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The Hindu
6 days ago
- Business
- The Hindu
After a brief pause, physical bank branches are back
Over the last two years, India's private sector banks have been expanding their physical presence. The two biggest lenders — HDFC Bank and ICICI Bank — opened 3,284 and 1,341 branches, respectively, between 2022 and 2024. Both lenders also increased their workforce, adding 40,305 and 9,204 employees in FY 2024, respectively. In FY25, however, HDFC Bank added only 994 new employees, while ICICI Bank cut back its workforce by 6,723. The juxtaposition of expanding physical bank presence with a recent slowdown in hirings places Indian banking in new, uncharted waters. Traditionally, the presence of physical bank branches allowed banks to screen and monitor their borrowers. Proximity to their borrowers made it easier for bankers to gather 'soft' information and monitor their loans closely, especially for loans collateralised by movable properties. In a seminal paper published in 2002, Mitchell Peterson and Raghuram Rajan demonstrated that this model underwent a fundamental shift in the U.S. during the 1980s and 1990s, as banks adopted credit scoring technologies. Information technologies could substitute for the soft information based on local interactions. The average distance between a bank branch and its borrowers increased as a result. Similarly, the recent wave of digitisation in India has also fundamentally changed the need for close physical proximity between banks and their borrowers. Over the last few years, the digital revolution in India has streamlined various administrative and logistical tasks related to banking. Consequently, ease of access has improved for many individuals across the country. With the smartphone and 4G revolution ensuring affordable Internet access to the most remote corners, multiple banking services, including account creation, verification (via eKYC), and transactions (via UPI) are now possible online. Given this transformation, are traditional brick-and-mortar bank branches becoming obsolete? From the turn of the century, physical bank branches expanded significantly. Between 2008 and 2023, the number of commercial branches doubled from 25 per 1,000 sq km to 50. Concurrently, accessibility also improved, with the number of commercial bank branches per 1,00,000 adults rising from 9 to 14. The chart shows the bank branch availability over time. Both per capita and geographical branch growth have stabilised since 2016. This physical expansion was accompanied by financial inclusion schemes such as the Pradhan Mantri Jan Dhan Yojana, which aimed to provide a bank account to every Indian citizen. According to the Comprehensive Annual Modular Survey, conducted by the National Sample Survey Organisation, 94.6% of adults have an active bank account (2022-23). This phase of expansion was followed by a slowdown. Between 2020 and 2022, the rate of bank office closures saw a sharp uptick, despite new branches opening every quarter. Consequently, net bank branch openings fell sharply and stayed flat throughout this period. The chart shows the bank branch openings, closures and net additions over time This was a period of branch consolidation, with many small branches being subsumed into larger ones. But from the second half of 2022, banks began re-opening branches, which is reflected in the uptick in net openings. Between 2022Q3 and 2024Q4, 11,963 new bank branches were opened on net, compared to 1,787 net branches between 2020Q1 and 2022Q2. These closures were largely driven by public sector banks (PSBs), which closed 9,207 branches between 2019 and 2024, compared to private banks, which closed only 579 branches during the same period. PSBs closed an especially large number of branches in 2021 (3,519). From 2022H2 onwards, banks began reopening physical branches in large numbers. While private sector banks cumulatively added 15,537 branches between 2019 and 2024, PSBs added 8,995. In summary, public banks drove closures, and private banks drove post-pandemic openings. This does not imply, however, that the latter are emerging as substitutes for the former. While fully functioning PSBs are diminishing due to consolidation and amalgamation, they nevertheless continue to service large segments of the population via banking correspondents (BCs). However, payment banks have emerged as the dominant player in this segment, adding between 1,50,000 and 3,00,000 new banking correspondents every year between 2019 and 2024. In comparison, public banks added between 15,000 and 33,000 new BCs, while the same number for private banks never exceeded 8,000. The chart shows the new bank correspondents