Earlier this month, financial services secretary Rajeev Kumar tweeted that public sectors banks (PSBs) will consolidate 35 overseas operations without affecting the international presence of PSBs in these countries. Further, 69 operations have been identified for further examination, he added. This include, bank branches, joint ventures, subsidiaries, remittance centres and representative offices. The proposal also include consolidation of operations of bank branches in the same geography.
While the UK has highest number of Indian bank branches at 32, followed by Hong Kong with 17 branches, and Singapore with 11 branches.
“Although LoUs accounted for 50 per cent of bank’s overseas business, they only accounted for 25 per cent of their income, as margins were very low. Now, definitely the business from foreign operations will shrink, but at the same time, the profits will increase. In Hong Kong, we will now focus on trade finance to Indians settled there, as traditionally Indian banks have not been financing local Chinese population,” said an official Allahabad Bank, which has one branch in Hong Kong.
As on January 2018, Indian banks had about 185 full-fledged foreign branches, with State Bank of India
having the highest number at 52, followed by Bank of Baroda with 50. Including subsidiaries, representative offices, joint ventures and other offices, Indian banks have about 302 operations abroad.