New Delhi:State Bank of India is in the process of closing down nine more foreign branches after shuttering six such branches as part of rationalising overseas operations, a senior official said on Thursday.
The lender has operations in 36 countries with 190 branches, according to SBI website.
“As part of our foreign branch rationalisation, we have closed about six branches already in the last two years. There are nine more branches under the process to be closed down,” Managing Director (Retail & Digital Banking) at SBI Parveen Kumar Gupta said.
In an interview to PTI, he said capital is generally a constraint for most of the bank sites. “Obviously, you want to use your capital at the place where it is best utilised,” he noted.
Not all the branches in the foreign locations are full-fledged offices, he said, adding that in countries like Bangladesh and South Africa there are some small branches as well as some retail branches and there is need to rationalise them.
Even as the public sector banks (PSBs) have been mandated by the Department of Financial Services to wind-up businesses at unviable locations, SBI itself was looking to rationalise the foreign offices before the order came, Gupta said.
As per the banking sector agenda approved at the PSB Manthan in November last year, state-run lenders were asked to examine all of 216 overseas operations.
“Branch rationalisation is an ongoing process. I think every branch has to justify its existence. So unless it is commercially viable, it doesn’t make sense for us to be operating particularly in foreign locations,” he added.
When asked if closing down branches overseas also means having no operations in those locations, Gupta said SBI will not be exiting such countries. However, it will be closing down small branches or will be merging two-three branches into one.
Besides, given the evolving regulatory environment back home, Gupta said the need to open lot many foreign offices at this point of time is not viable.
“If you see globally, we are already present in the major centres. I don’t think there is any major global centre where we are not present. So the need to go to too many new countries at this point of time is not really felt.”
By March this year, state-owned banks had closed down 35 overseas branches and representative offices as part of the clean and responsible banking initiative, wherein Bank of India, Andhra Bank, IDBI Bank and Indian Overseas Bank closed down Dubai operations; Punjab National Bank, Canara Bank and Union Bank of India shut their Shanghai offices.
Bank of India also closed down operations in Yangoon and Bostwana, while Bank of Baroda and Indian Overseas Bank shut the Hong Kong branch. In addition, PSBs have also closed down various representative offices.
With relation to rationalisation of domestic branches post merger of its six associate banks and the Bharatiya Mahila Bank with itself with effect from April 1, 2017, the SBI Managing Director said that as many as 1,800 branches have been rationalised in the last fiscal.
Besides, 250 offices were also closed down that led to huge cost savings.
“In terms of these 1,800 branches and 250 offices, we have seen about Rs 1,000 crore of savings only in the rental income and other expenses. Over the long run, our expectation is that this merger will definitely be beneficial for the bank,” Gupta said.
In terms of employees’ merger and posting them at right places, Gupta said it took a little bit of SBI’s time, but due to retirement of a lot of personnel as well as voluntary retirement scheme (VRS), there are currently 16,000 less employees than a year ago.
“We are also beginning to see all the savings which could not happen earlier due to duplication,” he added.
On being asked about bank’s plans to open more branches domestically, he said there are plans to open about 300-350 branches in the current fiscal, of which almost half are to be opened in rural areas.
Cabinet clears setting up of centralised GST appellate authority
New Delhi: The Union Cabinet on Wednesday approved setting up of a centralised Appellate Authority for Advance Ruling (AAAR) under the goods and services tax that would decide on cases where there are divergent orders at the state level.
The setting up of a centralised AAAR would require amendments to the GST Acts. The centralised authority as an appellate body will only take up cases wherein the Authority for Advance Ruling (AAR) of two states have passed divergent orders.
The Goods and Services Tax (GST) Council, headed by Finance Minister Arun Jaitley, and comprising state counterparts, in December decided to establish the centralised AAAR.
“The Cabinet has cleared the GST appellate authority,” a source said after the meeting of the Cabinet headed by Prime Minister Narendra Modi.
In view of the confusion created by contradictory rulings given by different AARs on the same or similar issues, the industry had been demanding a centralised appellate authority that could reconcile the contradictory verdicts of different AARs.
Urbanisation to be big driver of Indian economic growth: Kant
Davos: Urbanisation will be a big driver of economic growth in India going forward, supported by favourable macroeconomic factors, accelerated infrastructure building and continuing reforms, NITI Aayog CEO Amitabh Kant said.
Speaking here at an event on sidelines of the World Economic Forum Annual Meeting, he also said the Indian economy may even exceed the IMF growth forecast of 7.5 per cent for the country.
Kant said IMF has forecast 7.5 per cent growth for India despite a gloomy outlook for the global economy and this itself is good, though there are expectations that this estimate would be surpassed. He said India is giving a big push to urbanisation with more than 100 smart cities being developed.
The country is also using technology in a big way to change the way business and governance is done, he added. Besides a massive infrastructure building is happening, bank credit flow has rebounded and macroeconomic factors like inflation and fiscal deficit are also being supportive, Kant said.
DIPP Secretary Ramesh Abhishek noted that states are competing with each other to attract investments and all political parties have adopted the economic reform process. He listed various reform initiatives undertaken in India, including on areas like ease of doing business, FDI, manufacturing and taxation.
They were speaking at Institutional investors’ breakfast roundtable, organised by the industry chamber CII and Kotak Mahindra Bank. Other participants included CII Director General Chandrajit Banerjee and leaders from Indian and foreign companies.
On questions about some persisting issues in doing business including on tax and insolvency related issues, Abhishek said a lot of efforts have been put in to remove all bottlenecks and starting a business doesn’t take more than a day. Besides, special provisions have been made for startups and angel investors, he added.
Kant said efforts are also being made to remove all physical intervention and digitise the entire process of inter-ministerial and inter-department consultations to fast-track the decisions.
India will surpass China, says Raghuram Rajan
Davos: India will eventually surpass China in economic size and will be in a better position to create the infrastructure being promised by the Chinese side in South Asian countries, former RBI Governor Raghuram Rajan said.
Addressing a session on Strategic Outlook for South Asia, Dr Rajan said that the Indian economy would continue to grow while growth rate is slowing down in China.
“Historically, India had a bigger role in the region but China has now grown much bigger than India and has presented itself as a counter-balance to India in the region,” Dr Rajan said at the WEF Annual Meeting 2019.
“India will become bigger than China eventually as China would slow down and India would continue to grow. So India will be in a better position to create the infrastructure in the region which China is promising today. But this competition is good for the region and it will benefit for sure,” he said.
The comments assume significance with China working on a lot of infrastructure projects across the region. In 2017, India became the sixth largest economy with a GDP of $2.59 trillion while China was the second large with a GDP of $12.23 trillion.
At the same session, Nepal PM K.P. Sharma Oli cited collaboration with China as well as India as reasons for the economic growth.