by bank group (2019-2024) Over the last few years, banking in India has undergone a significant churn. Two lessons stand out. One, the reversal of branch closures indicates that brick-and-mortar offices remain an important means of mobilising deposits and providing credit. Bank branches also help impart financial education by spreading awareness about group-specific schemes and potentially facilitating cross-selling of relevant financial products, such as mutual funds and insurance. Two, PSBs and payment banks are rapidly expanding their physical presence via banking correspondents. Outsourcing basic bank services to BCs has possibly allowed these banks to exclusively offer other services online. Hence, by combining the power of the digital revolution with the continued expansion of their physical presence, Indian banks are entering a 'phygital' era, indicating that distance still matters in the digital age. Nirupama Kulkarni is a Professor at CAFRAL. Advait Moharir is an independent researcher
Time of India
31-05-2025
- Health
- Time of India
Tobacco use increases despite awareness efforts
Hubballi/ Belagavi: As World No-Tobacco Day is observed on May 31, health officials in the district highlighted the growing challenge of tobacco and gutka consumption, which is fuelling a surge in oral cavity cancers, hypertension, and heart disease. Despite bans, illegal sales persist, especially targeting youth. Tobacco usage has skyrocketed in adults and the younger population alike. Day by day, new users are added, resulting in a rise in devastating tobacco-related diseases such as hypertension, cardiac diseases, stroke, pulmonary diseases, and cancers such as head and neck malignancy, lung malignancy, colorectal malignancy, etc. According to the survey, adolescents and children are the prime targets of the tobacco industry when recruiting new smokers. About 20 million children aged 10–14 are estimated to be tobacco-addicted, according to a survey done by the National Sample Survey Organisation of the Indian govt. To this astounding figure, approximately 5,500 new users are added every day, resulting in two million new users each year. Dr Shashidhar K, head of the department of surgical oncology, Karnataka Medical College-Research Institute (KMCRI), said that they are currently treating 50-60 patients with this cancer, often caused by tobacco use. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Alerta: Você tem zumbido no ouvido? Dica de ouro pode aliviar! Zumbido no ouvido Undo Major surgeries are performed on 500 people, and minor surgeries are performed on 700 people. "Nowadays, youth are addicted to tobacco. There are several ways to curb tobacco addiction, such as chewing on sugar-free gums or lozenges, using prescription nicotine nasal spray or patches, avoiding triggers, trying to incorporate physical activities such as sports, yoga, meditation, and seeking help from a professional de-addiction therapist," Dr Shashidhar said. Shashidhar said that the World No Tobacco Day campaign aims at curbing the deceptive marketing tactics of the tobacco industry. There are proven ways to prevent youth from using tobacco and avoid a lifetime of addiction, such as family expectations and communication, education about the risks and consequences of using tobacco, etc. Awareness rally World No Tobacco Day was observed at Karnataka Medical College and Research Institute, Hubballi, on Saturday. The department of surgical oncology organised an awareness programme today on the current year's theme: 'Unmasking the Appeal: Exposing Industry Tactics on Tobacco and Nicotine Products'. An awareness rally was held on the hospital premises near the outpatient department. Doctors and nurses actively participated in the rally, displaying placards on the devastating consequences of continued tobacco use. A street play was performed by nursing students, displaying the ill effects of tobacco, which was well received by the audience. Dr SF Kammar, director of KMCRI, and others were present. Awareness programme at Belagavi college The NSS cell of BV Bellad Law College, Belagavi, organised an awareness programme to mark World No Tobacco Day on Saturday. The event aimed at spreading awareness about the ill-effects of tobacco and the need to adopt a healthier lifestyle. Being the chief guest, Dr Vivek Honalli, district malaria officer, emphasised the grave health consequences associated with tobacco consumption. Dr Shweta Patil, district consultant, tobacco control programme, spoke on the govt initiatives aimed at tobacco control and the importance of youth participation in building a tobacco-free society. College principal Jyoti G Hiremath appreciated the efforts of the NSS Cell.
