SBI plans to shut and relocate 30% of its branches
What's the story
The biggest bank of the country, State Bank of India (SBI), is considering a proposal to either relocate or shut down 30% of its 24,000 branches.
The advice comes from global management consultant, McKinsey, in order for SBI to remain competitive.
The Managing Director of SBI, Rajnish Kumar confirmed that McKinsey was hired by the bank for branch optimisation services.
Data
State Bank of India
A government-owned corporation, State Bank of India in the year 2014-2015 had more than 14,000 branches including 191 foreign offices across 36 countries, being the largest banking and financial services company in India by assets.
About
McKinsey & Company
McKinsey & Company is a global management consulting firm, conducting qualitative and quantitative analysis for evaluating management decisions spanning public and private sectors.
Their clientele includes 80% of the world's largest corporations including governments and non-profit organisations.
The list of McKinsey's clientele includes Google's C.E.O. Sundar Pichai, Facebook's C.O.O. Sheryl Sandberg and Morgan Stanley's C.E.O. James P. Gorman.
Quote
McKinsey and Accenture Financial Services
"We had engaged Mckinsey for branch and ATM optimisation and customer enhanced experience programme. We have also engaged Accenture Financial services to draw up a plan on our InTouch branches", said Rajnish Kumar.
Information
What are SBI's InTouch Branches?
On 1st July, 2016, State Bank of India inaugurated 6 digital branches across the country known as InTouch branches.
Named "sbiINTOUCH", these branches provide services such as instant opening of accounts with personalised debit cards, loan approvals by featuring interactive walls and table displays.
The aim of InTouch branches is to cater to the internet-savvy customer base of the next generation.
Efforts
SBI's branch optimisation measures
400 branches of SBI were recently shut down and relocated in order to cut costs.
1,053 branches were added in FY14 whereas FY15 saw the addition of a mere 464 branches, which shows that SBI is going slow in adding additional branches.
The merger of SBI's five associate banks-Bikaner and Jaipur, Travancore, Patiala, Mysore and Hyderabad-is expected to increase the scope of cost rationalisation.