IOB to shut 10 regional offices to improve efficiency

The bank has 59 regional offices and 7 zonal offices

Public sector lender Indian Overseas Bank (IOB) today said it will rationalise the number of its regional offices by closing 10 such offices to improve efficiency.

"Our bank at its meeting held in 12.12.2015 decided to rationalise the number of regional offices in the country by reducing 10 regional offices from existing 59. The estimated date of closure is 1.3.2016," Indian Overseas Bank said in a clarification to the BSE.

It further said, "The closure of regional offices is for optimum utilisation of resources and is administrative decision within the bank... It will result in substantial reduction in administrative costs."

Indian Overseas Bank said it has 59 regional offices and 7 zonal offices, which provide support and guidance to branches which are undertaking business activities and are required to monitor the performance of branches.

In October last year, IOB said Reserve Bank has initiated a prompt corrective action on the bank.

The RBI specified certain regulatory trigger points, as a part of prompt corrective action (PCA) framework, in terms of three parameters -- capital to risk weighted assets ratio (CRAR), net NPA and Return on Assets (RoA), for initiation of certain structured and discretionary actions in respect of banks hitting such trigger points.

Gross NPA of the bank rose to 9.40% for the quarter ended June 30. IOBs gross non-performing assets rose to 8.30% at the end of March 31, from 4.84% a year ago, according to the provisional RBI data taking into account domestic operations of banks.

Shares of Indian Overseas Bank were trading at Rs 29.55, down 0.17% from previous close on BSE.