Indian banks are overburdened, says study

February 9th, 2009 - 4:05 pm ICT by IANS  

New Delhi, Feb 9 (IANS) Indian banks are highly over-burdened, with every branch catering to a little over 16,000 individuals on an average - which is four to five times higher than the US and Britain, says an industry report released Monday.

“There is a stark difference between the scenarios in India and other countries,” said a joint study by global consultancy Ernst and Young and an industry lobby, the Associated Chambers of Commerce and Industry of India (Assocham).

While one branch was servicing 16,129 people in India, the report said this was 4,484 in Britain, 2,720 in the US, 3,968 in Japan, 4,545 in Hong Kong, 1,945 in Germany, 1,587 in France, 6,410 in Canada, and 10,101 in Singapore.

“The Indian banking system requires to widen its branch base to serve masses,” the paper said.

Indian banking institutions consist of more than 61,000 commercial bank branches, 100,000 cooperative credit institutions and 12,000 non-banking financial companies, besides a number of niche players such as micro-finance institutions and financial institutions.

At the same time, the study said, only 59 percent of the adult population in India has bank accounts compared to around 92 percent in Britain.

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