While we have been hearing narratives of digital banking, mobile banking, neo banking etc. India’s biggest banks have been opening more physical branches than ever before. Take a look at this:
- HDFC Bank plans to nearly double its branch network over the next three to five years.
- ICICI Bank which opened 484 branches in the last fiscal year is expected to open branches with a higher run rate in future.
- Axis Bank’s branch network grew from 4500 to 4700 in an year.
Overall, the graph below show that there has been continuous increase in the number of physical branches since the last 5 years (barring one exception)!
What can possibly explain this trend?
Do private banks feel that they need more branches to compete with public sector banks in rural sector? Would you consider a bank’s physical presence as a symbol of trust? Is a bank’s presence in customer’s vicinity important for it to be “remembered”? or something else?