Bank of Baroda(BoB) to shut three foreign branches by June

State-owned Bank of Baroda will close down three overseas branches in Africa by June.The bank in a regulatory filing said that as per the government guidelines for rationalisation of overseas presence, increase in efficiency and profitability of the overseas offices, it will close down branches in Guyana, Trinidad and Tobago and Ghana by June 30, 2019.

The three branches contribute less than a percentage each to the bank's consolidated business.Revenue from Ghana business stood at Rs 75.31 crore, Trinidad and Tobago Rs 23.90 crore and Guyana Rs 26.38 crore, the bank said without specifying the period during which the revenue was generated from these entities.

Rationalisation of public sector bank (PSB) branches is part of the government's initiative, approved on November 2017 as clean and responsible banking initiative.

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 United Kingdom (32) followed by Hong Kong and the UAE (13 each) and Singapore (12).

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Union Bank of India decided to quit one foreign branch

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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PSU banks plan closure of overseas offices this year

Public sector banks are in the process of closing or rationalising about 70 overseas operations as part of capital conservation exercise. Unviable foreign operations are being shut while multiple branches in same cities or nearby places are being rationalised with a view to achieving efficiency, sources said. As part of this exercise, public sector banks plan to close or rationalise about 70 overseas operations during the current fiscal, sources said.

Public sector banks (PSBs) closed down 35 foreign operations last year. According to the data, 159 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).

According to the banking sector agenda, approved at the PSB Manthan November last year, banks have to undertake rationalisation of overseas operations for cost efficiencies and synergies in overseas markets, based on competitive strength and viability, and a differentiated banking strategy to leverage bank’s competitive advantage, which may include branch network rationalisation for a strong regional connect.

All PSBs such as Allahabad Bank, Bank of Baroda, Bank of India, Canara Bank, IDBI Bank, Indian Overseas Bank, Punjab National Bank, State Bank of India, and Union Bank of India that have foreign branches have jointly taken the initiative to prepare a note in mutual consultation for rationalisation of their foreign branches.

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SBI and other PSBs to shut one-third of foreign branches

A key action point for banking sector reforms thrown up at the maiden PSB Manthan, held last November, was to rationalise overseas operations across all public sector banks (PSBs). Subsequently, in March, the Department of Financial Services (DFS) had asked the state-owned banks to examine their collective 216 overseas operations to enhance cost-efficiencies.

Lenders have lost no time in following this order. Citing a senior Finance Ministry official, The Indian Express reported that PSBs are expected to close down nearly one-third of their foreign branches and other operations by the end of this year.

"The banks have initiated sale of non-core assets, closure of unviable branches and other steps to reduce capital. So far, they have closed down 37 overseas operations and another 60-70 operations will be closed down by the end of the year. These operations are a combination of full-fledged branches, representative offices and remittances offices," the official said, adding that some of the branches are being converted into smaller representative offices.

For instance, State Bank of India (SBI) is in the process of closing down nine foreign branches. "Branch rationalisation is an ongoing process. I think every branch has to justify its existence. So unless it is commercially viable, it doesn't make sense for us to be operating particularly in foreign locations," SBI's Managing Director Pravin K. Gupta told PTI last month. SBI has previously closed six foreign branches while some branches in Sri Lanka and France are reportedly being converted into representative offices.

Several other PSBs are in a similar retrenchment mode. Bank of India, Andhra Bank, IDBI Bank and Indian Overseas Bank closed down their Dubai operations while Punjab National Bank, Canara Bank and Union Bank of India shut their Shanghai offices. Bank of India also closed down operations in Yangoon and Bostwana, while Bank of Baroda shut down its Hong Kong branch.

According to the daily, leaving aside profitable operations - like the remittance offices in Gulf countries such as Oman and UAE - those not generating enough revenues are being closed down. Lenders are also merging smaller branches into bigger ones, and consolidating equity stakes in overseas joint ventures in order to cut costs and preserve capital. Moreover, banks are already in the process of obtaining regulatory approvals for shutting down full-fledged branches, which the source claimed is a time-consuming exercise.

There's another reason why the PSBs are on an overdrive to rationalise overseas operations - FinMin's carrot of capital infusion. Last October, the government had promised a whopping Rs 2.11 lakh crore capital infusion to strengthen the NPA-hit PSBs, of which Rs 65,000 crore is yet to be doled out. But in order to bag a share of this kitty, lenders have to meet specified milestones, including actively tackling their bad loans problem, arranging capital from the market and shutting down loss-making branches at home and abroad. Shutting unviable operations will free up capital, which the banks can then deploy for domestic operations.

That is a particularly pressing need for most PSBs since only two players managed to post a net profit in the year ended March 31 - Vijaya Bank and Indian Bank. The remaining 19 state-owned banks collectively ran up a loss of nearly Rs 10 crore per hour during the last fiscal.

Things aren't looking good for the current fiscal, too. The RBI's Financial Stability Report released last month predicted that the Gross NPA (GNPA) ratio of scheduled commercial banks is likely to rise in the current fiscal.

Furthermore, referring to the PSBs under its prompt corrective action framework (PCA), the RBI said that they may experience "a worsening of their GNPA ratio from 21 per cent in March 2018 to 22.3 per cent by this fiscal-end". The 11 banks under the PCA framework are IDBI Bank, UCO Bank, Central Bank of India, Bank of India, Indian Overseas Bank, Dena Bank, Oriental Bank of Commerce, Bank of Maharashtra, United Bank of India, Corporation Bank and Allahabad Bank.

