To ensure that the proposed branches break even within the first year of operations, State Bank of India and its associate banks are planning to undertake profiling of four centres — Delhi, Mumbai, Bangalore and Chennai.
The profiling exercise will entail study of areas and locations in these centres for network optimisation through opening/relocation of branches and ATMs of India’s largest bank and its five associate banks.
This move comes as the bank is gearing up to meet increased competition from existing banks as well as two new banks — IDFC Bank and Bandhan Bank — which will come into existence in the next 18 months.
Since the existing banks have stepped up focus on the fast-growing fringes of metros, the bank has to meet the challenge, said a senior bank official.
The profiling exercise will take into account, among other factors, the distance between the location of the proposed branch/ATM and the nearest existing public sector bank/ private/ foreign bank; names and number of banks functioning within a radius of five km; and whether the existing banking facilities in the proposed locations are considered inadequate.
A consultant will help the bank draw up an estimate of the minimum business (deposits and loans) which the branches are expected to attract at the proposed place of business within 12-36 months.
The profiling will also lead to a mapping of the present market share of the State Bank group in the locality vis-à-vis total potential; and expected changes in its market share after opening of branches in the next three years.
The bank is looking at indicative timelines of upcoming infrastructure projects of Central/State Governments, corporate sector and any other significant developments likely to take place in the proposed locations.
Demographic charts and reports of the proposed locations will be created. The same will be interpreted to take decision on setting up/ relocating branches/ ATMs.
The State Bank group operates through a network of about 21,500 branches and 48,500 ATMs. The five associate banks of SBI are State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore.