chapter iv distribution of branches of commercial...

79

CHAPTER IV

DISTRIBUTION OF BRANCHES OF COMMERCIAL BANKS IN

INDIA: AN ANALYSIS Preceding chapter provided a brief sketch of the branch expansion policy of

the RBI as a basis for analysis on the chosen topic. In subsequent pages the researcher

has come out with relevant inferences concerning the distribution of bank branches in

India.

Growth of Bank branches in India

During the period of study branches of banks in India have grown by 25143

registering a CAGR of 3.20%and the overall growth rate stands at 37.01%.The pace

of branch expansion during 2006-2011(an increase of 21395 branches) is impressive

vis-à-vis 2001-2006(an increase of 2436 branches) in coincidence with the financial

inclusion agenda of the Government. Population per Branch has declined by 2385

during the study period. An increase in population per Branch is noted (from 15083 to

16064) during 2001-2005 where as in the post financial inclusion period of 2007-

2011, it has declined by 3366. Table 4.1 gives the relevant data.

Table 4.1

DISTRIBUTION OF BRANCHES OF COMMERCIAL BANKS IN INDIA - A Bird's

eye view

Year as on March Number of Branches of Scheduled Commercial Banks in India

Population per Bank Branch

2001 67937 15083 2002 68195 14595 2003 68500 14352 2004 69170 16160 2005 70373 15839 2006 71685 16064 2007 74346 15684 2008 78666 15283 2009 82794 14649 2010 88203 13366 2011 93080 12698

CAGR 3.20% Objective : for every 2000 Population one

Bank Branch Total Increase 25143

Growth 37.01% Source: Statistical Tables Relating to Banks in India, Reserve Bank of India

80

The three-dimensional analysis of bank distribution branches of commercial

banks in India is presented as follows;

I. Region-Wise Distribution

II. Bank-Wise Distribution

III. Population-Wise Distribution

I. Distribution of Bank Branches: Region wise

The region-wise analysis is done under 1) State-Wise distribution, 2)

Population-wise distribution and 3) Bank-group-Wise distribution.

The researcher has analyzed the distribution of bank branches across different

regions. The region-wise classification adopted by the Reserve Bank of India is used

in this regard. Thus, the different regions are 1) Northern Region, 2) North Eastern

Region, 3) Eastern Region, 4) Central Region, 5) Western Region and 6) Southern

Region.

In the above said regions, Northern Region consists of 2 Union Territories

(UT) and 5 States, totaling 7, North Eastern Region encompasses only 7 States,

Eastern Region comprises of 1 UT and 5 States, totaling 6, Central Region represents

only 4 States, Western Region accommodates 2 UT and 3 States and finally the

Southern houses 2 UT and 4 States totaling to 6. So as to summarize there are 6

regions with 7 UTs and 28 States.

1) State-wise Distribution of Bank Branches across regions:

Banks in India always strive to ensure balanced regional development. The

RBI on its part emphasizes that banks to have concentrate on unbanked and under

banked centers in different states for opening up of new places of business. In this

backdrop, Table 4.2 to 4.8 portrays the distribution of bank branches in the various

states, region wise.

81

Table 4.2 : State-wise Distribution of Bank Branches in Northern Region

State/UT 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Net

Increase

CAGR

%

Chandigarh 204 207 217 228 236 254 267 297 312 327 337 133 5.15

Delhi 1520 1558 1584 1648 1736 1835 1973 2149 2321 2508 2685 1165 5.85

Haryana 1545 1569 1608 1639 1701 1781 1899 2064 2214 2470 2716 1171 5.80

Himachal

Pradesh 788 791 795 797 809 829 869 910 963 1034 1082 294 3.22

Jammu &

Kashmir 838 849 854 865 882 900 923 978 1009 1040 1071 233 2.48

Punjab 2597 2624 2661 2705 2772 2853 3002 3207 3371 3647 3984 1387 4.37

Rajasthan 3388 3397 3402 3437 3490 3540 3702 3903 4050 4263 4532 1144 2.95

Total 10880 10995 11121 11319 11626 11992 12635 13508 14240 15289 16407 5527 4.19

Source: Statistical Tables Relating to Banks in India, Reserve Bank of India

Table 4.2 deals with the state-wise distribution of bank branches in Northern

region.

Among the seven states in the region, Punjab, the biggest state in terms of

geographical area has opened the highest number of branches (1387), in absolute

terms during the study period, followed by Rajasthan which has added 1144 branches.

Chandigarh, the lone UT in the Region has opened the least number of

branches numbering 133, followed by Jammu and Kashmir the trouble prone state

which has opened 234 branches during the study period 2001-2011.

In terms of CAGR of branches Delhi tops the list with a figure of

5.85%followed by Haryana (5.80%) and Chandigarh (5.15%).

Himachal Pradesh (HP), Jammu & Kashmir (J&K), and Rajasthan are the

laggards in terms of CAGR as their figures of 3.22%, 2.48% and 2.59% respectively

are much below the average of the CAGR of branches in Northern Region as a whole

identified at 4.19%.

82

Though Punjab and Rajasthan are the front runners in branch expansion in

absolute terms, their figures of CAGR are not quite impressive indicating that banks

in those states failed to exhibit stability in their annual branch expansion plans.

The pace of branch expansion has gained momentum during 2006-2011

(which may be christened as the post-financial inclusion era on a continuum basis,

ensures scope for concurrent research on the efficacy of Financial Inclusion

Programs/Plans-FIP) in all states of the region.

Thus it can be concluded that in the Northern Region, Banks have to further

exploit the banks potentials in States such as HP, J& K and Rajasthan.

Table 4.3:State-wise Distribution of Bank Branches in North Eastern Region

State/UT 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Net

Increase

CAGR

%

Arunachal

Pradesh 69 69 69 67 68 70 73 74 77 81 88 19 2.46

Assam 1268 1256 1255 1263 1273 1285 1326 1381 1425 1494 1558 290 2.08

Manipur 80 79 79 77 78 78 77 76 81 81 84 4 0.49

Meghalaya 181 181 182 184 185 191 191 194 206 214 221 40 2.02

Mizoram 80 80 80 80 81 81 86 92 95 99 101 21 2.36

Nagaland 71 71 71 72 73 75 80 83 87 91 96 25 3.06

Tripura 184 184 183 185 186 189 195 208 220 240 248 64 3.03

Total 1933 1920 1919 1928 1944 1969 2028 2108 2191 2300 2396 463 2.17

Source: Statistical Tables relating to Banks in India, Reserve Bank of India.

During the study period, the CAGR of the North Eastern Region is at 2.17% as per

Table 4.3, which is at a dismal range of expansion and the Reserve Bank of India in its recent

Branch Authorization Policies has totally liberalized the opening of the branches as per the

discretion of the banks. The Seven Sister States’ performance of this region ranges in

between 0.49% Manipur and3.06% of Nagaland. Five states are above the CAGR rate of

2.17% of the region. In absolute terms the highest number of branches (290) has been added

by Assam and the least of 4 is by Manipur.

83

Table 4.4: State-Wise Distribution of Bank Branches in Eastern Region

State/UT 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total

Increase

CAGR

%

Andaman

& Nicobar 31 31 31 32 33 34 37 37 37 40 42 11 3.08

Bihar 3616 3619 3621 3623 3648 3675 3712 3792 3942 4180 4348 732 1.86

Jharkhand 1471 1482 1488 1501 1520 1546 1587 1668 1769 1885 1999 528 3.11

Orissa 2268 2274 2275 2289 2321 2376 2479 2633 2752 2909 3068 800 3.07

Sikkim 47 48 48 49 55 58 64 71 71 77 83 36 5.85

West

Bengal 4568 4574 4584 4618 4680 4747 4866 5054 5211 5499 5707 1139 2.25

Total 12001 12028 12047 12112 12257 12436 12745 13255 13782 14590 15247 3246 2.42

Source: Statistical Returns relating to Banks in India, Reserve Bank of India

Table 4.4 indicates that the CAGR of the region is marginally below 2.50%

and Sikkim tops the list with 5.85% and it is followed by a score of 3.11% by

Jharkhand. In the other extreme it is Bihar and West Bengal with a score of 1.86%

and 2.25% respectively. In total three states are above the regions’ score and the rest

of two fall below it. During the study period in absolute terms the highest number of

branches of 1139 has been added by West Bengal and the least (11) is scored by

Andaman & Nicobar being the only one Union Territory in this region.

Table 4.5: State-Wise Distribution of Bank Branches in Central Region

State/UT 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total

Increase CAGR

Chhattisgarh 1066 1058 1058 1058 1066 1075 1111 1183 1262 1356 1442 376 3.07%

Madhya

Pradesh 3541 3544 3536 3547 3587 3612 3679 3878 4096 4319 4500 959 2.43%

Uttar

Pradesh 8338 8353 8366 8425 8520 8657 8947 9446 9921 10585 11119 2781 2.92%

Uttarkhand 855 859 872 888 907 930 960 1056 1112 1213 1291 436 4.21%

Total 13800 13814 13832 13918 14080 14274 14697 15563 16391 17473 18352 4552 2.89%


84

The Central region is the tiniest region among others and the CAGR ticks at

the rate of 2.89% as per Table 4.5. Uttarkhand, Chhattisgarh and Uttar Pradesh stand

high with CAGR of 4.21%, 3.07%, and 2.92% respectively. Madhya Pradesh scores

the lowest with 2.43%. Among the four, three states are above the score of the region

as a whole and the remaining one is below the benchmark. In absolute terms being

the bigger state, Uttar Pradesh records for the highest number of branches (2781) and

the lowest is by Chhattisgarh.

During the study period the CAGR of Western Region is 3.13% as per Table

4.6. In this region Dadra & Nagar Haveli tops the list with 12.27%, which is almost

four times higher than the growth rate of regional score. The next best is Daman &

Diu with 4.81%. On the bottom side Gujarat has recorded a CAGR of 3.01%.

Among the total of five states of the region four of them are above the CAGR of the

region and rest is below the same. In absolute terms the highest number of branches

of 2380 has been added by Maharashtra, and the lowest by Union Territory Daman

Diu (9).

Table 4.6: State-wide Distribution of Bank Branches in Western Region

State/UT 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total

Increase CAGR

Daman &

Diu 15 16 16 16 16 16 18 18 18 20 24 9 4.81%

Dadra &

Nagar Haveli 11 11 12 12 12 12 20 21 24 28 35 24 12.27%

Goa 337 339 340 346 353 367 380 409 427 451 479 142 3.58%

Gujarat 3798 3780 3771 3789 3845 3887 4051 4289 4492 4796 5111 1313 3.01%

Maharashtra 6558 6593 6594 6633 6760 6867 7090 7465 7961 8456 8938 2380 3.14%

Total 10719 10739 10733 10796 10986 11149 11559 12202 12922 13751 14587 3868 3.13%

Source: Statistical Tables relating to Banks in India, Reserve Bank of India

85

Table 4.7 highlights that CAGR of Southern Region is 3.44%. In this region

Pudhucherry tops with a bank branch expansion score of CAGR of 6.34%. Andhra

Pradesh is in second place with a CAGR of 3.78%. On the bottom side Lakshadweep

comes first and Karnataka ranks second. Overall exactly fifty percent of the total

states in the region are falling above the CAGR score of the region. In the study

period the highest number of branches has been added by Andhra Pradesh (2384) and

the lowest of three branches by Lakshadweep.

Table 4.7 State-wise Distribution of Bank Branches in Southern Region

State/UT 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total Increase CAGR

Andhra

Pradesh 5299 5346 5400 5448 5564 5654 5874 6351 6746 7240 7683 2384 3.78%

Lakshadweep 9 9 9 9 9 10 10 10 11 12 12 3 2.92%

Karnataka 4899 4921 4958 5045 5143 5259 5434 5732 6010 6371 6617 1718 3.05%

Kerala 3390 3427 3475 3550 3626 3708 3859 4053 4211 4464 4711 1321 3.35%

Pondicherry 86 84 86 85 90 93 102 112 131 148 159 73 6.34%

Tamil Nadu 4921 4912 4920 4960 5048 5141 5403 5772 6159 6565 6909 1988 3.45%

Total 18604 18699 18848 19097 19480 19865 20682 22030 23268 24800 26091 7487 3.44%


Table 4.8: Inter Region-Wise Distribution of Bank Branches


North Eastern 1933

1920 1919 1928 1944 1969 2028 2108 2191 2300 2396

463 2.17% (3%) (3%)

Eastern 12001

12028 12047 12112 12257 12436 12745 13255 13782 14590 15247

3246 2.42% (18%) (16%)

Western 10719

10739 10733 10796 10986 11149 11559 12202 12922 13751 14587

3868 3.13% (16%) (16%)

Central 13800

13814 13832 13918 14080 14274 14697 15563 16391 17473 18352

4552 2.89% (20%) (20%)

Northern 10880

10995 11121 11319 11626 11992 12635 13508 14240 15289 16407

5527 4.19% (16%) (18%)

Southern 18604

18699 18848 19097 19480 19865 20682 22030 23268 24800 26091

7487 3.44% (27%) (27%)

Grand Total

(All Regions)

67937 68195 68500 69170 70373 71685 74346 78666 82794 88203

93080 25143 3.20% (100%) (100%)


86

Table 4.8 makes an inter region wise comparison of distribution of branches.

Among the regions, North Eastern regions records the lowest number of branches

opened and Southern region tops the list of new branches added. Among the regions

Southern region accounts for the highest number of branches of 26091 and Northeast

records the lowest with 2396 branches. In terms of CAGR, in the post financial

inclusion period North East does well. Overall the market share is high for southern

region at 27% and lowest at 3% for North Eastern during the study period. To

improve the spread of banking services in the North Eastern region the RBI is taking

all possible measures and it is evidenced by the liberalization of Branch Authorization

policy which allows interested banks to open branches at their discretion without any

prior approval or permission.

2) Population-wise Distribution of Bank Branches across regions:

Banks in India strive hard to cater to all the population groups spread across

the different regions, terrains, and landscapes of the country. Population Wise

classification is based on the location of branches in four different centers such as

Rural, Urban, Semi-Urban and Metropolitan. Tables 4.9 to 4.14 deals with the

relevant data

Table 4.9: Population-wise Distribution of Bank Branches in Northern Region

Population-

wise 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Total

increase CAGR

Rural 5002 5011 4993 4984 4733 4656 4712 4818 4931 5117 5422 420 0.81%

Semi-Urban 2076 2102 2137 2190 2089 2229 2384 2620 2843 3144 3567 1491 5.56%

Urban 1884 1921 1983 2050 2328 2482 2709 2992 3153 3445 3595 1711 6.67%

Metro 1918 1961 2008 2095 2476 2625 2830 3078 3313 3583 3823 1905 7.14%

Total 10880 10995 11121 11319 11626 11992 12635 13508 14240 15289 16407 5527 4.19%


87

In the northern region, the highest number of branches is opened in metro

centers(1905) and in rural centers the least number of branches( 420) have been

opened. The same trend is visualized in terms of CAGR also.

Table 4.10: Population-wise Distribution of Bank Branches in North-Eastern

Region

Population-

wise 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Total

increaseCAGR

Rural 1260 1246 1236 1229 1193 1178 1175 1178 1199 1224 1236 -24 -0.19%

Semi-Urban 383 383 388 395 427 448 473 499 531 581 632 249 5.14%

Urban 290 291 295 304 324 343 380 431 461 495 528 238 6.18%

Metro 0 0 0 0 0 0 0 0 0 0 0 0 0.00%

Total 1933 1920 1919 1928 1944 1969 2028 2108 2191 2300 2396 463 2.17%


In North East region Semi urban branches have increased by 249 and urban

branches have increased by 238. But number of rural branches has declined by24.

Table 4.11: Population-wise Distribution of Bank Branches in Eastern Region

Population-

wise 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Total

increase CAGR

Rural 7431 7424 7395 7378 7241 7187 7195 7276 7365 7561 7729 298 0.39%

Semi-Urban 1861 1874 1886 1907 1879 1947 2057 2219 2416 2678 2964 1103 4.76%

Urban 1636 1653 1684 1729 1719 1855 2009 2220 2407 2659 2792 1156 5.49%

Metro 1073 1077 1082 1098 1418 1447 1484 1540 1594 1692 1762 689 5.08%

Total 12001 12028 12047 12112 12257 12436 12745 13255 13782 14590 15247 3246 2.42%


Table 4.11 portrays the population wise distribution of bank branches in

eastern region. In the region the penetration of bank branches is more in urban centers

in terms of CAGR (5.49%) and in absolute terms (1156), and the least in terms of

both CAGR (0.39%) and absolute numbers (298) are in the rural centers. It can be

inferred that the difference of expansion is minimal (53) between semi urban (1103)

and urban centers (1156).

88

Table 4.12: Population-wise Distribution of Bank Branches in Central Region

Population-

wise 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Total

increase CAGR

Rural 8063 8027 7998 7951 7604 7520 7515 7653 7805 7987 8192 129 0.16%

Semi-Urban 2509 2527 2536 2566 2628 2704 2817 3048 3312 3667 4053 1544 4.91%

Urban 2273 2294 2319 2379 2218 2327 2525 2848 3129 3512 3699 1426 4.99%

Metro 955 966 979 1022 1630 1723 1840 2014 2145 2307 2408 1453 9.69%

Total 13800 13814 13832 13918 14080 14274 14697 15563 16391 17473 18352 4552 2.89%


Table 4.12 highlights the population wise distribution of bank branches in

central region. Metropolitan centers scores first with a high CAGR of 9.69% and as

usual the rural centers with a least CAGR of less than half percentage. Both semi

urban and urban centers move closer to each other with 4.91% and 4.99% of CAGR,

in terms of rolling out branches.

In absolute terms the highest number of branches is opened by urban centers

(1544) and the lowest is by rural centers(129).

Table 4.13: Population-wise Distribution of Bank Branches in Western Region

Population-

wise 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Total

increase CAGR

Rural 4015 4010 3936 3891 3661 3617 3652 3716 3789 3889 4027 12 0.03%

Semi-Urban 2130 2141 2172 2196 2245 2275 2378 2564 2736 2976 3255 1125 4.33%

Urban 1443 1452 1474 1511 1427 1447 1549 1679 1838 2005 2125 682 3.95%

Metro 3131 3136 3151 3198 3653 3810 3980 4243 4559 4881 5180 2049 5.16%

Total 10719 10739 10733 10796 10986 11149 11559 12202 12922 13751 14587 3868 3.13%


During the study period the CAGR of western region as a whole is 3.13% as

per Table 4.13. In this region metropolitan centers holds the highest CAGR of 5.16%.

The lowest CAGR is represented by rural centers at 0.03%. Among the four centers

89

except the rural centers all other centers are above the CAGR of the region with

4.33%, 3.95%, and 5.16% respectively in their order.

In absolute terms the highest number of branches is opened in Metro centers

(2049), because the region is dominated by the industrially highly thriving states like

Gujarat, Maharashtra and Goa. Next to metro centers comes the semi-urban centers

with 1125 branches in increase. The net increase in rural centers is only 12 branches.

Table 4.14: Population-wise Distribution of Bank Branches in Southern Region

Population-

wise 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Total

increase CAGR

Rural 6814 6785 6725 6666 6358 6278 6326 6464 6587 6751 6996 182 0.26%

Semi-Urban 5884 5935 6016 6120 6057 6208 6511 6947 7375 7976 8577 2693 3.84%

Urban 3667 3717 3811 3918 4403 4580 4877 5360 5705 6172 6417 2750 5.76%

Metro 2239 2262 2296 2393 2662 2799 2968 3259 3601 3901 4101 1862 6.24%

Total 18604 18699 18848 19097 19480 19865 20682 22030 23268 24800 26091 7487 3.44%


Table 4.14 shows that the southern region is progressive in adding branches in

all population centers. The overall CAGR of the region is at 3.44%. The CAGR of

the metro centers is the highest at 6.24% and it is followed by urban centers at 5.76%.

The lowest CAGR among the population centers is scored by the rural centers with

0.26%.

In absolute terms urban centers added more branches at 2750 and it is closely

followed by semi-urban centers with 2693 branches. The least is by rural centers with

182 branches alone.

90

Table 4.14(a): Population-wise Net increase in the Distribution of Bank

Branches of All Regions

Population-

wise

Northern

Region

North East

Region

Eastern

Region

Central

Region

Western

Region

Southern

Region

Net

increase

Market

Share

Rural 420 -24 298 129 12 182 1017 4.04%

Semi-Urban 1491 249 1103 1544 1125 2693 8205 32.63%

Urban 1711 238 1156 1426 682 2750 7963 31.67%

Metro 1905 0 689 1453 2049 1862 7958 31.65%

Total 5527 463 3246 4552 3868 7487 25143 100.00%


As per Table 4.14(a) the highest number of new branch added belong to the

Semi Urban centers. In other words out of 25143 branches opened during the study

period 32.63% falls in the category of semi urban centers. In contrast only

4.07%(1017) of branches have been opened in rural areas.

From the interpretation of the Tables 4.9 to 4.14, it is inferred that the CAGR

of rural center has not crossed 1% across the board for any of the region. Besides this

it is derived that in absolute terms southern region claims to be well banked with an

addition of 7487 branches across the board in all its population centers and it is

followed by Northern region’s spread of 5527 branches in all its population centers.

3) Bank Group-wise Distribution of branches across regions:

In this part of the research, the researcher indentifies how the different

categories of banks are expanding their branches in different regions. It is apt to

explore which type of bank groups are strategically /proactively initiating as a first

mover to tap the potential of the banking business at the bottom of the pyramid. This

reiterates/exhorts to view the financial inclusion as more of business opportunity than

treating it as a mandated social obligation or to fulfill their corporate social

responsibilities under outreach programs.

91

Table 4.15 t0 4.20 deals with Bank Group-wise Distribution of branches

across regions:

Table 4.15: Bank Group-wise Distribution of Branches in Northern Region

Bank

Category 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Net

increase CAGR

SBI &

Associate 2488 2498 2515 2538 2579 2652 2750 2950 3066 3304 3494 1006 3.45%

Nationalized

Bank 5524 5562 5598 5679 5792 5921 6404 6628 6973 7722 8240 2716 4.08%

Private

Bank 959 1024 1105 1201 1257 1707 1675 1927 2092 2314 2663 1704 10.75%

Foreign

Bank 43 43 49 54 57 61 64 67 69 70 72 29 5.29%

RRBs 1864 1867 1863 1846 1939 1649 1739 1920 1974 1862 1916 52 0.28%

LABs 2 1 1 1 2 2 3 16 16 17 22 20 27.10%

Total 10880 10995 11131 11319 11626 11992 12635 13508 14190 15289 16407 5527 3.64%


Table 4.15 highlights that in northern region, private sector banks, and that too

new generation private sector banks are more aggressive in adding branches and it is

revealed by the CAGR of 10.75%. Even though the CAGR of Local Area Banks

stands highest at 27.10%, which is above the private sector, but logically interpreting

its market share is of miniscule to the extent of negligible numbers. The CAGR of the

region as a whole bench marks at 3.64%. The CAGR of LABs, private sector banks,

foreign banks and nationalized banks are above the regional score of 3.64% with

27.10%, 10.75%, 5.29% and 4.08% respectively. SBI group (3.45%) and RRBs

(0.28%) are below the regional benchmark. RRBs CAGR is at a very dismal space to

be focused immediately.

In absolute terms nationalized banks (2716) opened the highest number of

branches in the northern region, the second next higher number of expansion (1006) is

done by SBI. The lowest number of addition is done by LABs by 20 in actual

numbers.

92

Table 4.16: Bank Group-wise Distribution of Branches in North-Eastern Region

Bank Category 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Net

increase CAGR

SBI & Associate 455 455 455 460 465 477 485 496 522 548 558 103 2.06%

Nationalized Bank 805 800 792 795 805 814 837 871 900 950 990 185 2.09%

Private Bank 8 8 11 13 13 19 40 61 83 109 150 142 34.06%

Foreign Bank 1 1 1 1 1 1 1 1 1 2 2 1 7.18%

RRBs 664 656 658 659 660 658 665 679 686 691 696 32 0.47%

LABs 0 0 0 0 0 0 0 0 0 0 0 0 0.00%

Total 1933 1920 1917 1928 1944 1969 2028 2108 2192 2300 2396 463 1.14%


During the study period, as detailed in the Table 4.16, private sector banks

have shown a CAGR of 34.06% which is a tremendous growth compared to the

region as a whole with a bench mark CAGR of 1.14%.

