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Part - VIII

Merger/Closure of Branches of Bank

Gone are the days of social banking where bank was considered as a provider of social service and profit was not a criterion for the opening or discontinuance of a branch. We have been witnessing a large scale closure and merger of branches of a bank, which are not viable and continually incurring losses. This trend would continue until the number of branches of a bank becomes such that almost all the branches are making profits and the size of the Bank strategically optimal.

Merger/Closure of Banks

With the stiff competition around and reaching a cut-throat level with banks offering interest rates to customers, which do not even cover their cost of capital, some of the smaller banks would either be closed down or merged with other banks to attain synergy.

Conclusion

In Bank, operation will be restricted to opening of new accounts, customer loan disposition discussions, visits to customer units and forex business.

So what will a bank look like ten years on? Banks will be in swank buildings with parking areas for cars. They will have an excellent ambience suited to its target customers. There will be only Managers in the bank, who will be up to date in all major skills as listed above, discussing in a nice ambience.

Concluded.

* Contributed by -
Aditya Khemani, PGDM - II Year,
Tuhina Singh, PGDM - I Year,
IIM Lucknow.