First time in 3 years: Commercial banks open more branches than year ago

The Indian Express

RBI data shows Tier-1 and Tier-2 cities led to the rise in additional branches last year and those in Tier-5 and Tier-6 continued to witness a decline in the pace of addition of new branches.
For the first time in three years the pace of opening of new branches witnessed growth as the scheduled commercial banks opened 4,518 branches in FY19 as against 3,938 branches opened in FY18. By comparison, the scheduled commercial banks had seen a decline in the growth rate of new branches opened in the previous two years. While in FY16 the SCBs opened 9,080 new branches, they opened 5,357 branches in FY17 and the number of new branches declined further to 3,938 in FY18.
RBI data shows Tier-1 and Tier-2 cities led to the rise in additional branches last year and those in Tier-5 and Tier-6 continued to witness a decline in the pace of addition of new branches.
“More than 50 per cent of the new branches were opened in Tier-1 and Tier-2 centres; on the other hand, the shares of Tier-5 and Tier-6 centres declined. This is consistent with the banks’ policy of opening branches in high population density areas where they are likely to be more commercially viable, while relying on BCs to enhance their outreach in other centres,” said RBI in its Report on Trend and Progress of Banking in India. It added the revised guidelines on rationalisation of branch authorisation policy introduced in May 2017 has provided banks autonomy to decide their business strategy in facilitating financial inclusion. While the pace of new branch opening witnessed reversal and witnessed a growth of almost 15 per cent, the number of ATMs operated by scheduled commercial banks declined from 2,07,052 at the end of March 2018 to 2,02,072 at the end of March 2019. However, the number of white labelled ATMs increased from 15,195 in FY’18 to 19,507.
RBI said the growth in white label ATMs has been boosted by policy changes introduced on March 7, 2019, to enhance the financial viability of WLAs, such as allowing their operators to source cash directly from the Reserve Bank, offer non-bank services, and advertise non-financial products in their premises. While private banks recorded an increase in their on-site and off-site ATMs, PSBs reduced both.

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