SBI trims branch network to slash costs

Mumbai: As part of the cost cutting exercise, State Bank of India (SBI) is cutting down the number of branches by 30 per cent by relocating and consolidating few branches.

SBI has around 24,000 branches under SBI Group and taken up cost rationalisation plan as per the advice global management consultant McKinsey. The cost control mechanism is aimed at transforming the public sector banking major into competitive organization.

According to a story by The Economic Times, SBI had appointed Mckinsey for branch and ATM optimisation and customer enhanced experience programme.
With an objective of cost cutting, SBI has already closed down or relocated over 400 branches. It has slowed down in adding more branches. SBI added 1,053 branches in FY-14 that number fell to 464 in FY-15.

SBI is also in the process of merging its five associate banks -- State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad.

SBI is also in the process of merging its five associate banks -- State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad.

With this merger, SBI foresees a scope for branch rationalisation on a much larger scale.
There are several places where SBI had 5-6 bank branches within 50 metres to 1 km radius. The bank would consolidate them depending on the business the branch generates. The bank has not arrived at how much costs it will save. The merger will offer a greater synergy to SBI and help reduce costs.