Planned rationalisation of operations and examination of a total of 216 overseas operations of PSBs was undertaken last year.
Rationalisation of overseas banking operations will continue this year as public sector banks (PSB) are working on either shutting or rationalising about 69 overseas operations in the coming months to drive cost efficiency, PTI reported.
Planned rationalisation of operations and examination of a total of 216 overseas operations of PSBs was undertaken last year, said sources quoted by PTI. Out of that, as many as 35 overseas operations were shut and 69 are under process or being considered for rationalisation, sources said.
While unviable foreign operations are being shut, multiple branches in same cities or nearby areas are being rationalised, sources added.
PSBs had around 165 foreign branches apart from subsidiaries, joint ventures and representative offices as on January 31, 2018. Country’s largest lender SBI has the biggest overseas presence with 52 branches followed by 50 branches of Bank of Baroda and 29 of Bank of India.
32 branches in the UK is the maximum number by state-owned banks even as Hong Kong and the UAE, each have 13 such branches while Singapore has 12 branches.
SBI topped the list of loss-making branches in 2016-17 with a total 9 such branches followed by 8 branches of Bank of India and 7 of Bank of Baroda. Overall, 41 branches were loss-making in the year.
The rationalisation drive came in effect following the banking sector agenda announced at the PSB Manthan (a meeting held between senior PSU bank executives and the government) November 2017, according to which banks have to rationalise their overseas operations for cost efficiencies and synergies in overseas markets, based on competitive strength and viability.
All PSBs including Allahabad Bank, Bank of Baroda, Bank of India, Canara Bank, etc., with foreign presence, took the initiative to prepare a note in mutual consultation for rationalisation these branches.
The rationalisation drive gains significance in the light of jewellery designer Nirav Modi allegedly cheating Punjab National Bank to the tune of Rs 12,700 crore in connivance with PNB staff and officials of overseas branches of other state-owned banks.