Bankers in the state say the dip in number of branches is the result of amalgamation of various banks since the last two years.
Nationalised banks reduced the number of branches serving customers in Gujarat by 278, in the last one year, the latest report published by the State Level Bankers’ Committee (SLBC-Gujarat) stated here. In comparison, there has been a 5.5 per cent growth in number of branches operated by private banks.
Compared to the 5,257 branches operated by nationalised banks in 2019-20, the numbers dropped to 4,979 during 2020-21, states the SLBC report. Bankers in the state say the dip in number of branches is the result of amalgamation of various banks since the last two years.
“The effect of various amalgamations that have happened since 2019 is now showing. Dena Bank and Vijaya Bank were first merged with Bank of Baroda in 2019, thereafter 10 other banks were merged to create four banks. The branches of amalgamated banks that were located close to each other and those found unviable were closed or merged with existing ones. The amalgamation was a large exercise,” an SLBC official told The Indian Express.
Among the banks that underwent a merger, Bank of Baroda saw a 14 per cent decline in the number of branches during the last one year. The other banks that were merged subsequently include, Oriental Bank of Commerce and United Bank of India, both of which were merged into Punjab National Bank. Syndicate Bank merged with Canara Bank. Similarly, Corporation Bank and Andhra Bank merged with Union Bank of India and Allahabad Bank Merged with Indian Bank.
However, nationalised banks that were not part of the amalgamation exercise also cut down on the number of branches. For instance, State Bank of India reduced 13 branches in Gujarat and Indian Overseas Bank reduced four branches. Nationalised banks have been reducing their footprint in Gujarat even before the amalgamation began. In the year 2017-18, public sector banks operated as many as 5422 branches, while private banks had only 1607 branches. Thereafter, the number of branches of nationalised banks have fallen steadily.
In contrast, private banks increased their presence in the state during 2020-21. The number of branches of went up to 2,225 at the end of March 2021, after 116 branches got added. Small finance banks and cooperative banks increased the number of branches in their state by 68 and 9 respectively.
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