The state-owned banks will close down their non-viable foreign branches, joint ventures and subsidiaries in the aftermath of PNB fraud.
The public sector banks (PSBs) will start rationalising their overseas operations starting with 35 overseas branches, financial services secretary Rajiv Kumar said on Thursday.
As many as 69 overseas branches have been identified for possible consolidation. The move is aimed at bringing down operational costs of the PSBs.
As part of the consolidation move, the banks will rationalise their branches, joint ventures, subsidiaries, representative offices and remittance centres.
"PSBs to consolidate 35 overseas operations without affecting international presence of PSBs in these countries. 69 operations identified for further examination. Move towards cost efficiencies and synergies in overseas market," said financial services secretary in a tweet.
As part of rationalisation of overseas operations, 216 operations will be examined. "Non-viable operations will be closed for cost efficiency and synergy. Operations in the same geographic area will be consolidated. The banks will consolidate equity stake in joint ventures having multiple strategic partners," as per the tweet.
Currently, the public sector banks have about 165 overseas branches apart from subsidiaries, joint ventures and representative offices. Most branches are located in the UK, followed by Hong Kong, UAE and Singapore. State Bank of India has the largest number of overseas branches (52), followed by Bank of Baroda (50) and Bank of India (29).
Reacting to the consolidation move, SBI chairman Rajnish Kumar said that the bank rationalisation has been on the government's agenda. "The banks need to bring down the operational costs. We need to examine whether the volume of business justifies the costs incurred," he said, adding that the regulatory requirements around the world are increasing. However, the SBI will continue to operate in foreign locations, he said.
CUTTING COSTS
- As many as 69 overseas branches have been identified for possible consolidation
- The move is aimed at bringing down operational costs of the public sector banks
- They will rationalise their branches, JVs, arms
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "PSU banks")
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}