Ministry of Finance has suggested branch swaps for state-run banks as a possible measure to bring down costs and improve operational efficiency. CNBC-TV18 learns that three large lenders are currently mulling such swaps including Union Bank of India, Syndicate Bank and Oriental Bank of Commerce.
Many public banks have a concentration of branches in some pockets, and are weaker in other areas where another bank may have a larger concentration. In such a case, the idea is to get them to redeploy branches to bring down costs and avoid duplication of efforts, such that the swap is mutually beneficial.
In this case, Union Bank, for instance, is eyeing more branches in Punjab, Haryana and Gujarat and has excess branches in East UP and Kerala, which it may give up.
Similarly, Syndicate Bank requires more branches in UP and may give up branches in southern India. OBC has a stronger presence in Northern India, and may swap them for more branches in the southern region.
Sources have told CNBC-TV18 that these branch swap talks are at a very early stage of discussion and are currently being discussed internally as one of the possible steps to reduce costs. The final plans for branch swaps may only be finalised in the coming months. Each of the banks will be looking for similar size of business from each branch such that there is no loss in swapping.
Emailed queries from CNBC-TV18 to Union Bank, OBC and Syndicate Bank remained answered.
No comments:
Post a Comment