An analysis of the branch network of SBI Associate banks: How local are they?

SBI has announced it shall close 47% of the branches of associate banks:

State Bank of India (SBI), which will see five associate banks merge into it on April 1, has decided to shut down almost half the offices of these banks, including the head offices of three of them. This process will start from April 24.

“Out of the five head offices of the associate banks, we will retain only two. Three head offices of the associate banks will be unbound along with 27 zonal offices, 81 regional offices and 11 network offices of the associate banks,” SBI Managing Director Dinesh Kumar Khara told IANS in an interview.

“We will keep their structure in place till April 24 and, post that, we will start dismantling the associate banks’ controlling offices, which includes head offices, regional offices, zonal offices and network offices,” Khara said.

The shut-down move is to avoid overlapping offices in the same area and “we intend to remove any kind of duplicacy in the controlling structure”, Khara said.

There are currently 550 SBI offices while its associate banks have 259. The target for the number of controlling offices after the merger is 687 — a reduction of 122 offices.

This blog has been trying to work on the branch network of these SBI Associate Banks just to understand geographical coverage and so on.

First some concepts. There are two things: Offices and Branches. In offices, banks also do admin work. Most offices (barring Head office. reginal office etc) also serve as branches. There is more here.

The article above talks about Offices and not branches. This is how the numbers look.

For offices we see there are 524 total offices (against 259 reported in the article). I really don’t know the discrepancy. As we can see nearly all the offices are in metropolitan and urban areas of the banks.

Metropolitan Rural Semi-urban Urban Grand Total
Total SBI Associates 231 2 40 251 524
STATE BANK OF INDIA 540 7 65 501 1113

In terms of branches, we see 40% of branches in urban and metropolitan areas and 60% branches in rural and semi-urban areas.

No. of Branches
Metropolitan Rural Semi-urban Urban Grand Total
STATE BANK OF HYDERABAD 437 509 603 374 1923
STATE BANK OF MYSORE 279 318 255 228 1080
STATE BANK OF PATIALA 229 456 346 313 1344
STATE BANK OF TRAVANCORE 139 112 725 213 1189
Total SBI Associates 1373 1857 2268 1354 6852
STATE BANK OF INDIA 3219 5897 4875 3041 17032

As offices also serve as branches, it is best to analyse them together. I will also try and use %ages for more clarity on the geographical spread.


%  distribution of all offices and branches
Metropolitan Urban Rural Semi-urban Grand Total
STATE BANK OF BIKANER AND JAIPUR 24.2 19.6 32.0 24.2 100.0
STATE BANK OF HYDERABAD 25.2 20.8 24.6 29.4 100.0
STATE BANK OF MYSORE 27.2 22.9 27.5 22.4 100.0
STATE BANK OF PATIALA 18.0 26.0 31.7 24.3 100.0
STATE BANK OF TRAVANCORE 12.5 19.9 8.9 58.7 100.0
Total SBI Associates 21.7 21.8 25.2 31.3 100.0
  • Just amazing diversity.
  • In SBBJ, rural branches are highest followed by similar numbers in metro and semi-urban areas.
  • In SBM also, rural branches are highest followed by metro
  • In SBH,  branches are most across Semi-urban areas.
  • In SBP, rural branches top the coverage.
  • Most interesting is SBT, which has nearly 60% of its branches in semi-urban areas.
  • Overall, we see SBI Associate banks to have higher penetration in rural and semi-urban areas compared to metro and urban areas.

The next set of analysis is to see their numbers in their home states. After all, these banks grew from their respective States. How do they fare in their states despite so many years? Have they maintained their local touch?

We first see the concentration of branch network in respective states.

Metropolitan Urban Rural Semi-urban Grand Total
SBBJ 48.0 72.1 98.3 93.7 79.9
SBH 52.1 57.6 76.9 63.4 62.7
SBM 61.3 80.4 98.4 89.6 82.2
SBP 19.2 40.8 53.0 50.3 43.1
SBT 0.0 77.2 40.2 91.2 72.5
  • This table just explains the local connect of these associate banks.
  • Nearly 82% of SBM  branches are  in Karnataka, followed by SBBJ at 80% in Raj. SBP is lowest at 43.1%.
  • Of the total SBBJ branches in rural areas, 98% in Rajasthan followed by sub-urban share at 93.7%
  • Of all SBH branches in rural areas, 77% in AP and Telangana.
  • Likewise, we  see the concentration in other States as well.

However, this alone is not enough. What about share of these banks’branches in total bank branches in the home States? The above table looks just at its own branch network in home states. But we also need to analyse its presence in overll branch network of all banks in the States.

Metropolitan Urban Rural Semi-urban Grand Total
SBBJ Branch Share in Rajasthan 15.0 15.2 16.6 16.9 16.2
SBH Branch Share in AP 9.4 10.6 10.4 12.3 10.7
SBM Branch Share in Karnataka 8.1 9.8 9.2 10.0 9.2
SBP Branch Share in Punjab 6.1 11.9 9.8 8.7 9.4
SBT Branch Share in Kerala 11.7 13.9 14.7 13.9
  • SBBJ forms the highest 16% of branches in Rajasthan followed by SBT in Kerala at 14%.
  • If we sum the metro+urban areas and rural +semi-urban areas, we see all banks barring SBT having similar shares. For instance, share of SBBJ branches in Rajasthan branches in metro+urban areas is 30.2% and in rural + semi-urban areas is 33.5. Likewise for other 3 banks as well.
  • In SBT, nearly 29% of its share is in rural and semi-urb areas and just 12% in urban areas (as metro is zero).

It is all getting confusing now, so would like to end.

The overall message is clear. These banks do have a large local presence in their home states. Even the home States are reliant on these banks network as they form nearly 10-16% of total branches in the respective States. The relationship is both ways. These Associate Banks are likely to have valuable local knowhow which is crucial to banking.

Hope SBI preserves these local aspects  and does not destroy all this in the name of becoming a large global bank..Based on the evidence so far, maintaining these local banking habits have been difficult for merging bank to preserve. They end up imposing their own agenda most of the time.

The modern bankers and central bankers are increasingly realising how cultures matter for banking. This has always been known to earlier bankers but all this was pretty much ignored in the name of globalised homgeneous banking. As NPAs and other issues have risen not just in India but other countries too, all these ideas are coming back.

Hope SBI does not make the same mistakes we have made all this while…


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