The Hindu Business Line : `Specialised branches on the way out'

THE advent of broad-spectrum banking channels is revolutionising the banking industry and specialised branch banking of yesteryears is becoming increasingly irrelevant, said Mr K.S. Harshan, Executive Director of Federal Bank.

Reflecting the shape of things to come, the Thrissur-based South Indian Bank has converted its exclusive NRI branch in Kozhikode to a general multi-purpose branch with special counters to look after NRI business.

"Given its strategic location in the heart of the business district of Kozhikode we thought it prudent to focus on general banking along with NRI business from the same branch premises. Also, NRI business is no longer the major source of funds for the banking industry, but one among several such sources," said Mr A. Sethumadhavan, Chairman of South Indian Bank.

While discounting the immediate possibility of the bank converting more of its NRI branches to general-purpose branches, he said that they might review individual instances on a case-by-case basis.

"Today's banks are better equipped to deploy the same infrastructure, manpower and technology to meet diverse and competing banking demands such as NRI business, building assets and liabilities, extending and servicing retail credit from the same platform — thus creating general-purpose utilitarian bank branches," Mr Harshan said.

Technology has empowered the banking industry to transcend from anywhere banking to anytime banking. The only exception to this general rule would be in the instance of big-ticket customers such as Reliance Industries, Tatas and other large corporate houses for whom specialised packages might have to be formulated.

Mr Harshan said the days of specialised branches could soon become a thing of the past.

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