Source=Business Today

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No. of Branches and ATMs of PSU bank

Bank	No.of Branches (in India)	No.of Branches (Foreign)	No. of ATMs
Allahabad Bank	3245	1	2701
Andhra Bank	2911	0	3650
Bank of Baroda	9445	50	10451
Bank of India	5127	29	7423
Bank of Maharashtra	1846	0	2100(approx.)
Canara Bank	5849	8	10549
Central Bank of India	4685	0	5403
Corporation Bank	2440	0	3169
Dena Bank	1872	0	2300(approx.)
IDBI Bank	1916	1	3850
Indian Bank	2820	4	3400(approx.)
Indian Overseas Bank	3332	8	3320
Oriental Bank of Commerce	2389	0	2681
Punjab & Sind Bank	1514	0	1500(approx.)
Punjab National Bank	6938	3	9598
State Bank of India	22414	52	59000(approx.)
Syndicate Bank	4012	1	4200(approx.)
UCO Bank	3104	4	4000(approx.)
Union Bank of India	4297	4	6409
United Bank of India	2057	0	2000(approx.)
Vijaya Bank	2136	0	2040

                                                                                                         As of 31 Mar,2018


* We have gathered above data from different relevant sources & people.
* If you have any doubt or need any correction then feel free to comment here.

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Bank of India(BoI) shuts one of foreign office in January

State-owned Bank of India today said it has closed down its operations of representative office in Yangoon (Myanmar) from mid-January.

"The Ministry of Planning and Finance, Directorate of Investment and Company Administration, Myanmar has allowed to terminate/close our Yangoon Representative Office (Myanmar) with effect from January 19, 2018," the bank said in a regulatory filing.

Public sector banks (PSBs), as per the agenda approved in the Manthan programme in November last year, were asked to examine all their 216 overseas operations as part of clean and responsible banking initiative.

As many as 35 overseas branches of state-owned banks are said to have closed down since.

The closing down of overseas operations assumes significance in the present context in the backdrop of jeweller Nirav Modi and his uncle Mehul Choksi of Gitanjali Gems misused the foreign office facility in the nearly Rs 13,000 crore fraud at PNB by presenting fake Letters of Undertakings (LOUs) to overseas banks.

Apart from Yangoon, Bank of India is also said to have closed down its office in Botswana.Besides, Bank of Baroda and Indian Overseas Bank have shut their Hong Kong branch.

As on January 31, 2018, public sector banks 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 largest number of branches in United Kingdom (32) followed by Hong Kong and UAE (13 each) and Singapore (12).

"PSBs to consolidate 35 overseas operations without affecting international presence of PSBs in these countries," Financial Services Secretary Rajiv Kumar had earlier said.

He also informed about identification of 69 operations for further examination as a move towards cost efficiencies and synergies in overseas markets.

Expressing government's commitment to 'clean and responsible banking', Kumar had said that the overseas operations of the state-owned banks will be rationalised.

Kumar further said that: "All 216 PSB operations to be examined. Non-viable operations in overseas market to be closed for cost efficiency and synergy. Operations in some geography to be consolidated. Consolidate equity stake in joint ventures having multiple PSB partners".

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Some foreign branches of state-owned banks in red

Nearly 25 per cent of the overseas branches of the public sector banks (PSBs) suffered losses in 2016-17, the government informed Parliament on Friday.

"As per data reported by PSBs, 159 branches of PSBs are operating in foreign countries, of which 41 branches were in loss in the financial year 2016-17," Minister of State for Finance Shiv Pratap Shukla said in a written reply to the Lok Sabha.

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. Shukla further said that a reforms agenda based on recommendations made by Whole Time Directors and senior management of PSBs has been referred by the government to lenders for appropriate action, as per approval of bank boards.

"The agenda covers, inter alia, rationalisation of overseas operations for cost efficiencies and synergies in overseas markets, based on competitive strength and viability,and a differentiated banking strategy to leverage bank's competitive advantage, which may include branch network rationalisation for a strong regional connect," he said.

All PSBs having foreign branches namely Allahabad Bank, Bank of Baroda, Bank of India, Canara Bank, IDBI Bank, Indian Bank, Indian Overseas Bank, Punjab National Bank, State Bank of India, Syndicate Bank, UCO Bank and Union Bank of India have jointly taken the initiative to prepare a note in mutual consultation for rationalisation of their foreign branches.

"Action on closure of branches identified by banks is at various stages. Banks take a view on branch operations, including their revival, based on commercial considerations," he said.

In reply to another question, Shukla said, as per data reported by PSBs, the total number of wilful defaulters has grown from 6,336 as on March 31 2014, to 9,063 as on December 31, 2017. 

As per RBI's instructions, wilful defaulters are not sanctioned any additional loans by banks or financial institutions, he said. A number of steps have been taken to reduce incidence of default on account of wilful defaulters, he said.

"To deal with wilful defaulters, as per RBI's instructions, they are not sanctioned any additional facilities by banks or financial institutions, their unit is debarred from floating new ventures for five years, and lenders may initiate criminal proceedings against them, wherever necessary," he said.

As per SEBI Regulations, wilful defaulters and companies with wilful defaulters as promoters or directors are debarred from accessing capital markets to raise funds, he said, adding, the Insolvency and Bankruptcy Code has been amended to debar wilful defaulters from participating in the insolvency resolution process.

Source- Times of India

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