Monday, December 14, 2015

To reduce costs, govt asks PSU banks to swap branches

IN AN innovative move, the government has asked the PSU banks to swap branches and is pushing PSU banks to look at operational synergies that also help reduce cost. As part of a focus on boosting the functioning of state-run banks, minister of state for finance Jayant Sinha has held discussions on the issue and quite a few possible steps have been...
identified, including swapping of branches and a common infrastructure for back-end operations or even having a company that handles the core banking software applications for the lenders based on a fee.
Several banks have a concentration of branches in certain pockets, while the others may be weak in those areas. The plan is to get them to redeploy the branches, which will help save costs and avoid duplication. In any case, the lenders are tapping technology to increase their reach and trying to reduce footfalls into branches.
Ministry of Finance is requested to consider at present there are about 10-15 Bank branches within a radius of one km.
Since the banks are short-staffed and the situation will going to worsen given the large-scale retirement, cost cutting through smarter operations is seen as a key part of the strategy. Lower costs and more efficient operations are expected to help lenders pump in more money into their operations and reduce pressure on capital from the government.
As part of the capital-raising exercise the government is driving banks to leverage the huge real estate assets that they have and State Bank of India has taken the lead in setting up a subsidiary with assets of around Rs 23,600 crore based on the current market value. The government wants the lenders tap into the non-core businesses to meet their part of the capital requirement. Excluding the internal profit generation of state-run banks, the capital requirement for the next four years up to FY-19 is likely to be about Rs 1.8 lakh crore.

1 comment:

  1. TEMPLES OF MODERN INDIA ?

    In July 2014 , Rangrajan Committee defined the " Poor " in India as , following persons :
    * In Rural areas ............. those whose daily expenditure was Rs 32 or less
    * In Urban areas............ those whose daily expenditure was Rs 47 or less
    That methodology placed below poverty line ( BPL ) , 363 million persons
    Recently , NITI Aayog has come up with a cut-off point of 40 % of the expenditure curve , which places 484 million Indians below poverty line ( 48.4 crore persons )
    Now , if NDA government were to close down / shut down 53 loss making Public Sector Units ( PSUs ) , it would save , Rs 53 Crore , DAILY ( Approx Rs 20,000 Crore every year )
    That is a little more than Re 1 / - per poor person per day
    Not much to feed his / her starving stomach
    But enough to take out for each of them , that Medical Insurance , announced some time back , with much fanfare !
    Now , if NDA government were to sell off the assets of these 53 loss making units ( mostly the land on which these are situated ) , it may even succeed in raising Rs 10,000 crores
    It is high time NDA starts working for the poor , instead of paying Rs 20,000 monthly salary to a few thousand workmen , who have no work and pass their time playing cards on the shop floors of these factories !
    If you have any doubts re my statement , just ask any TV channel to send an investigative reporter with a hidden web cam on the shop floors of these factories !
    You will see the pathetic situations of , what Pundit Nehru liked to call , these " Temples " of modern India
    Temples from where the " Gods " of Productivity have left and parasite " Poojaris " reign supreme !
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    hemen parekh
    23 Dec 2015
    B2BmessageBlaster

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