Page 45 - Banking Finance March 2019

ARTICLE

Analysis Average Number of employees per

Highest in State Bank of India is due merger of 5 Associate branch
Banks and Bharateeya Mahila Bank. After merger,
Following chart shows average number of staff per branch
opportunity available to State Bank of India is to merger of in banks as on 31.03.18.
branches which are located in same building / premises or
within a radius of 2 to 3 km. Thereby substantial overheads
of RTL will decrease in SBI. Average growth rate is 3% in
RTL is considered to be reasonable, exceeding which will
have effect on Bank's Profit. In Allahabad Bank and Punjab
& Sind Bank the growth rate of RTL is negative, these two
banks reduced substantially the RTL overheads by 13.52%
and 3.30% when compared to previous year. Control of RTL
not only reduces the overheads of the bank but also
indirectly reduces the manpower costs. In Indian bank
neither increase nor decrease in RTL. Whereas in IOB, OBC,
BOI, Andhra Bank and BOM has nominal growth and when
compare to average growth of public sector banks i.e. 3%.
If banks review the RTL on year-on-year basis, reduction is
possible by adopting the strategies mentioned below.

Percentage of in RTL in Total business of
the bank Analysis

Following table shows percentage of RTL as on 31.03.18 in The number of branches and total number of employees is
total business of the banks. high in State Bank of India, followed by PNB. If we take
average number of employees per branch SBI is more and
Name of the Bank % of RTL in Total Business
as on 31.03.18 followed by PNB. In view of increase in alternate delivery
channels in the banking system, number of employees per
Dena Bank 0.12
branch is to be reduced gradually. The average number of
Allahabad Bank 0.11 employees of PSBs is around 10 per branch. In Punjab & Sind
Indian Overseas Bank 0.11 Band and Andhra Bank is 6.07 and 6.76. Once the branches
State Bank of India 0.11 are trimmed on account of increase in alternate delivery
channels and CPCs, proportionately the manpower costs will
IDBI Bank 0.11
be reduced and cost of banking operations will also reduce.
Analysis
Average percentage of RTL in total business should not Branch vs. ATM
exceed 0.10%, banks mentioned in the above table is more Following table shows number of ATMs and Branch vs. ATMs
than the 0.10%. Whereas in Punjab National Bank, data as on 31.03.18 for six branches with high Branch vs
Syndicate Bank the percentage is 0.07% Punjab & Sind Bank, ATM ratio.
Bank of India and Union Bank of India is 0.08%. Name of the Bank ATMs Branch vs. ATMs
State Bank of India (SBI) 59,541 2.66
The ideal percentage is 0.05% on account of increase in
alternate delivery channels and shifting of back office Bank of Baroda (BOB) 9,704 1.78
operations to central processing centres. Review of existing Punjab National Bank (PNB) 9,668 1.38
premises, usage % of alternate premises, RTL Policy, growth Canara Bank (CB) 9.395 1.51
rate in business, competition / market share of the branch
Union Bank of India (UBI) 7,642 1.78
etc. are the various parameters to control the RTL
overheads. IDBI Bank (IDBI) 3,779 1.97

BANKING FINANCE | MARCH | 2019 | 45