NEWS & ADVICE : HOME LOANS
Branch banking diminishing in presence
By Joseph Samson
Aug 23, 2010
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With more and more technology getting embedded into the banking arena, the usage of branches are reducing. Banks can now cut on the cost incurred as rentals and then utilize it elsewhere.

Bank of Baroda has done so by surrendering more than 2 lakh sq ft of space rented in the last two years.

"Wherever the space available is abnormally large, we are surrendering a part of it," says M D Mallya, chairman and managing director, BoB.

The country's largest lender, the State Bank of India (SBI), too, is looking to shrink branch space and re-deploy the excess space.

"We have redeployed space and given away the excess space in a branch for other purposes like back office," says SS Ranjan, chief financial officer, SBI.

Similar is the case with Andhra Bank. The bank had some time back needed 2000sq ft area to open a branch which has now been reduced to 1000-1200 sq ft requirement.

"Functions like maintaining records and books manually have been shifted to data and clearing centres," says Anil Girotra, executive director, Andhra Bank.

"We implemented core banking system, due to which the area required for a branch got reduced. Now we need much lesser space," says K R Kamath, chairman and managing director, Punjab National Bank.

"The footfalls in bank branches in the cities have come down on account of more and more people using alternate channels for banking transactions. One can see the number of people required in front office is reducing, while back office is increasing," says a top official from Indian Banks' Association (IBA).

"Banks like SBI had spare capacity, so probably they are deploying that. It is not the case with us," says Paul Abraham, chief operating officer, IndusInd Bank.


 


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