This northeastern region will augur well with the commendable initiatives

taken by the RBI especially in terms of totally liberalizing the opening of branches in

this area under the extant Branch Authorization Policy. In absolute terms, over the

past decade it added only 463 branches, among these the major additions are from

nationalized banks (185) and private banks (142). A meager number of 32 branches

have been added by RRBs over the study period.

93

Table 4.17: Bank Group-wise Distribution of Bank Branches in Eastern Region

Bank

Category 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Net

increase CAGR

SBI &

Associate 2259 2260 2264 2262 2272 2316 2357 2468 2589 2883 2960 701 2.74%

Nationalized

Bank 5962 5980 5980 6026 6093 6180 6363 6601 6867 7276 7668 1706 2.55%

Private Bank 108 117 134 159 218 263 354 491 530 651 814 706 22.38%

Foreign Bank 36 37 33 33 37 38 37 38 37 39 39 3 0.80%

RRBs 3636 3634 3632 3632 3637 3642 3634 3657 3703 3741 3766 130 0.35%

LABs 0 0 0 0 0 0 0 0 0 0 0 0 0.00%

Total 12001 12028 12043 12112 12257 12439 12745 13255 13726 14590 15247 3246 2.11%


From the Table 4.17, it is explicit that private banks have been a major

contributor with a CAGR of 22.38% which is well ahead of the bench mark CAGR of

the eastern region at 2.11%. RRBs have shown a dismal figure of not even a CAGR

of half a percentage.

In absolute terms nationalized banks have done a commendable performance

by adding 1706 branches, and it is followed by private banks (706) and SBI &

Associates (701). LAB is non existent in this region.

Table 4.18 Bank group-wise Distribution of Bank Branches in Central Region

Bank

Category 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Net

increase CAGR

SBI &

Associate 2560 2564 2573 2579 2601 2638 2707 3029 3238 3493 3576 1016 3.40%

Nationalized

Bank 6408 6411 6395 6528 6614 6714 6996 7385 7687 8259 8791 2383 3.21%

Private

Bank 232 238 270 210 269 326 401 499 663 852 1013 781 15.88%

Foreign

Bank 2 2 6 8 11 16 18 20 20 23 24 22 28.21%

RRBs 4607 4608 4620 4593 4585 4580 4575 4630 4722 4846 4948 341 0.72%

LABs 0 0 0 0 0 0 0 0 0 0 0 0 0.00%

Total 13809 13823 13864 13918 14080 14274 14697 15563 16330 17473 18352 4543 2.56%


94

During the study period the central region has set a bench mark CAGR of

2.56%, which is far below the CAGR of foreign banks(28.21%), privates

banks(15.88%). Among the six category of banks except RRBs (0.72%) rest of the

bank types are all above the bench mark CAGR. LABs are nonexistent in this region.

During the study period in absolute terms the highest branch expansion has

been done by nationalized banks (2383) and it is followed by SBI and Associates. An

iota of addition is done by RRBs with 341 branches.

Table 4.19: Bank Group-wise Distribution of Bank Branches in Western Region

Bank

Category 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Net

increase CAGR

SBI &

Associate 2004 2008 2012 1992 2001 2040 2127 2343 2536 2727 2788 784 3.36%

Nationalized

Bank 6701 6680 6639 6614 6697 6737 7082 7319 7552 8006 8390 1689 2.27%

Private

Bank 923 956 1007 1101 1195 1282 1252 1425 1606 1870 2235 1312 9.25%

Foreign

Bank 79 79 72 79 87 90 94 97 102 109 113 34 3.64%

RRBs 1009 1010 1032 999 1004 998 1000 1014 1023 1035 1057 48 0.47%

LABs 3 6 6 10 2 2 4 4 4 4 4 1 2.92%

Total 10719 10739 10768 10795 10986 11149 11559 12202 12823 13751 14587 3868 2.70%


Table 4.19 depicts the space of branch expansion in western region with a

bench mark CAGR of 2.70%. Private banks have expanded more branches at the rate

of 9.25% of CAGR. It is followed by foreign banks at a CAGR of 3.64%. RRBs

(0.47%) and nationalized banks (2.27%) are below the benchmark CAGR of the

region as a whole and rest of them are above the same.

In absolute terms the more number of branches (1689) has been added by

nationalized banks and least (1) is by LABs. Overall the region has added 3868

branches.

95

Table 4.20: Bank Group-wise Distribution of Branches in Southern Region

Bank

Category 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Net

increase CAGR

SBI &

Associate 3884 3896 3916 3951 4003 4073 4185 4528 4781 5231 5447 1563 3.44%

Nationalized

Bank 8657 8646 8631 8911 9108 9258 9689 10332 10782 11383 11944 3287 3.27%

Private

Bank 3186 3249 3320 3255 3373 3514 3767 4051 4312 4783 5220 2034 5.06%

Foreign

Bank 43 45 46 50 53 58 61 61 66 69 72 29 5.29%

RRBs 2825 2851 2911 2914 2922 2938 2954 3032 3179 3307 3381 556 1.81%

LABs 9 13 14 16 21 24 26 26 26 27 27 18 11.61%

Total 18604 18700 18838 19097 19480 19865 20682 22030 23146 24800 26091 7487 3.15%


Table 4.20 enumerates the number of bank branches has been added by the

southern region as a whole in terms of CAGR of 3.15% and absolute numbers (7487).

Among the region LAB’s CAGR is high with 11.61% and it is followed by foreign

banks (5.29%) and private banks (5.06%). Except RRBs all other category of banks

are above the bench mark CAGR of the region.

In absolute terms the highest number of branches has been added by SBI and

Associates (3287) and it is followed by private banks (2034). The least number of

branches has been added by LABs (18) and foreign banks (29). RRBs have expanded

by rolling out 556 branches in the rural areas in the study period.

96

Table 4.20(a): Bank Group-wise Distribution of Branches in all Regions

Bank

Category

Northern

Region

North East

Region

Eastern

Region

Central

Region

Western

Region

Southern

Region

Net

increase

Market

Share SBI &

Associate 1006 103 701 1016 784 1563 5173 20.58%

Nationalized

Bank 2716 185 1706 2383 1689 3287 11966 47.61%

Private

Bank 1704 142 706 781 1312 2034 6679 26.57%

Foreign

Bank 29 1 3 22 34 29 118 0.47%

RRBs 52 32 130 341 48 556 1159 4.61%

LABs 20 0 0 0 1 18 39 0.16%

Total 5527 463 3246 4543 3868 7487 25134 100.00%

Source: Compiled by the researcher

Table 4.20(b): of Bank Group-wise Distribution of Branches as on March 2011

in all Regions

Bank

Category

Northern

Region

North East

Region

Eastern

Region

Central

Region

Western

Region

Southern

Region Total

Market

Share

SBI &

Associate 3494 558 2960 3576 2788 5447 18823 20.22%

Nationalized

Bank 8240 990 7668 8791 8390 11944 46023 49.44%

Private Bank 2663 150 814 1013 2235 5220 12095 12.99%

Foreign Bank 72 2 39 24 113 72 322 0.35%

RRBs 1916 696 3766 4948 1057 3381 15764 16.94%

LABs 22 0 0 0 4 27 53 0.06%

Total 16407 2396 15247 18352 14587 26091 93080 100.00%

Source: Compiled by the researcher

From the Table 4.20(a) and Table 4.20(b) it is inferred that nationalized bank

and SBI group are more aggressive in branch expansion during the study period.

II. Distribution of Bank Branches: Bank Group-wise Analysis

In this part of the study, the researcher has analyzed the distribution of bank

branches across different bank groups. The bank group-wise classification adopted by

the Reserve Bank of India is used in this regard. Thus, the different bank groups are 1)

97

State Bank of India & its Associate Banks, 2) Nationalized Banks, 3) Private Banks,

4) Foreign Banks, 5) Regional Rural Banks and 6) Local Area Banks.

In the following paragraphs, the 1) State-Wise, 2) Population-Wise and 3)

Region-Wise distribution of bank offices for different bank groups is analyzed

independently.

1) State-wise Distribution of branches across Bank Groups

State-wise Distribution of branches of SBI group

The State Bank of India and its associate banks are playing a pivotal role in

the Indian banking sector with a notable market share, and the state-wise distribution

of SBI and its Associate banks are depicted in Table 4.21. The analysis based on

Compounded Annual Growth Rate (CAGR) shows that Lakshadweep is leading with

the highest CAGR of 14.87% with regard to state-wise distribution of bank offices of

SBI and Associates during the study period (2001-2011). This is followed by Dadra &

Nagar Haveli (7.18%), Chandigarh (5.49%) and Puducherry (5.24%). However,

north-eastern states such as Mizoram, Arunachal Pradesh and Meghalaya have the

lowest CAGR performance during the study period with 0.39%, 0.47% and 0.67%

respectively. Out of 35 States and Union Territories, 13 are above the all India

average of 3.27% and the remaining 22 States and Union Territories have CAGR less

than the national average. The Table also shows that there is an increase of 5173 SBI

& Associate branches throughout the country during the study period. Of which,

Andhra Pradesh has performed well with regard to the number of branches added

during the study period with 653 branches. Uttar Pradesh (566) and Maharashtra

(442) are the next best performers in this regard. However, states and Union

Territories such as Mizoram, Dadra Nagar Haveli, Daman & Diu have added just one

branch during 2001 – 2011.

98

Table 4.21: State-wise Distribution of branches of SBI Group

States / UT 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Total Increase

CAGR

Andaman & Nicobar

18 18 18 18 18 18 18 18 18 21 21 3 1.55%

Andhra Pradesh

1405 1411 1422 1431 1452 1466 1504 1653 1732 1939 2058 653 3.89%

Arunachal Pradesh

42 42 42 42 42 42 42 42 43 44 44 2 0.47%

Assam 208 208 208 211 215 223 227 241 257 275 281 73 3.05% Bihar 568 568 568 567 570 581 587 612 624 716 750 182 2.82% Chandigarh 51 52 53 54 55 63 68 80 85 88 87 36 5.49% Chhattisgarh 252 250 249 250 251 257 263 289 314 336 341 89 3.07% Dadra & Nagar Haveli

1 1 1 1 1 1 1 1 1 1 2 1 7.18%

Daman & Diu

7 7 7 7 7 7 7 7 7 7 8 1 1.34%

Delhi 311 314 313 315 320 328 343 379 400 420 434 123 3.39% Goa 55 55 56 57 57 59 61 73 79 85 87 32 4.69% Gujarat 846 849 851 840 841 865 920 1018 1081 1131 1154 308 3.15% Haryana 316 318 324 325 341 358 370 397 410 465 485 169 4.38% Himachal Pradesh

220 220 222 224 227 230 235 247 254 270 292 72 2.87%

Jammu & Kashmir

123 123 123 125 128 132 135 143 145 156 161 38 2.73%

Jharkhand 379 379 379 378 378 388 395 406 430 473 492 113 2.64% Karnataka 943 945 950 967 985 1014 1029 1107 1159 1248 1270 327 3.02% Kerala 809 811 813 815 823 837 869 919 950 1025 1069 260 2.83% Lakshadweep 0 0 0 0 0 1 1 1 2 2 2 2 14.87% Madhya Pradesh

819 824 830 828 841 855 876 947 1027 1081 1088 269 2.88%

Maharashtra 1095 1096 1097 1087 1095 1108 1138 1244 1368 1503 1537 442 3.45% Manipur 16 16 16 16 17 17 18 17 20 20 21 5 2.76% Meghalaya 87 87 87 88 88 90 89 89 91 93 93 6 0.67% Mizoram 25 25 25 25 25 25 27 22 23 25 26 1 0.39% Nagaland 43 43 43 44 44 45 45 46 48 51 52 9 1.92% Odisha 484 484 484 486 489 508 530 570 616 676 693 209 3.65% Puducherry 15 15 15 15 15 15 18 20 22 25 25 10 5.24% Punjab 605 605 611 618 621 641 666 706 741 821 885 280 3.88% Rajasthan 862 866 869 877 887 900 933 998 1031 1084 1150 288 2.92% Sikkim 26 26 26 26 26 26 26 27 27 29 29 3 1.10% Tamil Nadu 712 714 716 723 728 740 764 828 916 992 1023 311 3.69% Tripura 34 34 34 34 34 35 37 39 40 40 41 7 1.89% Uttar Pradesh 1212 1213 1214 1220 1225 1238 1279 1459 1559 1717 1778 566 3.91% Uttarakhand 277 277 280 281 284 288 289 334 338 359 369 92 2.91% West Bengal 784 785 789 787 791 795 801 835 874 968 975 191 2.20% All India 13650 13681 13735 13782 13921 14196 14611 15814 16732 18186 18823 5173 3.27%

Source: Statistical Tables Relating to Banks in India, Reserve Bank of India.

