Public sector banks on branch expansion spree

BL : NSVageesh&Vinayak :10 july 2012

Some 5,000 branches added in 2011-12; five banks account for about half the number

MUMBAI/MANGALORE, JULY 9: 

Public sector banks are coming ever closer to you. Just in case you haven’t noticed, you may find another new branch opening shortly in your neighbourhood. Never mind all the talk about more ATMs or improved Internet banking. Brick and mortar is very much in.

Public sector banks (PSBs) added about 5,000 branches in 2011-12. That should benefit an estimated seven crore customers in the country.

About half the new branches (around 2,500) were added by just five banks — State Bank of India, Bank of Baroda, Bank of India, Punjab National Bank and Indian Overseas Bank.

Banks have been on a branch expansion spree over the past few years with the number inching up every year. In 2006-07, they had opened a little over 1,500 branches while in 2008-09, the year of the global banking crisis, they opened nearly 2,400 branches.

Currently, there are over 65,000 public sector bank branches in the country. That number could again shoot up this year if early indications of branch expansion plans are anything to go by.

Many banks have announced plans to open more branches. Allahabad Bank, for instance, plans to open 250 branches this fiscal, more than double of what it did last year. Similarly, Corporation Bank plans to open 300 branches this year compared to 139 last fiscal.

New branches are opened by some banks to acquire a ‘pan-India’ presence. Although owned by the Government, PSBs have had their special pockets of influence and regional biases owing to their private sector origins.

That is now being evened out as banks venture consciously into States and territories outside their comfort zone.

The pressure of competition and good business opportunities, thanks to new residential colonies and industrial parks springing up in various States, have seen banks expanding their network.

Recently, the Reserve Bank of India relaxed the norms for branch licensing and encouraged banks to open more branches in tier-2 centres (cities and towns with a population of between 50,000 and 1,00,000).

Despite these efforts, the penetration of banking services in the country is still low.

An average branch services around 13,000 customers, indicating the demand for services and the potential still available. Nearly 60 per cent of the population does not have access to banking services, according to RBI reports.

India Inc wants economic revival package; meets Rangarajan

The Chairman, Economic Advisory Council to the Prime Minister, Dr C. Rangarajan; 


with the CII President, Mr Adi Godrej; the CII Director-General, Mr Chandrajit Banerjee; 


the Chairman, DSCL Group, Mr Ajay Shriram; and the Vice- Chairman, Toyota 


Kirloskar Motors, Mr Vikram Kirloskar; at a meeting in the Capital on Monday. -- 


Ramesh Sharma


BL :10 July 2012

India Inc has approached the Prime Minister’s Economic Advisory Council (PMEAC) to improve the perception about India as an investment destination.

With this objective, representatives of at least four chambers, including CII, Assocham, Phdcci and the Southern Chamber of Commerce and Industries, met the PMEAC Chairman, Dr C. Rangarajan, here on Monday.

During the deliberation, the CII President, Mr Adi Godrej, said, “The economy and particularly the industry need a set of immediate measures for revival of growth. The macro economic conditions are worsening at a faster pace than anticipated and we need to stem this at this stage. I am requesting that an ‘Economic Revival Package’ be announced by the Government and RBI in close coordination.”

Pointing out that he was mindful of the compulsions of coalition politics, Mr Godrej said that the current fiscal situation poses limitations to what the Government can do compared to the situation in 2008-09.

But Dr Rangarajan has turned down the industry demand for a stimulus package saying that current fiscal situation does not allow this.

“Unfortunately, that makes it even more imperative that such a package be announced now, since a few months down the line the economy would probably go beyond the threshold,” he added.

Pitching for spearheading the process of reforms, the Assocham President, Mr Rajkumar Dhoot, felt that this would help arrest India’s falling economic growth, widening current account deficit, increasing short-term debt and public finance management which are posing serious challenges to the domestic economy.

“All the aspects of a policy process must be dealt with in a single window approach and the administrative processes involved in the implementation of Government policies need to be simplified and made coherent to result in minimum compliance burden,” he suggested.

After the meeting, Mr Godrej said that they pressed for early introduction of GST, fast tracking of foreign direct investment in insurance, aviation and multi-brand retail. Above all the perception of India needs to improve especially after GAAR and retrospective amendment.

In continuation of the consultation process, Dr Rangarajan is scheduled to meet financial sector representatives on Tuesday