” Several Indian private sector banks including
. and . are expanding their local branch networks, contrary to expectations that digitalization would obviate the need for physical branches” said a release by the market intelligence unit.
The number of branches operated by private sector banks grew to 16,189 in the year ended March 31, from 14,893 a year ago, according to data from S&P Global Market Intelligence.HDFC Bank and
accounted for the bulk of that growth, with HDFC Bank’s branches expanding to 6,342 from 5,608, and Axis Bank’s branches increasing to 4,758 from 4,594, it said. Singapore-headquartered DBS Group Holdings Ltd., which purchased The . in 2020 to become the biggest foreign lender by branches in India, also plans to expand to smaller cities.
” Private sector banks continue to be in expansion mode in India, riding on economic growth that is among the fastest in the world. They often lack presence in certain states and in smaller towns” the report said.
In contrast, state-owned banks, which dominate the banking landscape, are trimming their branch networks to improve financial efficiencies and because they are consolidating amid the government’s move to reduce its presence in the industry. Total branches of state-owned banks declined to 59,238 by March 31, from 61,031 at the end of the previous fiscal year, according to data from S&P Global Market Intelligence.
At the same time, both private and public sector lenders in India continue to focus on digital apps, allowing customers to conduct basic banking operations without having to step out of their homes. Besides, digital banking also got a boost from the COVID-19 pandemic, which forced lockdowns in several parts of the country, the report noted.
Though the younger Indians are embracing mobile phone apps, older generations and people in smaller towns prefer to deal with bank executives even for routine tasks such as checking account balances or opening deposit accounts.