99

Table 4.22: State-wise Distribution of Branches of Nationalized Banks

States / UT 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total Increase CAGR

Andaman & Nicobar

13 13 13 13 14 18 18 18 18 18 20 7 4.40%

Andhra Pradesh

2351 2366 2369 2401 2472 2508 2617 2851 2969 3106 3314 963 3.49%

Arunachal Pradesh

7 7 7 7 8 10 12 13 14 15 21 14 11.61%

Assam 641 637 629 632 637 641 655 678 699 740 766 125 1.80% Bihar 1550 1553 1555 1560 1574 1586 1622 1672 1747 1873 1965 415 2.40% Chandigarh 135 136 138 144 148 153 157 171 177 187 190 55 3.48% Chhattisgarh 359 352 353 353 356 360 382 415 442 484 542 183 4.21% Dadra & Nagar Haveli

8 8 8 8 8 8 11 11 11 15 19 11 9.04%

Daman & Diu 7 7 7 7 7 7 7 7 7 9 11 4 4.62% Delhi 1016 1028 1040 1061 1087 1128 1222 1304 1377 1496 1574 558 4.47% Goa 236 236 234 233 243 251 258 271 277 289 299 63 2.39% Gujarat 2403 2373 2367 2350 2368 2359 2406 2498 2563 2729 2872 469 1.80% Haryana 890 904 914 929 949 984 1048 1130 1206 1338 1455 565 5.04% Himachal Pradesh

433 433 433 435 441 448 467 486 518 565 585 152 3.05%

Jammu & Kashmir

141 141 142 142 145 147 155 163 167 182 189 48 2.97%

Jharkhand 690 700 702 711 724 733 756 815 849 918 992 302 3.70%

Karnataka 2258 2261 2262 2311 2368 2415 2523 2642 2760 2940 3061 803 3.09%

Kerala 1098 1100 1101 1242 1262 1284 1338 1407 1461 1548 1625 527 4.00%

Lakshadweep 9 9 9 9 9 9 9 9 9 10 10 1 1.06% Madhya Pradesh

1591 1590 1572 1581 1594 1599 1638 1718 1799 1908 2025 434 2.44%

Maharashtra 4047 4056 4023 4016 4071 4112 4400 4532 4694 4964 5189 1142 2.52%

Manipur 34 33 33 31 31 31 31 31 31 31 31 -3 -0.92%

Meghalaya 42 42 43 44 45 46 47 49 53 55 57 15 3.10%

Mizoram 2 2 2 2 3 3 5 8 9 9 10 8 17.46%

Nagaland 18 18 18 18 19 20 23 22 22 22 25 7 3.34%

Orissa 921 926 924 933 944 975 1026 1091 1127 1194 1298 377 3.49%

Pondicherry 53 51 52 52 54 55 61 70 72 78 82 29 4.46%

Punjab 1705 1714 1724 1739 1769 1790 2015 1956 2049 2347 2522 817 3.99%

Rajasthan 1204 1206 1207 1229 1253 1271 1340 1418 1479 1607 1725 521 3.66%

Sikkim 21 21 21 22 26 29 32 38 38 41 43 22 7.43%

Tamil Nadu 2888 2859 2838 2896 2943 2987 3141 3353 3511 3701 3852 964 2.92%

Tripura 61 61 60 61 62 63 64 70 72 78 80 19 2.75%

Uttar Pradesh 4089 4097 4096 4206 4262 4340 4542 4794 4957 5313 5624 1535 3.24%

Uttarakhand 369 372 374 388 402 415 434 458 489 554 600 231 4.98% West Bengal 2767 2767 2765 2787 2811 2839 2909 2967 3088 3232 3350 583 1.93%

All India 34057 34079 34035 34553 35109 35624 37371 39136 40761 43596 46023 11966 3.06%


100

The nationalized banks distribution is commendable across the length and

breadth of the country. Especially in backward states and Union territories, their

presence is much felt when compared to private banks. From Table 4.22, it is

understood that CAGR of State-wise distribution of nationalized bank offices is the

highest in Mizoram (17.46%) followed by Arunachal Pradesh (11.61%) and Dadra

Nagar Haveli (9.04%). Thus, the nationalized banks are concentrating on the least

developed states and union territories in establishing new branch offices. However,

Manipur, a north-eastern backward state has a negative CAGR (-0.92%). The

developed states such as Gujarat and West Bengal have experienced lowest CAGR

with 1.80% and 1.93% respectively. This implies that the nationalized bank offices

expansion is saturated in these states. The all India CAGR of state-wise distribution of

nationalized bank offices is just 3.06%, and twenty two States and union territories

have CAGR above the national average and thirteen have less than the national

average CAGR. The Tables also depicts that the nationalized banks have added 11966

branches during the study period across India, of which Uttar Pradesh (1535) and

Maharashtra (1142) have a greater share. The nationalized banks have closed three

branches in Manipur during the study period, which is not an encouraging scenario for

a backward north-eastern state like Manipur.

Table 4.23 depicts that the all India CAGR of state-wise distribution of private

bank offices is just 8.37%. The performance of twenty five states is above the all

India CAGR, whereas nine states and union territories are below. Tripura ranks top

with CAGR of 61.54%, followed by Mizoram (49.53%), Arunachal Pradesh (49.53%)

and Manipur (41.42%). Thus, the penetration of private bank offices in the north-

eastern states is high during the study period. However, the states such as Jammu

Kashmir, Kerala, Pondicherry and Tamilnadu have the lowest the CAGR during the

101

study period with just 3.07%, 3.28%, 3.34% and 4.61% respectively. Andaman and

Nicobar don’t see any growth with regard to private bank offices distribution, since

there were no new private bank offices opened. Though, private banks are playing a

vital role in the Indian Banking Sector, the number of branches added during 2001-

2011 was just 6679, which is less than the public sector banks and greater than the

SBI & its Associates during the same period. Tamilnadu seemed to be the heaven for

the private banks and thus they had opened 616 branches in that State. Andhra

Pradesh (519) and Delhi (473) are also the darlings of the private sector banks.

However, the private sector is not attracted towards the States and UT such as

Lakshadweep (0) and Andaman & Nicobar (1).

102

Table 4.23: State-wise Distribution of Branches of Private Banks

States / UT 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total Increase CAGR

Andaman & Nicobar 0 0 0 1 1 1 1 1 1 1 1 1 0.00%

Andhra Pradesh 374 389 402 416 437 475 540 610 679 822 893 519 9.09%

Arunachal Pradesh 1 1 2 4 5 5 49.53%

Assam 6 6 9 11 11 13 28 46 58 72 99 93 32.36%

Bihar 6 6 8 8 15 19 29 32 45 69 93 87 31.53%

Chandigarh 16 18 23 27 30 35 39 43 47 49 57 41 13.55%

Chhattisgarh 3 4 8 10 17 21 29 41 53 74 90 87 40.51%

Dadra & Nagar Haveli 2 2 3 3 3 3 8 9 12 12 14 12 21.48%

Daman & Diu 1 2 2 2 2 2 4 4 4 4 5 4 17.46%

Delhi 158 180 195 235 289 338 366 422 489 547 631 473 14.85%

Goa 46 48 50 56 53 57 61 65 68 77 93 47 7.29%

Gujarat 125 130 153 176 214 243 299 336 389 483 612 487 17.22%

Haryana 37 44 63 77 95 115 145 192 222 280 343 306 24.94%

Himachal Pradesh 4 4 5 5 8 11 25 28 36 44 49 45 28.47%

Jammu & Kashmir 397 408 413 424 348 452 464 498 517 520 537 140 3.07%

Jharkhand 4 5 9 14 20 27 38 49 65 80 98 94 37.69%

Karnataka 562 576 580 596 619 652 697 778 842 929 1017 455 6.11%

Kerala 1149 1163 1193 1121 1160 1198 1258 1332 1368 1460 1586 437 3.28%

Lakshadweep 0 0.00%

Madhya Pradesh 41 40 49 54 69 82 98 126 154 205 256 215 20.10%

Maharashtra 749 774 799 864 923 977 880 1011 1133 1294 1511 762 7.27%

Manipur 2 2 4 4 41.42%

Meghalaya 1 1 1 1 1 4 4 4 7 11 16 15 31.95%

Mizoram 1 2 3 5 5 5 49.53%

Nagaland 1 1 1 1 1 1 3 4 5 7 10 9 25.89%

Orissa 12 14 17 19 32 36 59 86 113 139 177 165 30.88%

Pondicherry 18 18 19 18 21 22 22 21 22 24 25 7 3.34%

Punjab 81 99 116 136 168 207 248 307 317 373 463 382 19.04%

Rajasthan 266 271 290 297 319 549 388 437 464 501 583 317 8.16%

Sikkim 1 1 1 3 3 6 6 6 7 11 11 30.53%

Tamil Nadu 1083 1103 1126 1104 1136 1167 1250 1310 1401 1548 1699 616 4.61%

Tripura 1 3 4 6 8 11 11 61.54%

Uttar Pradesh 156 161 173 103 133 167 205 251 360 461 545 389 13.33%

Uttarakhand 32 33 40 43 50 56 69 81 96 112 122 90 14.32%

West Bengal 86 91 99 116 147 177 221 317 300 355 434 348 17.57%

All India 5416 5592 5847 5939 6325 7111 7489 8454 9286 10579 12095 6679 8.37%


103

Table 4.24: State-wise Distribution of Branches of Foreign Banks

States / UT 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total

Increase CAGR

Himachal

Pradesh 1 1 0

-1 -100%

Jammu &

Kashmir 1 1 0

-1 -100%

West Bengal 36 37 33 33 34 35 33 34 33 35 35 -1 -0.28%

Assam 1 1 1 1 1 1 1 1 1 2 2 1 7.18%

Chandigarh 2 1 3 3 3 3 3 3 3 3 3 1 4.14%

Chhattisgarh 1 1 1 1 1 1 0.00%

Pondicherry 0 0 0 0 0 1 1 1 1 1 1 1 0.00%

Uttarakhand 2 1 1 1 -20.63%

Bihar 1 1 2 2 2 2 2 2 0.00%

Kerala 4 4 5 6 6 6 6 6 6 6 6 2 4.14%

Orissa 2 2 2 2 2 2 2 2 0.00%

Madhya Pradesh 1 1 3 5 5 5 5 5 5 5 0.00%

Rajasthan 1 1 3 3 3 3 5 5 6 6 6 5 19.62%

Andhra Pradesh 9 9 9 10 11 11 11 11 11 14 15 6 5.24%

Punjab 2 2 5 5 5 6 6 6 6 7 8 6 14.87%

Haryana 1 1 3 6 6 8 8 9 9 9 9 8 24.57%

Karnataka 11 12 12 12 13 16 18 18 19 19 19 8 5.62%

Gujarat 8 8 9 12 13 14 15 16 17 18 18 10 8.45%

Delhi 35 36 35 37 40 41 42 44 45 45 46 11 2.77%

Tamil Nadu 19 20 20 22 23 24 25 25 29 29 31 12 5.02%

Uttar Pradesh 2 2 5 7 8 11 12 12 14 16 17 15 23.86%

Maharashtra 71 71 63 67 74 76 79 81 85 91 95 24 2.95%

All India 204 207 207 225 246 264 275 284 295 312 322 118 4.67%


From Table 4.24, one could infer that there are 13 states which have no

presence of foreign banks and in States such as Jammu Kashmir (-100%), Himachal

Pradesh (-100%), Uttarakhand (-20.63%) and West Bengal (-0.28%) the CAGR of of

foreign bank offices is negative. However, a notable growth in CAGR is experienced

by states such as Haryana (24.57%), Uttar Pradesh (23.86%), and Rajasthan

(19.62%). The all-India CAGR of state-wise distribution of foreign bank offices

during the study period was 4.67%. The Table also reveals that 118 branches of

104

foreign banks have been opened across the length and breadth of the country, of

which Maharashtra (24), Uttar Pradesh (15) and Tamilnadu (12) are dominant states.

