Finance ministry asks public sector banks to close loss-making branches
The finance ministry has asked public sector banks (PSBs) to look at rationalising their domestic and overseas branches as part of the reform process to strengthen their financials.
The banks have been advised to pursue closure of loss making domestic and international branches as part of capital saving exercise, official sources said. There is no point in running loss making branches and putting burden on the balance sheet, so banks should look at not only big savings but also small savings like these for improving overall efficiency, people in the know said.
Many banks, including State Bank of India (SBI) and Punjab National Bank (PNB), have already taken initiative. Indian Overseas Bank has also rationalised the number of regional offices in the country by reducing 10 regional offices from existing 59 with an objective of optimum utilisation of resources and reduction in administrative costs.
With regard to overseas branches, the ministry has asked the lenders to discuss consolidation and take a final call on closing some unviable operations.