Around 70 foreign branches may be shuttered by end 2018.
India is expected to shut down 70 out of 216 foreign branches of public sector banks by the end of the year in an effort to slash costs amidst a ballooning bad debt problem, reports The Indian Express.
State Bank of India, Punjab National Bank, Indian Overseas Bank, IDBI Bank and Bank of India are amongst the state-owned lenders downsizing their overseas operations.
A number of banks have already halted operations in Dubai, Shanghai, Jeddah and Hong Kong whilst other lenders have been consolidating their smaller branches into bigger banks.
“So far, they [the banks] have closed down 37 overseas operations and other 60-70 operations will be closed down by the end of the year. These operations are a combination of full-fledged branches, representative offices and remittances offices,” a senior Finance Ministry official told The Indian Express.
The government is also reportedly resuming discussions on public sector bank consolidation with larger players like Bank of Baroda, Canara bank and Union Bank of India considered as possibly absorbing smaller players.
India is set to inject another $2b to support the capital requirements of ailing state banks as part of a last ditch effort to lift the embattled lenders out of their earnings slump following record losses brought about by rising slippages and a bad debt burden that's second worst in the world.
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