In States such as West Bengal, Himachal Pradesh, Jammu & Kashmir foreign banks

have shut one branch each.

The All-India CAGR of state-wise distribution of RRBs is just 0.77% since

the RRBs have experienced a consolidation scenario in the country (Table 4.25).

Puducherry has an exorbitant CAGR of 53.74%, which is followed by the states such

as Haryana (3.49%), Tamilnadu (3.33%), Tripura (2.68%) and Kerala (2.56%).

However, states such as Punjab, Arunachal Pradesh, Manipur and Assam have

negative CAGR with -8.45%, -1.05%, -0.69% and -0.05 respectively. There are eight

states and union territories which have no presence of RRBs. The RRBs witnessed the

phase of consolidation during the study period, yet they have added 1159 branches in

the country. Uttar Pradesh has attracted 276 new RRB branches during the study

period, followed by Andhra Pradesh (235). In Punjab, 119 branches have been closed.

The states such as Arunachal Pradesh, Assam and Manipur have also witnessed

closure of two branches each during the study period.

Local area banks (LABs) are of recent origin in the Indian banking industry

with private ownership. Though, they were introduced in the country with ambitious

objectives, they are not as successful as regional rural banks and cooperative banks.

Table 4.26 discloses the fact that the LABs have limited presence across Indian states

and union territories. However, the all-India CAGR of state-wise distribution of LABs

is 14.24%. The states such as Punjab, Karnataka, Maharashtra, and Andhra Pradesh

have a positive CAGR of 36.22%, 29.15%, 10.41% and 6.57% respectively.

Rajasthan, Gujarat and Puducherry have a negative CAGR of 100%. The Table also

reveals that the country as a whole has got 39 new LAB branches during the study

105

period, of which 21 branches were in Punjab. Karnataka (10) and Maharashtra (4)

have also got new LAB branches during the study period. However, three LAB

branches in Gujarat and a branch in Rajasthan were closed during the study period.

Table 4.25: State-wise Distribution of Branches of Regional Rural Banks

States / UT 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total

Increase CAGR

Andhra Pradesh

1151 1160 1177 1176 1176 1178 1185 1209 1290 1342 1386 235 1.88%

Arunachal Pradesh

20 20 20 18 18 18 18 18 18 18 18 -2 -1.05%

Assam 412 404 406 408 409 407 415 415 414 405 410 -2 -0.05%

Bihar 1492 1492 1490 1488 1488 1488 1472 1474 1498 1520 1538 46 0.30%

Chandigarh 0 0.00%

Chhattisgarh 452 452 452 445 442 437 436 437 444 461 468 16 0.35%

Gujarat 413 414 413 403 409 406 411 421 431 435 455 42 0.97%

Haryana 301 302 301 302 310 316 328 336 354 378 424 123 3.49%

Himachal Pradesh

130 133 133 133 133 140 142 149 153 155 156 26 1.84%

Jammu & Kashmir

176 176 176 174 261 169 169 174 178 182 184 8 0.45%

Jharkhand 398 398 398 398 398 398 398 398 406 414 417 19 0.47%

Karnataka 1125 1126 1153 1157 1153 1154 1158 1178 1202 1225 1240 115 0.98%

Kerala 330 349 365 366 375 383 388 389 401 425 425 95 2.56%

Madhya Pradesh

1099 1099 1098 1083 1080 1071 1062 1082 1104 1120 1126 27 0.24%

Maharashtra 596 596 619 596 595 592 589 593 592 600 602 6 0.10%

Manipur 30 30 30 30 30 30 28 28 28 28 28 -2 -0.69%

Meghalaya 51 51 51 51 51 51 51 52 54 55 55 4 0.76%

Mizoram 53 53 53 53 53 53 53 60 60 60 60 7 1.25%

Nagaland 9 9 9 9 9 9 9 11 11 11 9 0 0.00%

Orissa 851 850 849 851 854 855 862 884 898 898 898 47 0.54%

Pondicherry 11 20 26 26 53.74%

Punjab 203 203 205 206 207 207 64 216 228 82 84 -119 -8.45%

Rajasthan 1054 1053 1048 1031 1028 817 1036 1045 1061 1065 1068 14 0.13%

Tamil Nadu 219 216 216 215 218 223 223 256 275 295 304 85 3.33%

Tripura 89 89 89 90 90 90 91 95 101 114 116 27 2.68%

Uttar Pradesh

2879 2880 2894 2889 2892 2901 2909 2930 2991 3078 3155 276 0.92%

Uttarakhand 177 177 176 176 171 171 168 181 183 187 199 22 1.18%

West Bengal 895 894 895 895 897 901 902 901 901 909 913 18 0.20%

All India 14605 14626 14716 14643 14747 14465 14567 14932 15287 15482 15764 1159 0.77%


106

Table 4.26: State-wise Distribution of Bank Branches of Local Area Banks.

States / UT 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total

Increase CAGR

Andhra

Pradesh 9 11 13 14 16 16 17 17 17 17 17 8 6.57%

Gujarat 3 6 6 8 0 0 0 0 0 0 0 -3 -100%

Karnataka 0 1 1 2 5 8 9 9 9 10 10 10 29.15%

Maharashtra 2 2 2 4 4 4 4 4 4 10.41%

Pondicherry 1 0 0 0 0 0 0 0 0 0 0 -100%

Punjab 1 1 1 1 2 2 3 16 16 17 22 21 36.22%

Rajasthan 1 0 0 0 0 0 0 0 0 0 0 -1 -100%

All India 14 20 21 27 25 28 33 46 46 48 53 39 14.24%


2) Population-wise Distribution of branches across Bank Groups

Table 4.27: Population-wise Distribution of Branches of SBI Group

Population-

wise 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Total

Increase CAGR

Rural 5514 5507 5485 5474 5217 5106 5114 5346 5562 5935 6206 692 1.19%

Semi Urban 3995 4016 4034 4057 4006 4121 4195 4575 4846 5307 5500 1505 3.25%

Urban 2346 2367 2376 2406 2502 2663 2846 3170 3044 3815 3899 1553 5.21%

Metro 1795 1808 1827 1845 2196 2306 2456 2723 2646 3129 3218 1423 6.01%

All India 13650 13698 13722 13782 13921 14196 14611 15814 16098 18186 18823 5173 3.27%


Table 4.27 exhibits the population-wise distribution of branches of SBI and

Associate Banks across the country. From the Table, it is observed that CAGR of

bank offices in metro is so attractive with 6.01%, followed by Urban (5.21%) and

Semi-Urban (3.25%) during the study period. However, the CAGR of bank offices in

rural areas is not encouraging and it is just 1.19%. The all-India CAGR is just 3.27%.

From the Table, one can also understand that SBI & its associates have added 5173

branches across the country, of which urban areas have attracted 1553 branches and

semi-urban has 1505 branches. The establishment of just 692 branches in rural areas

by SBI and its associate banks is not an encouraging aspect.

107

Table 4.28: Population-wise Distribution of Branches of Nationalized Banks


Table 4.28 reveals the population-wise distribution of branches of nationalized

banks across the different areas. The CAGR in metro (5.31%), urban (4.31%) and

semi-urban (4.30%) are above the all-India CAGR of 3.04%. However, the CAGR in

rural area is just 0.25%. The Table also reveals that the nationalized banks have added

4156 branches in metro area and just 355 branches in rural area.

Table 4.29: Population-wise Distribution of Branches of Private Sector Banks

Population-

wise 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Total

Increase CAGR

Rural 1138 1141 1113 1103 1031 982 988 1033 1104 1175 1312 174 1.43%

Semi Urban 1746 1789 1710 1788 1725 1833 2099 2396 2643 3129 3841 2095 8.20%

Urban 1316 1411 1456 1589 1893 2033 2238 2548 2706 3175 3460 2144 10.15%

Metro 1181 1256 1310 1464 1799 1965 2076 2317 2440 2973 3388 2207 11.11%

All India 5381 5597 5589 5944 6448 6813 7401 8294 8893 10452 12001 6620 8.35%


From Table 4.29 one could understand that the all-India CAGR of private

banks’ offices is 8.35%, which is greater than the other bank groups such as SBI &

associates (3.27%), nationalized banks (3.04%), foreign banks (4.52%) and Regional

Rural Banks (0.88%). The CAGR of private bank offices in metro is the highest with

11.11%, followed by urban (10.15%) and semi-urban (8.20%). However, the CAGR

Population-

wise 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Total

Increase CAGR

Rural 13837 13742 13661 13580 12992 12869 13014 13210 13348 13683 14192 355 0.25%

Semi Urban 6977 6990 7160 7253 7072 7272 7707 8204 8686 9585 10628 3651 4.30%

Urban 7047 7055 7211 7349 7352 7634 8231 8996 8941 10300 10742 3695 4.31%

Metro 6132 6111 6169 6278 7572 7846 8275 8794 8459 9899 10288 4156 5.31%

All India 33993 33898 34201 34460 34988 35621 37227 39204 39434 43467 45850 11857 3.04%

108

in rural area is just 1.43% which reveals the poor private bank expansion in rural

areas. The table also reveals that the private banks have added a total of 6620

branches during the study period, of which metro branches are 2207 and urban

branches are 2144. However, the addition of just 174 branches in rural area by the

private banks is not an encouraging phenomenon.

Table 4.30: Population-wise Distribution of Branches of Foreign Banks

Population-

wise 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Total

Increase CAGR

Rural 0 0 0 0 0 0 0 0 4 5 7 3 32.29%

Semi Urban 2 2 0 0 0 1 2 2 4 6 8 6 14.87%

Urban 16 23 24 29 28 38 44 50 52 61 62 46 14.51%

Metro 187 223 188 195 217 224 226 227 233 238 242 55 2.61%

All India 205 248 212 224 245 263 272 279 293 310 319 114 4.52%


According to Table 4.30, the all-India CAGR of foreign bank offices is 4.52%.

The CAGR of foreign bank offices in rural area is the highest with 32.29% followed

by semi-urban area with 14.87%. However, in absolute number of branches opened,

the metro area is dominating with the addition of 114 branches of foreign banks

during the study period, followed by urban area with 46 branches. The foreign banks

have established just 3 branches in rural area and 6 branches in semi-urban area.

Table 4.31: Population-wise Distribution of Branches of Regional Rural Banks


Population-wise

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total

Increase CAGR

Rural 12096 12072 12019 11936 11547 11475 11453 11505 11628 11719 11871 -225 -0.19%

Semi

Urban 2118 2167 2223 2265 2512 2572 2603 2700 2790 2973 3046 928 3.70%

Urban 459 473 491 508 632 654 677 751 696 923 979 520 7.87%

Metro 21 21 22 24 55 63 69 73 99 125 138 117 20.72%

All

India 14694 14733 14755 14733 14746 14764 14802 15029 15213 15740 16034 1340 0.88%

109

Table 4.31 depicts the population-wise distribution of branches of regional

rural banks. From the Table one could understand that the all-India CAGR of

distribution of RRBs was 0.88% during the study period. The CAGR of RRB offices

in metro is the highest (20.72%) and the lowest is in rural (-0.19%). In absolute terms,

there is an addition of 928 semi-urban branches of RRBs, 520 urban branches and 117

metro branches. The rural branches of RRBs have showed a negative growth with the

closure of 225 branches.

Table 4.32: Population-wise Distribution of branches of Local Area Banks

Population-

wise 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Total

Increase CAGR

Rural - 3 5 6 3 5 6 11 0 12 14 11 18.67%

Semi Urban 5 8 8 11 10 12 14 20 22 25 20 17.46%

Urban 9 8 8 10 12 12 13 15 0 14 14 5 4.52%

Metro 0 0 0 0 0 0 0 0 0 0 0 0 0.00%

All India 14 19 21 27 25 29 33 46 0 48 53 39 14.24%


The all-India CAGR of distribution of branches LABs is 14.24% (Table 4.32).

