Against the growing cost rationalisation, the State Bank of India (SBI) has been seen shutting down many of its branches in the country. Around 30 per cent of its branches will be seen closing completely, relocating or even consolidating.
Following the advice given by the global management consultant McKinsey, the State Bank Of India has taken this step in order to step up its game in the competitive market.
SBI MD Rajnish Kumar had told ET, “We had engaged McKinsey for the branch and ATM optimisation and customer enhanced experience programme. We have also engaged Accenture Financial services to draw up a plan on our InTouch branches.”
This bank which owns around 24,000 branches under the SBI Group was seen shutting down or relocating over 400 branches and had considerably lengthened to add more branches.
“Going forward we need to be present where we need to. With the associate banks now coming in, there will be a scope for branch rationalisation on a much larger scale.” as said by Kumar to ET.
Statistically, while SBI had an evidence of adding 1,053 branches in FY14, this number was seen to be diminishing to 464 in FY15.
Kumar further added, “Cost savings will definitely happen, otherwise why (would) you merge unless you can take benefit out of that synergy.” In the context, that SBI will be seen merging with five important associate banks and put all its five subsidiaries in the perspective- State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank Of Mysore and the State Bank of Hyderabad.
Kumar stated that there have been many occurrences where SBI was seen having 5-6 bank branches with 50 meters to 1 km radius, and then the bank was seen consolidating them on the basis of the business the branch was capable of generating. However, now, the bank has not yet arrived at how much costs it will be saving.
Tags: SBI State Bank of India
