With increasing usage of technology in the banking sector, the use of branches is falling. Banks can now lower the cost incurred towards rentals and use it elsewhere.
Bank of Baroda has achieved it by giving up over 2 lakh sq ft of space rented in the past 2 years.
M D Mallya, chairman and MD of BoB said, “Wherever the space available is abnormally large, we are surrendering a part of it”.
The country’s biggest lender, the State Bank of India (SBI), is also planning to reduce the branch space and reorganize the extra space.
SS Ranjan, CFO of SBI said, “We have redeployed space and given away the excess space in a branch for other purposes like back office”,.
Similarly Andhra Bank had some time ago required 2000sq ft area to start a branch but has now been lowered to 1000-1200 sq ft.
Anil Girotra, executive director, Andhra Bank said, “Functions like maintaining records and books manually have been shifted to data and clearing centres”.
K R Kamath, chairman and MD, PNBsaid, “We implemented core banking system, due to which the area required for a branch got reduced. Now we need much lesser space,”.