In the wake of the recent banking scams reported, the government has directed public sector banks (PSBs) to consolidate nearly 35 overseas operations without affecting the banks' international presence in these countries.
In this regard, 69 operations were identified for further examination, including bank branches, joint ventures, subsidiaries, remittance centres and representative offices.
As per the Secretary of the Department of Financial Services(DFS), Rajeev Kumar, the proposal of consolidation aims to improve cost efficiency and synergies in the overseas market.
The ministry confirmed that a total of 216 overseas operations will be examined to ease the rationalisation of overseas operations.
Furthermore, non-viable operations in the overseas market, the ministry proposed, would be terminated for greater cost efficiency and synergy. Operations in the same geography will be consolidated, and equity stakes will be consolidated in the case of joint ventures having multiple PSB partners.
A number of banking cams have come to the forefront in the recent past, the most prominent one being the 1.77 billion dollar Punjab National Bank (PNB) fraud involving top jewellery designer Nirav Modi and others.
In the wake of these scams, there has been a greater nudge for complete privatisation of PSBs.
On Tuesday, the DFS secretary announced a 15-day deadline to the PSBs to take "pre-emptive" action for identifying gaps and to gear up for rising operational and technical risks. (ANI)