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

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