Public Sector Banks Begin Consolidation Of Overseas Operations

Public sector lenders have begun to rationalise their overseas operations and are consolidating 35 of these operations as part of the government’s ‘clean and responsible’ banking initiative.

All 216 overseas operations are being examined, of which, 69 operations have also been identified for possible consolidation.

“PSBs to consolidate 35 overseas operations without affecting their international presence in these countries; 69 operations identified for further examination,” said Financial Services Secretary Rajeev Kumar on Thursday, adding that this will help improve cost efficiencies and synergies in overseas markets.

The move come after the Finance Ministry on January 24 unveiled the recapitalisation plan as well as a comprehensive reform package for state-run lenders.

PNB scam

Since then, state-run Punjab National Bank has also reported a ₹12,700-crore fraud by jeweller Nirav Modi allegedly in connivance with the bank’s staff and officials of overseas branches of other state-owned banks.

According to Kumar, the overseas operations that are being reviewed include bank branches, joint ventures, subsidiaries, remittance centres and representative offices.

While non-viable operations in overseas markets will be closed down, operations in the same geography will be consolidated. Further, equity stake in joint ventures that have multiple state-run lenders as partners will also be consolidated.