BRANCH BANKING | Cesar Tordesillas, India

India's public sector banks continue expansion spree

India's public sector banks added about 5,000 branches in 2011-12, estimated to benefit seven crore customers in the country.


Just five banks — State Bank of India, Bank of Baroda, Bank of India, Punjab National Bank and Indian Overseas Bank--added about half of the new branches.

Banks have been on a branch expansion spree over the past few years with the number increasing every year.

In 2006-07, they had opened a little over 1,500 branches while in 2008-09, the year of the global banking crisis, they opened nearly 2,400 branches.

Currently, there are over 65,000 public sector bank branches in the country with many banks have announcing plans to open more branches.

Allahabad Bank plans to open 250 branches this fiscal, more than double of what it did last year, while Corporation Bank plans to open 300 branches this year compared to 139 last fiscal.

Recently, the Reserve Bank of India relaxed the norms for branch licensing and encouraged banks to open more branches in tier-2 centres--cities and towns with a population of between 50,000 and 1,00,000.

Despite these efforts, the penetration of banking services in the country is still low.

An average branch services around 13,000 customers, indicating the demand for services and the potential still available. Nearly 60 per cent of the population does not have access to banking services, according to RBI reports.

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