Canara Bank To Merge 70 Branches On Revamp Drive

The bank has decided to merge 70 branches and the process is on with 10 of them. It is also looking at 250 loss-making branches for rationalisation. "Rationalisation of existing branch network has assumed added significance as we are focusing on improving operational efficiency and profit earning capacity of branches," a highly placed official said. The bank has 2398 branches all over India.

The concept of satellite office is quite new as few banks are mulling over the option. Canara Bank will perhaps be the pioneer in this venture. "This is targetted at the rural sector, where the branch will be opened for two days a week for few hours," the official added.

 

The bank will spin off business of a branch, such as government business, small scale industry and industrial finance for improved efficiency of operations and split branches within the same centre because of space constraint for better customer service. The bank has also decided to upgrade existing extension counters into full-fledged branches and convert specialised branches into regular branches.

The bank is also in the process of implementation of its information technology (IT) programme. "With the adoption of IT and networking of computerised branches, Canara Bank is adopting cluster approach in metro centres, wherein a cluster of branches will be connected to a main branch for all back-office functions", the official said.

Canara Bank posted a net profit of Rs 236 crore for 1999-2000, a 4.89 per cent growth over Rs 225 crore recorded last year. The operating profit was lower at Rs 923 crore compared with Rs 957 crore in the previous fiscal. Total deposits of the bank were Rs 48,001 crore and net advances were Rs 23,547 crore with a credit deposit ratio of 53 per cent at the end of last fiscal.

Its non performing assets (NPA) at the end of last fiscal stood at Rs 1,200 crore, which is 5.28 per cent of net advances. The bank's gross NPA was Rs 1,967 crore.

The bank has also decided to launch 48 ATM centres all over India, in addition to the existing 12. This is part of the bank's drive to have 60 ATM centres by the end of this fiscal. These centres will be set up in Hyderabad, Calcutta, Pune, Lucknow and Chandigarh.

Canara Bank has joined the MasterCard ATM network, the first public sector bank to do so. The bank will get a fixed fee per MasterCard customer who accesses the bank's ATM for making a transaction.

It may be mentioned that Standard and Poor (S&P) accorded a `BBPI' rating for the nationalised Canara Bank early this year indicating that the bank continues to be under the moderate risk category.

The `BBPI' is the same rating given to Canara Bank when S&P rated its financial strength in 1998. Moody's too has given the bank a rating on similar lines few months ago and is better than the rating the agency had accorded two years ago.