Illustration: Ajay Mohanty
The Union government said on Friday that one-fourth of all foreign branches of public sector banks
reported losses last financial year.
"As per data reported by PSBs, 159 branches of PSBs are operating in foreign countries, of which 41 branches were in the loss in the financial year 2016-17," Minister of State Finance Ministry Shiv Pratap Shukla informed the Lok Sabha on Friday.
The Rs 129 billion scam reported in Punjab National Bank has put the scanner on foreign branches of PSBs as fraudulent transactions through thousands of letters of undertaking (LoUs) allegedly took place between domestic and overseas branches over last seven years in the Nirav Modi and Mehul Choksi case.
Most numbers of foreign branches that reported losses belonged to State Bank of India (nine), followed by Bank of India (eight), Bank of Baroda (seven), Indian Overseas Bank (five) and Canara Bank (four).
"All PSBs having foreign branches have jointly taken the initiative to prepare a note in mutual consultation for rationalisation of their foreign branches. Action on the closure of branches identified by banks is at various stages," Shukla said.
Department of Financial Services Secretary Rajiv Kumar had said on March 1 that PSBs will consolidate 35 overseas operations without affecting international presence in these countries. "69 operations identified for further examination. Move towards cost efficiencies and synergies in the overseas market," Kumar had said.
Banks will close unviable operations and consolidate operations in the same geography, according to the plan. For instance, in United Kingdoms, Bank of Baroda has 10 branches, SBI has 12 and Bank of India 7 as on January 31 this year.