State-owned Union Bank of India has
decided to quit Antwerp diamond hub in Belgium as the branch did not generate
expected business, a senior bank official said.
The finance ministry had advised all
the public sector banks to review their overseas business and close branches
which are not profitable as part of strategy to conserve capital.
According to the official of Union Bank of India, the bank has already filed for the closure of the branch and
process related to shutting the office is being followed. Accounts are being transferred and
manpower is also being relocated as part of closure process, the official said.
The bank opened this branch in
Belgium in June, 2014.
Banks have become very cautious with
regard to diamond finance after the country's biggest fraud of about Rs 14,000
crore perpetrated by diamond jeweler Nirav Modi. In February, Nirav Modi and
Mehul Choksi were implicated in an alleged USD 2 billion fraud, involving the
use of fake guarantees from Punjab National Bank to solicit loans that rocked
the banking industry.
Many other public sector banks
(PSBs) plan to close or rationalise about 70 overseas operations during the
current fiscal. These banks have already closed down 35 foreign operations last
year.According to the data, 165 branches
of PSBs are operating in foreign countries, of which 41 branches were in losses
in 2016-17.
The country's largest lender State Bank of India (SBI) led the pack with nine of its overseas branches in the red.
It was followed by Bank of India and Bank of Baroda with eight and seven
branches, respectively. As on January 31, 2018, PSBs had about 165 overseas
branches, besides subsidiaries, joint ventures and representative offices.
State Bank of India has the largest
number of overseas branches (52) followed by Bank of Baroda (50) and Bank of India (29). The state-owned banks have the largest number of branches in the UK
(32) followed by Hong Kong and the UAE (13 each) and Singapore (12).
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