank deposits account for 46.3 per cent of household savings Banking on Risk A development bank for BRICS Anytime banking to anywhere banking Two banks: their jubilees and performances Just 660 days! Target over-ambitious... Cautious and considerate Drop in SLR- sparing lendable resources Small finance payment banks... Fund healthcare clinics in villages... Needed a Banking Atlas Why priority status? What is the priority – mergers or NPA reduction? Merger mania haunts banks Big bank merger, bigger expectations Who is the real beneficiary? A bank for women, by women The collaboration suite of cyber criminals Mega merger is on Drastic decline in asset quality Indian customers are tech savvy Ferrying digital banking to Lakshadweep How ‘secure’ are the secured loans? Small is ‘more’ beautiful Cut in repo rate – lower than expected Cradle of banks to a smart city... A new development bank rising in the east… All that glitters is not gold... Too big to fail and too small to sail Governance in Reverse Gear? Why any time money? Monetary policy continues to adopt dis-inflationary path Stage set for Indian ‘avatar’ of foreign banks Banking overhauling or reorganisation? Aadhaar, niraadhaar and banking Well-lived... Payment banks have arrived New capitals of Migrant banks Lacklustre credit expansion Ernakulam excels... Targets continue to be ad hoc Insatiable appetite for credit Another route for achieving financial inclusion One down in private sector Growing gainfully Smart banking in smart cities Managing NPAs...
 
Reaching out: is it slowing down?
The merger of five associate banks of State Bank of India and Bharatiya Mahila Bank with SBI is likely to dampen the expansion efforts. In the process of rationalisation, some branches of the associate banks are likely to be merged.

The total number of bank branches increased from 70,189 in June 2006 to 1,34,014 in June 2016. During those ten years the number thus almost doubled. Besides increasing the brick and mortar outfits, a new form of branchless banking was encouraged. 

However, in the last couple of years, the pace of growth slackened perhaps due to the growth of stressed assets and the shrinkage of the bottom lines. The decline in starting new branches started after 2013-14. The number of new offices reduced drastically from 10,269 that year to 7557 in 2014-15. There was a further drop to 5992 a year later.

With the wide variations in the size, heritage and age of various banks as well as the factors contributing to their entry into banking, there is no uniformity in their attitude towards spatial expansion. Like the State Bank, India’s biggest bank has always been in an expansion mode. It is omnipresent and is now planning to absorb five of its subsidiaries. Hopefully,  in the process of merger, the number of branches will not be slashed.  In the strategy of reaching out to the unreached, namely those who are still outside the reach of banks, reducing the number of existing branches would be a retrograde step.

Public sector banks, which account for 49 per cent of the total branch network do not exhibit enthusiasm in opening more branches. Even the private sector banks, whose share in the current branch network is not more than 16 per cent, are not willing to play ball. They are investing more on the digitisation of banking operations.            

Recently a new species called small finance banks entered into business. They have started opening branches. It may take longer time for them to have a sizeable number. Their contribution to the banking sector’s efforts of reaching out would not be significant in the short run. Bigger and older banks, have to expand their branch network to keep alive the process of reaching out. 

 

Closure of branches...

The recent merger of five associate banks of State Bank of India and Bharatiya Mahila Bank with SBI is likely to dampen the expansion efforts. In the process of rationalisation, some branches of the associate banks are likely to be merged. It is probable that over 1500 branches may get closed. How long it would take for them to open another 1500 branches is an imponderable question. There could be a significant number of unemployed bankers, despite the initiation of the VRS. Small finance banks and payment banks cannot absorb these bankers.

Author :
Reported On :
Sector :
Shoulder :
RELATED NEWS
ABOUT IE
IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
Read more
 
PRIVACY POLICY
Economist Communications Ltd is committed to ensuring that your privacy is protected.
Read more
TERMS AND CONDITIONS
You agree that your use of this Website and the purchase of the magazine will be governed by these terms and conditions.
Read more
 
CONTACT US
S-15, Industrial Estate,
Guindy,
Chennai - 600 032.
PHONE: +91 44 22501236
EMAIL: indecom1968@gmail.com