Commercial banks rushing to ramp up presence in temple town of Ayodhya

From HDFC Bank to J&K Bank and Karnataka Bank, lenders are rushing to ramp up their presence in Ayodhya, anticipating increased business activity, which is gaining momentum with the opening of the Ram temple, scheduled next week.

HDFC Bank, the country’s largest private sector lender, which has three branches in Ayodhya, is planning to open one more in a month and another one by March-end. Last week, Karnataka Bank opened its 915th branch, in the temple town. “With its world-class infrastructure, Ayodhya has turned out to be a perfect destination for cultural preservation and will attract visitors from all over the world. Karnataka Bank, with its 100-year legacy, will be positioned right to offer world-class banking and digital services from this holy city,” Srikrishnan H, managing director and chief executive officer (MD & CEO), Karnataka Bank said in a statement.

Another private sector lender, Axis Bank, said it was ramping up its ATM numbers by deploying mobile ATMs. These will be stationed at various locations in the town to deal with the demand surge.

The town has been buzzing with business activities since the temple construction started following the Supreme Court's permission in November 2019. The opening is scheduled for January 22.

Fancy eateries, a revamped railway station, and five-star hotels from the Taj and Radisson groups are expected to boost tourism in the city and its adjoining areas. Prime Minister Narendra Modi inaugurated the new Maharishi Valmiki International Airport (Ayodhya International Airport) last month. The first phase can handle one million commuters annually. The Sarayu riverfront is being developed as a tourist destination with cafés, eateries, watersports, and light-and-sound shows.

“Given the upcoming business opportunities in Ayodhya, the proposal of opening a new branch is under active consideration of the bank,” a spokesperson for Jammu and Kashmir Bank said.

The Ayodhya district has about 250 bank branches. Bank of Baroda (BoB), the convener of the State Level Bankers' Committee of the district, has the highest number of branches at 34, followed by the State Bank of India, which has 26 branches. Baroda UP Gramin Bank – the regional rural bank of BoB, has 33 branches. Another large public sector lender, Punjab National Bank, which has 21 branches in the district including four in the city, may come up with another branch near the new airport.

Bengaluru-based public sector lender Canara Bank has six branches in Ayodhya city and 11 in the district. “Recently we have shifted our local regional office to Ayodhya. We have one branch near to the proposed temple, which we refurbished recently,” MD & CEO, K. Satyanarayana Raju said.

Despite a significant increase in digital banking activities in the last few years, brick-and-mortar branches continue to be an important strategy for commercial banks, mainly from the point of view of deposit mobilisation. HDFC Bank, for example, has opened 908 branches in the last 12 months, which includes 146 during the October-December period. The private sector lender considers branches as an important part of its strategy to gain retail deposits.