The Table also reveals that the distribution of LABs across rural and semi-urban areas

is encouraging with the CAGR of 18.67% and 17.46% respectively. However, the

CAGR of urban LABs is just 4.52%. In absolute terms, there is an addition of 39

branches of LABs across India, of which 20 were in semi-urban areas, 11 were in

rural areas and 5 were in urban areas.

110

3) Region-wise Distribution of Branches across Bank Groups

Table 4.33: Region-Wise Distribution of Branches of SBI Group


Table 4.33 exhibits the region-wise distribution of SBI & associate banks’

offices. The CAGR of northern (3.45%), southern (3.44%), central (3.40%), and

western (3.36%) regions are above the all-India CAGR of 3.27%. However, the

eastern region (2.74%) and north-eastern region (2.06%) are below the all-India

CAGR. Of the 5173 branches opened across the country, southern region has attracted

the highest with 1563 branches followed by central region (1016) and northern

(1006). The north-eastern region has got only 103 branches of SBI & associate banks

during the study period.

Region 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total Increase CAGR

Central 2560 2564 2573 2579 2601 2638 2707 3029 3238 3493 3576 1016 3.40%

Eastern 2259 2260 2264 2262 2272 2316 2357 2468 2589 2883 2960 701 2.74%

Northern 2488 2498 2515 2538 2579 2652 2750 2950 3066 3304 3494 1006 3.45%

North-East 455 455 455 460 465 477 485 496 522 548 558 103 2.06%

Southern 3884 3896 3916 3951 4003 4073 4185 4528 4781 5231 5447 1563 3.44%

Western 2004 2008 2012 1992 2001 2040 2127 2343 2536 2727 2788 784 3.36%

All India 13650 13681 13735 13782 13921 14196 14611 15814 16732 18186 18823 5173 3.27%

111

Table 4.34: Region-wise Distribution of branches of Nationalized Banks


The region-wise distribution of nationalized banks’ offices is depicted in Table

4.34. From the table, it is understood that the northern region tops with the CAGR of

4.08%, followed by southern region (3.27%), central (3.21%), eastern (2.55%),

western (2.27%) and north-east (2.09%). The all-India CAGR of nationalized bank

offices is 3.06%. In absolute terms, the southern region has attracted the highest

number of branches (3287) followed by northern (2716) and central (2383). The

nationalized banks have opened just 185 branches in the north-east region between

2001 and 2011 which is disheartening.

Table 4.35: Region-wise Distribution of branches of Private Banks


Region 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total

Increase CAGR

Central 6408 6411 6395 6528 6614 6714 6996 7385 7687 8259 8791 2383 3.21%

Eastern 5962 5980 5980 6026 6093 6180 6363 6601 6867 7276 7668 1706 2.55%

Northern 5524 5562 5598 5679 5792 5921 6404 6628 6973 7722 8240 2716 4.08%

North-

East 805 800 792 795 805 814 837 871 900 950 990 185 2.09%

Southern 8657 8646 8631 8911 9108 9258 9689 10332 10782 11383 11944 3287 3.27%

Western 6701 6680 6639 6614 6697 6737 7082 7319 7552 8006 8390 1689 2.27%

All India 34057 34079 34035 34553 35109 35624 37371 39136 40761 43596 46023 11966 3.06%

Region 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total

Increase CAGR

Central 232 238 270 210 269 326 401 499 663 852 1013 781 15.88%

Eastern 108 117 134 159 218 263 354 491 530 651 814 706 22.38%

Northern 959 1024 1105 1201 1257 1707 1675 1927 2092 2314 2663 1704 10.75%

North-East 8 8 11 13 13 19 40 61 83 109 150 142 34.06%

Southern 3186 3249 3320 3255 3373 3514 3767 4051 4312 4783 5220 2034 5.06%

Western 923 956 1007 1101 1195 1282 1252 1425 1606 1870 2235 1312 9.25%

All India 5416 5592 5847 5939 6325 7111 7489 8454 9286 10579 12095 6679 8.37%

112

The region-wise distribution of private banks’ offices is shown in Table 4.35.

Though, the southern region has attracted 2034 private bank offices, the CAGR

during 2001-2011 was just 5.06%. The north-eastern region has showed tremendous

growth during the study period with 34.06% CAGR, followed by eastern region

(22.38%) and central (15.88%). In absolute terms, the north-eastern region has

attracted just 142 private bank offices. The central and eastern regions have attracted

781 and 706 private bank offices respectively.

Table 4.36: Region-wise Distribution of branches of Foreign Banks


Table 4.36 shows that the all-India CAGR of distribution of foreign banks’

offices was just 4.67%. It also reveals that the central region has got the highest

CAGR of 28.21%, which is incomparable with other regions. The north-eastern

(7.18%), northern (5.29%) and southern (5.29%) regions are above the all-India

CAGR, whereas the western and eastern regions are below the all-India CAGR.

During the study period, in absolute numbers, the western region has attracted 34

foreign bank offices, northern and southern regions have attracted 29 foreign bank

offices each. The north-eastern region has seen an addition of only one branch during

2001-2011.

Region 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total

Increase CAGR

Central 2 2 6 8 11 16 18 20 20 23 24 22 28.21%

Eastern 36 37 33 33 37 38 37 38 37 39 39 3 0.80%

Northern 43 43 49 54 57 61 64 67 69 70 72 29 5.29%

North-East 1 1 1 1 1 1 1 1 1 2 2 1 7.18%

Southern 43 45 46 50 53 58 61 61 66 69 72 29 5.29%

Western 79 79 72 79 87 90 94 97 102 109 113 34 3.64%

All India 204 207 207 225 246 264 275 284 295 312 322 118 4.67%

113

Table 4.37: Region-wise Distribution of branches of Regional Rural Banks


Of the six regions, only southern region has the CAGR of distribution RRBs

(1.81%) above the all-India average of 0.77% (Table 4.37). The northern region has

witnessed the lowest CAGR during the study period with just 0.28%. In absolute

terms, the RRBs have established 556 branches in southern region, followed by

central region (341) and eastern region (130). The north-eastern region has attracted

just 32 branches of RRBs during the study period, i.e. 2001 – 2011.

Table 4.38: Region-wise Distribution of branches of Local Area Banks


Region 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total

Increase CAGR

Central 4607 4608 4620 4593 4585 4580 4575 4630 4722 4846 4948 341 0.72%

Eastern 3636 3634 3632 3632 3637 3642 3634 3657 3703 3741 3766 130 0.35%

Northern 1864 1867 1863 1846 1939 1649 1739 1920 1974 1862 1916 52 0.28%

North-East 664 656 658 659 660 658 665 679 686 691 696 32 0.47%

Southern 2825 2851 2911 2914 2922 2938 2954 3032 3179 3307 3381 556 1.81%

Western 1009 1010 1032 999 1004 998 1000 1014 1023 1035 1057 48 0.47%

All India 14605 14626 14716 14643 14747 14465 14567 14932 15287 15482 15764 1159 0.77%

Region 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total

Increase CAGR

Central 0 0 0 0 0 0 0 0 0 0 0 0 0.00%

Eastern 0 0 0 0 0 0 0 0 0 0 0 0 0.00%

Northern 2 1 1 1 2 2 3 16 16 17 22 20 27.10%

North-East 0 0 0 0 0 0 0 0 0 0 0 0 0.00%

Southern 9 13 14 16 21 24 26 26 26 27 27 18 11.61%

Western 3 6 6 10 2 2 4 4 4 4 4 1 2.92%

Total 14 20 21 27 25 28 33 46 46 48 53 39 14.24%

114

Table 4.38 reveals that the all-India CAGR of distribution of LABs during

2001-11 is 14.24%. The northern region has got the highest CAGR of 27.10%

followed by Southern region with 11.61%. In absolute terms, there are 38 additional

branches of LABs opened during the study period across the country, of which

northern region has got 20 LAB branches and southern region received 18 LAB

branches.

III. Distribution of Bank Branches across Population Groups

In this part of the study, the researcher has analyzed the distribution of bank

branches population-wise. The population-wise classification adopted by the Reserve

Bank of India is used in this regard. Thus, the different population-wise classifications

are 1) Rural area, 2) Semi-Urban area, 3) Urban area, and 4) Metro area. In the

following paragraphs, the 1) State-wise, 2) Region-wise and 3) Bank Group-wise

distribution of bank offices for different bank groups is analyzed independently.

1) State-wise Distribution of branches across Population Groups

Table 4.39 depicts the state-wise distribution of banks’ offices in rural area.

The all-India CAGR of rural bank offices is 0.31%, which is not an encouraging

phenomenon. However, the Union Territories such as Chandigarh, Dadra Nagar

Haveli and Daman & Diu have shown rural bank offices CAGR of 10.31%, 7.18% &

7.18% respectively during the study period. The states and union territories such as

Tamilnadu, Rajasthan, Mizoram, Meghalaya, Manipur, Maharashtra, Madhya

Pradesh, Lakshadweep, Kerala, Jammu & Kashmir, Chhattisgarh, Bihar, Assam and

Arunachal Pradesh have shown a negative CAGR during the study period and thus it

is concluded that there are closure of rural branches in these states and union

territories during the study period. In absolute terms, there are 1017 rural branches

that are added in the country of which the state of Uttar Pradesh has established 217

branches followed by Andhra Pradesh (167) and West Bengal (161).

115

Table 4.39: State-wise Distribution of Rural Branches

State/UT 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total

Increase CAGR

Andaman & Nicobar

17 17 17 17 17 17 17 17 17 19 19 2 1.12%

Andhra Pradesh

2432 2435 2421 2402 2270 2253 2265 2316 2396 2479 2599 167 0.67%

Arunachal Pradesh

56 56 55 53 51 50 50 50 50 51 51 -5 -0.93%

Assam 814 801 793 788 789 773 773 777 788 799 807 -7 -0.09% Bihar 2500 2500 2487 2481 2364 2337 2331 2337 2354 2401 2444 -56 -0.23% Chandigarh 9 9 9 9 20 21 21 23 24 24 24 15 10.31% Chhattisgarh 716 706 698 690 653 637 634 643 659 677 692 -24 -0.34% Dadra & Nagar Haveli

5 5 5 5 4 4 4 4 5 7 10 5 7.18%

Daman & Diu

1 1 1 1 — — - - 0 0 2 1 7.18%

Delhi 58 59 59 60 49 48 50 53 56 56 60 2 0.34% Goa 155 155 149 149 141 145 151 157 161 168 180 25 1.51% Gujarat 1549 1547 1513 1512 1423 1401 1415 1449 1484 1529 1594 45 0.29% Haryana 700 703 701 699 644 630 650 671 692 742 817 117 1.56% Himachal Pradesh

657 657 659 662 684 670 684 703 730 770 801 144 2.00%

Jammu & Kashmir

579 583 585 588 526 514 524 536 544 551 569 -10 -0.17%

Jharkhand 984 982 980 975 961 955 956 960 976 999 1031 47 0.47% Karnataka 2198 2194 2183 2167 2103 2090 2103 2130 2115 2161 2212 14 0.06% Kerala 346 348 345 345 347 318 320 329 330 327 340 -6 -0.17% Lakshadweep 9 9 9 9 7 7 7 7 8 8 8 -1 -1.17% Madhya Pradesh

1938 1921 1892 1875 1799 1740 1720 1734 1757 1763 1783 -155 -0.83%

Maharashtra 2305 2302 2268 2224 2093 2067 2082 2106 2139 2185 2241 -64 -0.28% Manipur 42 41 41 40 36 36 34 33 35 35 36 -6 -1.53% Meghalaya 130 130 130 131 123 125 122 123 125 126 127 -3 -0.23% Mizoram 61 61 61 61 58 57 58 54 55 55 55 -6 -1.03% Nagaland 37 37 37 37 34 35 35 35 36 38 37 0 0.00% Orissa 1615 1614 1602 1598 1602 1579 1583 1623 1653 1706 1741 126 0.75% Pondicherry 23 20 21 21 19 19 19 22 29 35 37 14 4.87% Punjab 1114 1118 1126 1125 1083 1052 1062 1093 1130 1192 1316 202 1.68% Rajasthan 1885 1882 1854 1841 1727 1721 1721 1739 1755 1782 1835 -50 -0.27% Sikkim 36 36 36 36 37 37 40 46 46 50 54 18 4.14% Tamil Nadu 1806 1779 1746 1722 1612 1591 1612 1660 1709 1741 1800 -6 -0.03% Tripura 120 120 119 119 102 102 103 106 110 120 123 3 0.25% Uttar Pradesh 4883 4874 4882 4860 4620 4615 4634 4725 4816 4953 5100 217 0.44% Uttarakhand 526 526 526 526 532 528 527 551 573 594 617 91 1.61% West Bengal 2279 2275 2273 2271 2260 2262 2268 2293 2319 2386 2440 161 0.68% All India 32585 32503 32283 32099 30790 30436 30575 31105 31676 32529 33602 1017 0.31%


116

Table 4.40 shows that the all-India CAGR of semi-urban banks’ offices is

4.50%. 24 States and Union territories have CAGR are above the all-India CAGR

and 11 states and union territories have CAGR less than the all-India CAGR.

