Finance Minister Pranab Mukherjee [ Images<http://search.rediff.com/imgsrch/default.php?MT=pranab+mukherjee>] wants to extend the geographic coverage of banks and told the Lok Sabha during his Budget speech that the central bank was considering allowing more private players in banking.
An analysis of Reserve Bank of India data, however, raises doubts on whether the finance minister's hopes of more "geographic coverage" can be met by allowing more private players. As on June 30, 2009, the seven new private sector banks had 275 branches in rural areas, or just 6.4 per cent of the 4,264 branches they have. Metropolitan cities account for 35 per cent and urban centres 32.6 per cent of the total number of branches. Compared to this, 34 per cent of the total public sector bank branches are in the rural areas. State Bank of India [ Get Quote<http://portfolio.rediff.com/quotes/state+bank+of+india>] and its associate banks have 5,609 branches in rural areas, or 34.5 per cent of 16,260 branches, and all other public sector banks, except IDBI Bank, have 13,303 branches in rural areas, which is 34.2 per cent of the total number of 39,095 branches. IDBI Bank, which is considered a new generation bank with the government as majority shareholder, has a 10 per cent branch presence in rural areas. Among private sector banks, ICICI Bank [ Get Quote<http://portfolio.rediff.com/quotes/icici+bank+ltd>] has the highest branch network in rural areas. According to RBI data, till March 31, 2009, the largest private sector bank had 138 branches in the rural areas, or 10 per cent of its 1,409 branches. HDFC Bank [ Get Quote <http://portfolio.rediff.com/quotes/hdfc+bank+ltd> ] and Axis Bank, the second- and third-largest private sector banks, have 67 and 30 branches in rural areas out of 1,408 and 786 branches respectively. RBI defines rural areas or Tier-3 to Tier-6 cities as those with a population of less than 49,000. The regulator stipulates new private sector banks to ensure that at least 25 per cent of their total branches are in semi-urban and rural centres on an ongoing basis. *Root and branch *DISTRIBUTION OF BANK BRANCHES Data till June 30, 2009 Rural % to total Metro Total SBI group 5609 34.5 2650 16260 Nationalised banks 13363 34.2 8244 39095 New private sector banks 275 6.4 1484 4264 Data till March 31, 2009 SBI 4366 38.1 1773 11472 Punjab National Bank [ Get Quote<http://portfolio.rediff.com/quotes/punjab+national+bank>] 1881 43.5 702 4327 ICICI Bank 138 9.8 410 1409 HDFC Bank 67 4.8 548 1408 Axis Bank 30 3.8 253 786 *Source: RBI* In October, the RBI liberalised the bank branch licensing policy by allowing Indian banks to open branches in Tier-3 to Tier-6 cities without prior regulatory approval, a move aimed at spreading banking services across the country. Banks were asked to plan their expansion in Tier 3 to Tier 6 centres in such a manner that at least one-third of these branches are in under-banked districts of under-banked states. RBI has not issued new bank licences since 2004. http://business.rediff.com/report/2010/mar/02/budget-2010-rbi-data-may-dash-pranabs-hopes-on-bank-reach.htm -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
