The State Bank of India (SBI), India's largest lender, announced plans to open 400 new branches across the country in the financial year 2024-25 (FY25). This move comes even as digital banking continues to gain traction in India.
SBI Chairman Dinesh Kumar Khara highlighted the bank's commitment to both digital and physical banking channels. He acknowledged the dominance of digital transactions (89% of all transactions and 98% of all account-related transactions) but emphasized the continued need for branches, particularly in emerging areas and rural locations.
"There are certain services like most of the advisory and wealth services that can be offered only from the branch," Khara said in a interview. Branch banking offers personalized service and human interaction, which can be crucial for complex financial decisions or those seeking guidance.
SBI's expansion plans prioritize establishing a presence in new and developing areas. These branches will cater to the growing demand for banking services in these regions, promoting financial inclusion and economic development.
With 59 new rural branches planned for FY25, State Bank of India (SBI), is actively addressing the gap in banking services in rural India. This expansion will provide easier access to financial products and services for rural communities, empowering them to participate more actively in the formal economy.
With the addition of 400 new branches, SBI's extensive network will reach a total of 22,942 branches by the end of FY25. This expansive network ensures greater accessibility and convenience for SBI customers across the country.
While SBI is expanding its branch network, the monetization of its subsidiaries, such as SBI General Insurance and SBI Payment Services, will be put on hold for now. The bank aims to focus on further scaling up their operations before considering listing them on the capital market.
SBI General Insurance Shows Profit Growth
SBI General Insurance, a subsidiary of SBI, reported a 30.4% increase in net profit to ₹240 crore for the financial year ended March 2024. This positive performance indicates the subsidiary's strong position in the non-life insurance market.
SBI Payment Services Maintains Market Leadership
SBI Payment Services Pvt Ltd, a leading player in the merchant acquiring business, continues to hold a dominant position in the market. As of March 2024, the company boasts over 33.10 lakh merchant payment acceptance touchpoints, including 13.67 lakh POS machines deployed across India.
SBI's plan to open 400 new branches in FY25 reflects its strategy to balance the growth of digital banking with the need for physical branches that provide essential services. By expanding its branch network and carefully timing the monetization of its subsidiaries, SBI aims to enhance its service delivery and financial performance, ensuring continued leadership in India's banking sector.