SBI associates suggest branch-swap strategy

Mumbai: The seven associate banks of State Bank of India (SBI) have proposed a branch-swap strategy in an effort to reduce their cost of operations and to enable the banks to focus on their individual regional strengths.

All the associate banks have branches outside their home state. For example, State Bank of Bikaner and Jaipur (SBBJ) has 200 out of its 800 branches located outside Rajasthan. State Bank of Travancore (SBT) has several branches outside Kerala.

Thus, if SBBJ has a branch presence in Kerala and SBT has some branch presence in Rajasthan, the two banks can enter into a swap arrangement, whereby SBBJ takes over the branches of SBT in Rajasthan and vice-versa.

SBBJ managing director N K Puri says each bank could take over the assets and liabilities of the other bank in its account books, bypassing a book entry.

The associate banks would thus be able to focus and leverage their strengths on their particular regions through this process. Around 50 such branches per bank could be rationalised through this process, amounting to a total of 350 branches that could be rationalised.