SBI on a rationalization spree: Continues to shut down its foreign offices

State Bank of India which is a well renowned Public sector and financial services company is planning to shut nine of its offices in few foreign locations. According to Praveen Gupta, Managing Director, Retail and Banking said that the decision is taken as part of rationalization of overseas operations.

SBI which is marked as the country’s highest lender has its operations spread over 36 countries with closely 190 branches. During the last two years the company has already closed its six branches as they were not performing commercially well. “Branch rationalization is an ongoing process. According to me every branch should justify its existence. So, it does not make any sense for us to keep operating the branches in foreign locations if it is not commercially viable”, Gupta told reporters.

Gupta further revealed that the bank’s last year’s November agenda included the move to re-look the foreign operations. Public lenders were ordered to inspect their 216 overseas operations and shut down which were not commercially feasible. Branches like in Bangladesh and South Africa are small with no full-fledged offices and thus need to be rationalized.

Around 35 overseas branches and representative offices were shut down by the state-owned banks as a part of clean and responsible banking initiative. Dubai operations were shut by Bank of India, IDBI bank, and Andhra bank. Punjab National bank, Canara bank and Union bank had shut down their Shanghai operations. Other than this, Bank of Baroda closed its office branch in Hong-Kong and Bank of India had to shut down its operations in Yangon and Botswana.

With affect from 1st April 2017 and with relation to the rationalization of domestic branches post-merger of its six associate banks and the Bhartiya Mahila bank. Almost, 1800 branches were rationalized during the year and 250 other offices were also shut down which led to huge cost saving according to the SBI Managing Director.