Why are Indian Banks Closing Overseas Branches ?

Indian Banks have closed 37 Overseas branches till date and another 60 – 70 branches are under review. This article gives an overall summary of Indian banks presence internationally, reason for reducing number of branches and bankwise update on branches closed or in process of closing.

Summary of Indian Banks Presence Internationally

Formation Number of Locations Remarks
Overall Presence 302 State Bank of India : 92
Bank of Baroda : 70
Bank of India : 38
Rest others
Branches * 185 United Kingdom : 32
Hong Kong : 13
UAE : 13
Singapore : 12
Rest others
Subsidiary 26 Data does not include branches of subsidiaries
Joint Venture Bank 8
Representative Office 48
Other Offices 35 Electronic Banking Service Unit; Extension Counter; Indian Visa Centres; Marketing office; Sub office; Remittance centre; Regional Head Office

41 branches were in loss in the financial year 2016-17

Rationalisation of Overseas Operation of PSBs

Public Sector Banks (PSBs) Manthan was held on November 11-12, 2017 in which below recommendations were made related to overseas operations of nationalized banks.

AP-14. Rationalise overseas operations within and across PSBs for cost &  efficiencies and synergies in overseas markets:

(a) Based on competitive strength and viability

(b) Draw up Business-Unit-wise Board-approved plan, for time-bound closure/consolidation as per due procedure, to:

(i) Close non-viable branches;

(ii) Consolidate operations in the same geography, taking into account operations of other PSBs; and

(iii) Consolidate equity stake in joint venture having multiple PSB partners

Impact on Buyers Credit & Suppliers Credit

  1. Less number of branches, means less competition. Overall costing of transaction will go up.
  2. Over a period of time, branches had their niche in market. Like there are few branches dealing only in small ticket transaction (< $1 lac). With closure of any of these niche branches, it will become difficult for arranging funds for small ticket transactions.

Bankwise update on Closure / Merging of Overseas Branches

State Bank of India Overseas Branches Latest Update

Overseas Location Closure Date
SBI Paris Branch 30 September 2018
SBI Tianjin (China) Branch 30 September 2018
SBI Jeddah (Saudi Arabia) Branch 30 June 2018
SBI Muskat (Oman) Branch 31 March 2019
SBI Jaffna (Sri Lanka) Branch 30 September 2018
State Bank of India (Botswana) Ltd 31 March 2019
SBI London Converted Into Subsidiary

Reference: DNA Article

Bank of India Overseas Branches Latest Update

Overseas Location Status
Bank of India Bostwana Subsidiary To Be closed
Bank of India Myanmar (Yangon) Representative Office To Be closed
Bank of India Phnom Penh Branch, Cambodia To Be closed
Bank of India, Shenzhen Branch, China To Be closed
Bank of India Kisumu Branch, Kenya To Be closed
Bank of India Jersey Branch, Channel Islands To Be closed
Bank of India Beijing Representative Branch, China To Be closed
Bank of India Manchester Branch, UK To be Merged with Birmingham Branch
Bank of India Eastham Branch, UK To be Merged with London Branch

Reference: Business Today, The Hindu Line

Canara Bank Overseas Branches Latest Update

Overseas Location Status
Canara Bank Shanghai Branch Merging with Canara Hong Kong Branch
Canara Bank Bahrain Branch Merging with Canara Dubai Branch
Canara Bank Leicester Branch Merging with Canara London Branch
Canara Bank Russia (Joint Venture) Selling to SBI Russia
Canara Bank Johannesburg Branch Closing Down

Reference: Rediff.com

Bank of Baroda Overseas Branches Latest Update

Overseas Location Closure Date
Bank of Baroda Hongkong Branch To be closed
Bank of Baroda South Africa Branch Closed
Bank of Baroda Nassu Branch, Bahamas 6 July 2018
Bank of Baroda Mutrah Branch, Oman Merged with Greater Mutrah Branch
Bank of Baroda Bahrain Branch 28 June 2018
Bank of Baroda UK Branches Formation of subsidiary at UK viz. Bank of baroda (UK) Ltd. is at advanced stage and necessary approval has been received from Prudential Regulatory Authority

Reference: BSE IndiaEconomic Times ArticleBusiness Today,

Indian Overseas Bank Overseas Branches Latest Update

Overseas Location Status
IOB Dubai Branch To be closed

Reference: Business Today

IDBI Bank Overseas Branches Latest Update

Overseas Location Status
IDBI Dubai Branch To be closed

Reference: Business Today

Punjab National Bank Overseas Branches Latest Update

Overseas Location Status
PNB Sydney Representative Office Looking to Close
PNB Dhaka Representative Office Looking to Close
PNB Dubai Representative Office Looking to Close
PNB Shanghai Representative Office Looking to Close
PNB Kowloon Branch 17 August 2018

Reference: Money Control, First Post

Union Bank of India Overseas Branches Latest Update

Overseas Location Status
Union Bank of India Shanghai Representative Office Closed

Reference: Business Today

Andhra Bank Overseas Branches Latest Update

Overseas Location Status
Andhra Bank Dubai Branch Closed

Reference: Business Today

Allahabad Bank Overseas Branches Latest Update

Overseas Location Status
Allahabad Bank Hong Kong Branch To be closed

Reference: Economic Times

UCO Bank Overseas Branches Latest Update

UCO Bank to merge branches in Hong Kong 

Reference

  1. RBI : Country-wise branches of Indian Banks at Overseas Centres as on January 31, 2018
  2. Responsive & Responsible PSBs Banking Reforms Roadmap for a New India

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