NEWS & ADVICE : FIXED DEPOSITS
PSU Banks act to control overhead costs
By Neelima Shankar
Jun 10, 2010
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Public sector banks are acting hard to cut their expenses in order to overtake their private sector rivals.

The Q4 results of the fiscal last ended was an indicator that their bottomlines are under pressure.

These banks are therefore looking forward to cost cutting so as to improve their profits and also arrive at a base rate which is competitve to sustain in the market.

The country's largest lender, State Bank of India has decided that it would curtail costs on miscellaneous activities like travel, stationary and phone bills, to last year's levels.

Bank of India has plans of dipping overhead costs by 20%.

Union Bank of India has plans of complete organizational restructuring wherein the bank would be abolishing zonal offices and also the post of field zonal officer.

A comparative analysis of cost to income ratios of public and private sector banks shows that while while ICICI bank reduced its cost to income ratio by 4.6 per cent in a year, SBI saw an increase of 6 per cent.

Axis bank's efficiency improved by almost 2 per cent where as Bank of India showed a rise of 7 per cent in the ratio.


 


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