HSBC to halve branches in India as customers go digital

HSBC to halve branches in India as customers go digital

FPJ BureauUpdated: Friday, May 31, 2019, 03:13 PM IST
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Mumbai : British lender HSBC announced a consolidation exercise under which it will almost halve its branches in the country to 26 as customers shift to digital alternatives for their banking transactions.

The exercise will also lead to over 300 jobs being affected, which is less than one per cent of its total workforce of over 33,000 people in the country, and “redeployment opportunities will be accorded to the affected employees”, the bank said.

The total number of branches will be coming down to 26 in 14 cities from 50 in 29 cities earlier, with a bulk of the impact in smaller centres. It added that the impacted branches account for only 10 per cent of the customer base in the country. The reduction in branches is due to customers’ adoption of digital solutions, it said. “This change reflects changes in customer behaviour, who are increasingly using digital channels for their banking,” the bank said.

It is closing branches in Guwahati, Indore, Jodhpur, Lucknow, Ludhiana, Thane, Mysore, Nagpur, Nashik, Patna, Raipur, Surat, Trivandrum, Vadodara and Visakapatnam, while bigger cities like Kolkata (5 branches), Chennai (1), Delhi (2) and Pune (1) will also be impacted.

“India is a priority market for HSBC and we will continue to invest to achieve sustainable growth by supporting the needs of our customers,” HSBC India’s chief executive Stuart Milne said.

The bank said India was the fourth biggest contributor to the group with a pre-tax profit of USD 606 million in 2015 and the retail business is “core” to its India franchise.

The announcement comes at a time when the Reserve Bank has asked foreign lenders to turn into wholly-owned subsidiaries (WOS) rather than operate as branches of foreign entities. Singaporean lender DBS Bank, one of the first ones to apply for WOS conversion, has announced aggressive plans to expand its physical presence in the country.

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