In a move to reduce the number of loss-making branches, Punjab National Bank (PNB) has decided to either shut down, merge or relocate more than 200 branches located across India.
As part of its consolidation plan, the bank decided to either shut down, amalgamate or relocate 200-300 of its loss-generating branches over the next 12 months.
According to a senior official of PNB, the bank has identified 200-300 branches, which have been consistently making losses. They’ve already closed two to three branches and the rest they are planning to close in the coming months. They are preparing a plan which defines whether to close down the identified branches, merge them, renovate them or relocate them to other places, he added.
The bank is eventually trying to adjust its business strategy in such a way that it helps them transform loss-making entities into profit-generating branches.
A team of senior officials has been appointed to conduct a detailed study and define strategies for branch network rationalization.
According to the lender, the need for large-scale expansion of bank network has been reduced as banks are able to enhance their outreach by expanding their business correspondent (BC) outlets and business centres.
PNB currently has more than 8,224 BC outlets and 9,753 ATMs, while the number of branches reduced to 6,940 after shutting down six branches in the second quarter.
The Reserve Bank of India (RBI) recently revised the banking outlet policy, according to which, banks are given more freedom to open, relocate, and close down their branches. The end focus, however, should be on providing better financial services to the customers. They can achieve the same either through regular branches or by opening more BC outlets, said RBI.
On existing banking outlets, RBI mentioned that except for the outlets in rural and semi-urban areas, banks are free to close, merge or relocate all the outlets at their sole discretion.
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