Punjab & Sind Bank on expansion drive

The Punjab & Sind Bank (PSB) plans to consolidate its presence in northern India by adding a branch network. According to H S Makkar, the chief general manager of the bank, “There are quite a few unbanked pockets in the hinterland of Punjab, Haryana, Himachal Pradesh and Jammu and Kashmir. Besides the business correspondents (the local villagers engaged by the public sector banks to provide banking at doorsteps), brick and mortar branches are required in these areas. Since there is no requirement for licences from the Reserve Bank of India (RBI) for opening new branches in the towns having a population of less than 50,000, Punjab and Sind bank expects to add a few branches in Tier-3 towns”.

He apprised the bank was awaiting for the approval of 50 licences from RBI for branch expansion in Tier-1 cities and these would be scattered across India. The present branch network of the bank stands at 920 across India. The equity raised by the bank in the upcoming initial public offering (IPO) would help the bank to maintain capital adequacy ratio and expand its business. He told the bank sought funds from the Government of India for expansion and was advised to go through the equity route.

The bank has 21 branches under core banking solutions (CBS). The implementation of CBS was derailed due to the Satyam fiasco and the company has now hired new vendors for this.The bank, according to Makkar, aims to bring its entire network under CBS by December 2012. He told the bank was in the process of hiring 500 officers and clerks. This would add new workforce by March 2011 and help in its expansion. The bank would enter the capital market with an initial public offer of 40 million shares to raise Rs 470 crore.