Chandigarh has the highest CAGR of 20.57% during the study period and West

Bengal has the lowest CAGR of 2.40%. In absolute terms, there are 8205 semi-urban

branches added in the country as a whole. Tamilnadu has witnessed the addition of

highest number (1007) of semi-urban branches during the study period. Uttar Pradesh

follows Tamilnadu in this regard with 817 semi-urban branches. Chandigarh has a

unique experience of closure of 9 semi-urban branches, which is not seen in any other

state or union territory.

117

Table 4.40:State-wise Distribution of Semi-Urban Branches


Andaman & Nicobar 14 14 14 15 16 17 20 20 20 21 23 9 5.09%

Andhra Pradesh 1216 1233 1260 1273 1290 1298 1360 1464 1543 1688 1831 615 4.18%

Arunachal Pradesh 13 13 14 14 17 20 23 24 27 30 37 24 11.03%

Assam 265 265 268 274 268 286 301 317 330 369 401 136 4.23%

Bihar 670 670 680 683 732 757 767 795 854 951 1026 356 4.35%

Chandigarh 10 10 11 12 1 1 1 1 1 1 1 -9 -20.57%

Chhattisgarh 162 163 163 165 183 191 204 232 254 279 324 162 7.18%


Daman & Diu 14 15 15 15 16 16 18 18 18 20 22 8 4.62%

Delhi 18 21 22 22 33 26 27 31 36 37 38 20 7.76%

Goa 182 184 191 197 212 222 229 252 266 283 299 117 5.09%

Gujarat 828 833 848 855 819 819 872 936 990 1089 1229 401 4.03%

Haryana 398 405 416 429 323 355 378 415 479 557 645 247 4.95% Himachal Pradesh 131 134 136 135 78 104 129 146 161 187 203 72 4.48%

Jammu & Kashmir 84 84 86 87 147 168 167 185 197 208 219 135 10.06%

Jharkhand 264 271 271 279 272 278 297 331 378 425 479 215 6.14% Karnataka 1043 1050 1067 1090 1012 1022 1064 1137 1202 1287 1375 332 2.80%

Kerala 2379 2405 2436 2485 2360 2437 2535 2631 2733 2904 3094 715 2.66%

Lakshadweep 0 0 0 0 2 3 3 3 3 4 4 4 12.25%

Madhya Pradesh 787 795 802 807 786 820 851 894 977 1072 1166 379 4.01%

Maharashtra 1100 1103 1111 1122 1190 1210 1243 1341 1443 1563 1680 580 4.33%

Manipur 14 14 14 14 19 19 20 20 20 20 20 6 3.63%

Meghalaya 17 17 18 18 24 23 23 24 30 34 36 19 7.79%

Mizoram 9 9 9 9 12 12 12 14 14 14 15 6 5.24%

Nagaland 34 34 34 35 39 40 45 48 51 53 59 25 5.67%

Orissa 324 326 333 339 327 353 406 463 512 574 674 350 7.60%

Puducherry 19 19 19 19 21 21 25 29 33 37 39 20 7.46%

Punjab 688 699 715 737 690 743 810 900 971 1080 1237 549 6.04%

Rajasthan 747 749 751 768 817 832 872 942 998 1074 1224 477 5.06%

Sikkim 11 12 12 13 18 21 24 25 25 27 29 18 10.18%

Tamil Nadu 1227 1228 1234 1253 1372 1427 1524 1683 1861 2056 2234 1007 6.18%

Tripura 31 31 31 31 48 48 49 52 59 61 64 33 7.52%

Uttar Pradesh 1361 1369 1365 1382 1447 1471 1523 1647 1790 1974 2178 817 4.81% Uttarakhand 199 200 206 212 212 222 239 275 291 342 385 186 6.82%

West Bengal 578 581 576 578 514 521 543 585 627 680 733 155 2.40%

All India 14843 14962 15135 15374 15325 15811 16620 17897 19213 21022 23048 8205 4.50%


118

Table 4.41: State-wise Distribution of Urban Branches

State/UT 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total

Increase CAGR

Andhra

Pradesh 1068 1087 1124 1156 1201 1265 1354 1568 1722 1902 2001 933 6.48%

Assam 189 190 194 201 216 226 252 287 307 326 350 161 6.36%

Bihar 446 449 454 459 338 352 373 395 452 521 559 113 2.28%

Chandigarh 185 188 197 207 215 232 245 273 287 302 312 127 5.37%

Chhattisgarh 188 189 197 203 230 247 273 308 349 400 426 238 8.52%

Gujarat 496 491 502 514 537 541 578 620 647 703 747 251 4.18%

Haryana 447 461 491 511 645 703 772 868 923 1033 1101 654 9.43%

Himachal

Pradesh 0 0 0 0 47 55 56 61 72 77 78 78 8.81%

Jammu &

Kashmir 175 182 183 190 209 218 232 257 268 281 283 108 4.92%

Jharkhand 223 229 237 247 287 313 334 377 415 461 489 266 8.17%

Karnataka 848 855 870 903 1093 1134 1195 1280 1321 1415 1457 609 5.56%

Kerala 665 674 694 720 919 953 1004 1093 1148 1233 1277 612 6.74%

Madhya

Pradesh 440 446 452 463 577 604 636 716 792 872 910 470 7.54%

Maharashtra 947 961 972 997 890 906 971 1059 1191 1302 1378 431 3.82%

Meghalaya 34 34 34 35 38 43 46 47 51 54 58 24 5.49%

Manipur 24 24 24 23 23 23 23 23 26 26 28 4 1.55%

Mizoram 10 10 10 10 11 12 16 24 26 30 31 21 11.98%

Orissa 329 334 340 352 392 444 490 547 587 629 653 324 7.10%

Puducherry 44 45 46 45 50 53 58 61 69 76 83 39 6.55%

Punjab 578 586 594 609 576 615 661 716 741 809 838 260 3.78%

Rajasthan 499 504 518 533 636 659 743 817 862 943 983 484 7.02%

Tamil Nadu 1042 1056 1077 1094 1140 1175 1266 1358 1445 1546 1599 557 4.38%

Tripura 33 33 33 35 36 39 43 50 51 59 61 28 6.34%

Uttar

Pradesh 1515 1526 1530 1563 1248 1296 1422 1594 1740 1963 2074 559 3.19%

Uttarakhand 130 133 140 150 163 180 194 230 248 277 289 159 8.32%

West

Bengal 638 641 653 671 702 746 812 901 953 1048 1091 453 5.51%


119

Table 4.41 contains the distribution of urban bank offices in 26 of 35 states

and union territories. This is because that the remaining 9 states and union territories

don’t have urban branches. The table also reveals that the all-India CAGR of urban

bank offices is 5.52% during the study period. 15 states and union territories are

above the all-India CAGR and 11 are below the all-India CAGR. Surprisingly,

Mizoram has the highest CAGR during the study period with 11.98%. Manipur has

the lowest CAGR with 1.55%. In absolute terms, the country has witnessed the

establishment of 7963 new urban branches. Andhra Pradesh has taken the lead with

the establishment of 933 new urban branches during the study period. The other states

such as Haryana, Kerala and Karnataka have also performed well with the addition of

654, 612 and 609 urban bank offices respectively. The states such as Manipur,

Meghalaya and Tripura have added 4, 24 and 28 urban branches respectively during

2001 – 2011.

Table 4.42: State-wise Distribution of Branches in Metro Centers


Andhra Pradesh 583 591 595 617 803 838 895 1003 1085 1171 1252 669 7.94%

Bihar 0 0 0 0 214 229 241 265 282 307 319 319 6.88%

Delhi 1444 1478 1503 1566 1654 1761 1896 2065 2229 2415 2587 1143 6.00%

Gujarat 925 909 908 908 1066 1126 1186 1284 1371 1475 1541 616 5.24%

Haryana 0 0 0 0 89 93 99 110 120 138 153 153 9.45%

Madhya Pradesh 376 382 390 402 425 448 472 534 570 612 641 265 5.48%

Maharashtra 2206 2227 2243 2290 2587 2684 2794 2959 3188 3406 3639 1433 5.13%

Punjab 217 221 226 234 423 443 469 498 529 566 593 376 10.58%

Rajasthan 257 262 279 295 310 328 366 405 435 464 490 233 6.67%

Tamil Nadu 846 849 863 891 924 948 1001 1071 1144 1222 1276 430 4.20%

Uttar Pradesh 579 584 589 620 1205 1275 1368 1480 1575 1695 1767 1188 11.80%

West Bengal 1073 1077 1082 1098 1204 1218 1243 1275 1312 1385 1443 370 3.01%

All India 9316 9402 9516 9806 11839 12404 13102 14134 15212 16364 17274 7958 6.37%


120

From Table 4.42 one could infer that there are 11 states and 1 union territory

which have metro branches. The all-India CAGR of metro branches is 6.37% during

2001-2011. The metro branches growth is tremendous in Uttar Pradesh with a CAGR

of 11.80% followed by Punjab with a CAGR of 10.58%. West Bengal and Tamil

Nadu have showed the least CAGR during the study period with 3.01% and 4.20%

respectively.

Table 4.43 shows the state-wise/union territory wise distribution of total bank

branches across the country. From the table, it is understood that the all-India CAGR

of total bank offices is 3.20%. The interesting aspect is that there are only 14 states

and union territories which have their CAGR above the all-India CAGR and 21 states

and union territories have CAGR less than all-India CAGR. The table also reveal that

Dadra Nagar Haveli ranks first with the top CAGR of 12.27% during the study period,

i.e. 2001 – 2011. Manipur’s CAGR of total bank offices is the lowest (0.49%) among

all the states and union territories. In absolute terms 25143 branches have been added

in the country during the study period, of which 2781 branches were established in

Uttar Pradesh and 2384 branches in Andhra Pradesh. Lakshadweep and Manipur have

added just 3 and 4 branches respectively during 2001 – 2011.

