State Bank to shut down 9 foreign branches as part of rationalisation

Source: The Hitavada      Date: 28 Jun 2018 12:22:16


 

 

NEW DELHI

STATE Bank of India (SBI) 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 on Wednesday. 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.In an interview to PTI, he said capital was generally a constraint for most of the bank sites. “Obviously, you want to use your capital at the place where it is best utilised,” he noted.


Not all the branches in the foreign locations were full-fledged offices, he said, adding that in countries like Bangladesh and South Africa there were some small branches as well as some retail branches and there was need to rationalise them.Even as the public sector banks (PSBs) had been mandated by the 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 that SBI would not be exiting such countries. However, it would be closing down small branches or will be merging two-three branches into one. Besides, given the evolving regulatory environment back home, Gupta said the need to open lot many foreign offices at this point of time was not viable.