Vastavam web: State Bank of India is in the process of closing down nine more foreign branches after shuttering six such branches as part of rationalising overseas operations, a senior official said today. The lender has operations in 36 countries with 190 branches, according to SBI website. “As part of our foreign branch rationalisation, we have closed about six branches already in the last two years. There are nine more branches under the process to be closed down,” Managing Director (Retail & Digital Banking) at SBI Parveen Kumar Gupta said. Department of Financial Services to wind-up businesses at unviable locations, SBI itself was looking to rationalise the foreign offices before the order came, Gupta said.
As per the banking sector agenda approved at the PSB Manthan in November last year, state-run lenders were asked to examine all of 216 overseas operations. “Branch rationalisation is an ongoing process. I think every branch has to justify its existence. So unless it is commercially viable, it doesn’t make sense for us to be operating particularly in foreign locations,” he added.When asked if closing down branches overseas also means having no operations in those locations, Gupta said SBI will not be exiting such countries. However, it will be closing down small branches or will be merging two-three branches into one.
By March this year, state-owned banks had closed down 35 overseas branches and representative offices as part of the clean and responsible banking initiative, wherein Bank of India, Andhra Bank, IDBI Bank and Indian Overseas Bank closed down Dubai operations; Punjab National Bank, Canara Bank and Union Bank of India shut their Shanghai offices. Bank of India also closed down operations in Yangoon and Bostwana, while Bank of Baroda and Indian Overseas Bank shut the Hong Kong branch. In addition, PSBs have also closed down various representative offices. With relation to rationalisation of domestic branches post merger of its six associate banks and the Bharatiya Mahila Bank with itself with effect from April 1, 2017, the SBI Managing Director said that as many as 1,800 branches have been rationalised in the last fiscal.
In terms of employees’ merger and posting them at right places, Gupta said it took a little bit of SBI’s time, but due to retirement of a lot of personnel as well as voluntary retirement scheme (VRS), there are currently 16,000 less employees than a year ago. “We are also beginning to see all the savings which could not happen earlier due to duplication,” he added.