121

Table 4.43: State wise/Union Territory Distribution of Branches of All Banks


Andaman & Nicobar 31 31 31 32 33 34 37 37 37 40 42 11 3.08%

Andhra Pradesh 5299 5346 5400 5448 5564 5654 5874 6351 6746 7240 7683 2384 3.78%

Arunachal Pradesh 69 69 69 67 68 70 73 74 77 81 88 19 2.46%

Assam 1268 1256 1255 1263 1273 1285 1326 1381 1425 1494 1558 290 2.08%

Bihar 3616 3619 3621 3623 3648 3675 3712 3792 3942 4180 4348 732 1.86%

Chandigarh 204 207 217 228 236 254 267 297 312 327 337 133 5.15%

Chhattisgarh 1066 1058 1058 1058 1066 1075 1111 1183 1262 1356 1442 376 3.07%


Daman & Diu 15 16 16 16 16 16 18 18 18 20 24 9 4.81%

Delhi 1520 1558 1584 1648 1736 1835 1973 2149 2321 2508 2685 1165 5.85%

Goa 337 339 340 346 353 367 380 409 427 451 479 142 3.58%

Gujarat 3798 3780 3771 3789 3845 3887 4051 4289 4492 4796 5111 1313 3.01%

Haryana 1545 1569 1608 1639 1701 1781 1899 2064 2214 2470 2716 1171 5.80%

Himachal Pradesh 788 791 795 797 809 829 869 910 963 1034 1082 294 3.22%

Jammu & Kashmir 838 849 854 865 882 900 923 978 1009 1040 1071 233 2.48%

Jharkhand 1471 1482 1488 1501 1520 1546 1587 1668 1769 1885 1999 528 3.11%

Karnataka 4899 4921 4958 5045 5143 5259 5434 5732 6010 6371 6617 1718 3.05%

Kerala 3390 3427 3475 3550 3626 3708 3859 4053 4211 4464 4711 1321 3.35%

Lakshadweep 9 9 9 9 9 10 10 10 11 12 12 3 2.92%

Madhya Pradesh 3541 3544 3536 3547 3587 3612 3679 3878 4096 4319 4500 959 2.43%

Maharashtra 6558 6593 6594 6633 6760 6867 7090 7465 7961 8456 8938 2380 3.14%

Manipur 80 79 79 77 78 78 77 76 81 81 84 4 0.49%

Meghalaya 181 181 182 184 185 191 191 194 206 214 221 40 2.02%

Mizoram 80 80 80 80 81 81 86 92 95 99 101 21 2.36%

Nagaland 71 71 71 72 73 75 80 83 87 91 96 25 3.06%

Orissa 2268 2274 2275 2289 2321 2376 2479 2633 2752 2909 3068 800 3.07% Puducherry 86 84 86 85 90 93 102 112 131 148 159 73 6.34%

Punjab 2597 2624 2661 2705 2772 2853 3002 3207 3371 3647 3984 1387 4.37%

Rajasthan 3388 3397 3402 3437 3490 3540 3702 3903 4050 4263 4532 1144 2.95%

Sikkim 47 48 48 49 55 58 64 71 71 77 83 36 5.85%

Tamil Nadu 4921 4912 4920 4960 5048 5141 5403 5772 6159 6565 6909 1988 3.45%

Tripura 184 184 183 185 186 189 195 208 220 240 248 64 3.03%

Uttar Pradesh 8338 8353 8366 8425 8520 8657 8947 9446 9921 10585 11119 2781 2.92%

Uttarakhand 855 859 872 888 907 930 960 1056 1112 1213 1291 436 4.21%

West Bengal 4568 4574 4584 4618 4680 4747 4866 5054 5211 5499 5707 1139 2.25%

All India 67937 68195 68500 69170 70373 71685 74346 78666 82794 88203 93080 25143 3.20% Source: Statistical Tables Relating to Banks in India, Reserve Bank of India

122

2) Region-wise Distribution of Branches across Population Groups

Table 4.44: Region-wise Distribution of Rural Branches

Region 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total

Branches CAGR

North 5002 5011 4993 4984 4733 4656 4712 4818 4931 5117 5422 420 0.81%

North East 1260 1246 1236 1229 1193 1178 1175 1178 1199 1224 1236 -24 -0.19%

East 7431 7424 7395 7378 7241 7187 7195 7276 7365 7561 7729 298 0.39%

Central 8063 8027 7998 7951 7604 7520 7515 7653 7805 7987 8192 129 0.16%

Western 4015 4010 3936 3891 3661 3617 3652 3716 3789 3889 4027 12 0.03%

Southern 6814 6785 6725 6666 6358 6278 6326 6464 6587 6751 6996 182 0.26%

All India 32585 32503 32283 32099 30790 30436 30575 31105 31676 32529 33602 1017 0.31%


Table 4.44 exhibits the region-wise distribution of bank branches in rural

areas. The northern region has the highest CAGR of 0.81%, followed by Eastern

region (0.39%). The western region’s performance with regard to rural branches is not

satisfactory since the CAGR is just 0.03% during 2001 – 2011. In absolute numbers,

1017 rural branches were added in the country of which northern region alone has 420

branches and eastern region has attracted 298 branches. The north-eastern region has

witnessed closure of 24 branches during the study period. The western region has also

added just 12 branches during 2001 – 2011.

Table 4.45: Region-wise Distribution of Semi-Urban Branches

Region 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total

Branches CAGR

North 2076 2102 2137 2190 2089 2229 2384 2620 2843 3144 3567 1491 5.56%

North

East 383 383 388 395 427 448 473 499 531 581 632 249 5.14%

East 1861 1874 1886 1907 1879 1947 2057 2219 2416 2678 2964 1103 4.76%

Central 2509 2527 2536 2566 2628 2704 2817 3048 3312 3667 4053 1544 4.91%

Western 2130 2141 2172 2196 2245 2275 2378 2564 2736 2976 3255 1125 4.33%

Southern 5884 5935 6016 6120 6057 6208 6511 6947 7375 7976 8577 2693 3.84%

All India 14843 14962 15135 15374 15325 15811 16620 17897 19213 21022 23048 8205 4.50%


123

The all-India CAGR of semi-urban bank branches is just 4.50% during the

study period (Table 4.45). Of six regions, four regions (north, north-east, east and

central) have CAGR above the all-India CAGR and two regions (western and

southern) have CAGR below the all-India CAGR. In absolute terms, 8205 semi-urban

branches have been added during the study period. Southern region has added the

highest number of branches (2693), followed by central (1544) and north (1491). The

North-east region has attracted just 249 semi-urban branches during the study period,

which is well below the other regions.

Table 4.46: Region-wise Distribution of Urban branches

Region 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total

Branches CAGR

North 1884 1921 1983 2050 2328 2482 2709 2992 3153 3445 3595 1711 6.67%

North East 290 291 295 304 324 343 380 431 461 495 528 238 6.18%

East 1636 1653 1684 1729 1719 1855 2009 2220 2407 2659 2792 1156 5.49%

Central 2273 2294 2319 2379 2218 2327 2525 2848 3129 3512 3699 1426 4.99%

Western 1443 1452 1474 1511 1427 1447 1549 1679 1838 2005 2125 682 3.95%

Southern 3667 3717 3811 3918 4403 4580 4877 5360 5705 6172 6417 2750 5.76%

All India 11193 11328 11566 11891 12419 13034 14049 15530 16693 18288 19156 7963 5.52%


Table 4.46 depicts that the north (6.67%), north-east (6.18%), east (5.49%)

and southern (5.76%) are above the all-India CAGR of urban bank branches. In

absolute terms, 7963 urban branches have been added in the country of which

southern region alone has 2750 branches and north region has 1711 branches. the

north-eastern region has got only 238 branches added during 2001 – 2011.

124

Table 4.47: Region-wise Distribution of Metro Branches

Region 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total

Branches CAGR

North 1918 1961 2008 2095 2476 2625 2830 3078 3313 3583 3823 1905 7.14%

North East 0 0 0 0 0 0 0 0 0 0 0 0 0.00%

East 1073 1077 1082 1098 1418 1447 1484 1540 1594 1692 1762 689 5.08%

Central 955 966 979 1022 1630 1723 1840 2014 2145 2307 2408 1453 9.69%

Western 3131 3136 3151 3198 3653 3810 3980 4243 4559 4881 5180 2049 5.16%

Southern 2239 2262 2296 2393 2662 2799 2968 3259 3601 3901 4101 1862 6.24%

All India 9316 9402 9516 9806 11839 12404 13102 14134 15212 16364 17274 7958 6.37%


Table 4.47 shows that the all-India CAGR of metro bank branches is 6.37% during

the study period, and Central region ranks first with the CAGR of 9.69%, followed by north

(7.14%) and southern region (6.24%). In absolute numbers, the western region has witnessed

the establishment of 2049 of 7958 branches, followed by north region with 1905 branches and

southern region with 1862 branches. The eastern region has added just 689 metro branches

during 2001 – 2011 and north-east region has no presence of metro branches.

3) Bank Group-wise Distribution of Branches across Population Groups

Table 4.48: Bank Group-wise Distribution of Rural Branches

Bank Group 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total

Increase CAGR

SBI & Associates 5514 5507 5485 5474 5217 5106 5114 5346 5562 5935 6206 692 1.19%

Nationalized 13837 13742 13661 13580 12992 12869 13014 13210 13348 13683 14192 355 0.25%

Private Sector 1138 1141 1113 1103 1031 982 988 1033 1104 1175 1312 174 1.43%

Foreign 0 0 0 0 0 0 0 0 4 5 7 7 32.29%

RRBs 12096 12072 12019 11936 11547 11475 11453 11505 11628 11719 11871 -225 -0.19%

Local Area Banks 0 3 5 6 3 6 11 0 12 14 14 18.67%

Total 32585 32465 32283 32099 30790 30432 30575 31105 31676 32529 33602 1017 0.31%


125

The data showed in Table 4.48 reveals that the all-India CAGR of Bank

Group-wise distribution of rural bank branches is 0.31%. Among the various bank

groups, foreign banks have showed tremendous growth in rural area with a CAGR of

32.29%, followed by LABs with 18.67%. There is a negative CAGR for RRBs and

nationalized banks have achieved just 0.25% CAGR for the entire study period of

2001 – 2011. In absolute terms, rural areas have witnessed 1017 additional branches

during the study period, of which 692 were by SBI and its associate banks, 355 by

nationalized banks and 174 by private banks. 225 branches of RRBs were closed in

rural areas.

Table 4.49: Bank Group-wise Distribution of Semi-Urban branches

Bank Group 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total

Increase CAGR

SBI &

Associates 3995 4016 4034 4057 4006 4121 4195 4575 4846 5307 5500 1505 3.25%

Nationalized 6977 6990 7160 7253 7072 7272 7707 8204 8686 9585 10628 3651 4.30%

Private

Sector 1746 1789 1710 1788 1725 1833 2099 2396 2643 3129 3841 2095 8.20%

Foreign 2 2 0 0 0 1 2 2 4 6 8 6 14.87%

RRBs 2118 2167 2223 2265 2512 2572 2603 2700 2790 2973 3046 928 3.70%

Local Area

Banks 5 8 8 11 10

14 20

22 25 20 17.46%

Total 14843 14972 15135 15374 15325 15799 16620 17897 19213 21022 23048 8205 4.50%


LABs have the notable growth during the study period with regard to semi-

urban branches with a CAGR of 17.46%, where the all-India CAGR is 4.50%. This is

followed by foreign banks with the CAGR of 14.87% and private banks with 8.20%.

SBI and its associate banks have registered the lowest CAGR during the study period

with just 3.25%. In absolute numbers, 8205 semi-urban bank branches were added

during the study period, of which nationalized banks alone have established 3651

branches across the country, followed by 2095 private bank branches and 1505 SBI

and its associate bank offices. Foreign banks and LABs have added 6 and 20 branches

respectively.

126

Table 4.50: Bank Group-wise Distribution of Urban branches

Bank Group 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total

Increase CAGR

SBI & Associates 2346 2367 2376 2406 2502 2663 2846 3170 3044 3815 3899 1553 5.21%

Nationalized 7047 7055 7211 7349 7352 7634 8231 8996 8941 10300 10742 3695 4.31%

Private Sector 1316 1411 1456 1589 1893 2033 2238 2548 2706 3175 3460 2144 10.15%

Foreign 16 23 24 29 28 38 44 50 52 61 62 46 14.51%

RRBs 459 473 491 508 632 654 677 751 696 923 979 520 7.87%

Local Area Banks 9 8 8 10 12

13 15 0 14 14 5 4.52%

Total 11193 11337 11566 11891 12419 13022 14049 15530 16693 18288 19156 7963 5.52%


The foreign banks and private banks have shown tremendous growth in urban

bank branches during the study period with the CAGR of 14.51% and 10.15%

respectively (Table 4.50). The nationalized banks have the least CAGR of 4.31%.

During the study period, the nationalized banks have opened the highest number of

branches (3695), followed by private banks (2144) and SBI and its associates (1553).

The LABS have opened just 5 urban bank offices and foreign banks have opened 46

bank offices during the same period.

127

Table 4.51: Bank Group-wise Distribution of Metro Branches

Bank Group 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total

Increase CAGR

SBI & Associates 1795 1808 1827 1845 2196 2306 2456 2723 2646 3129 3218 1423 6.01%

Nationalized 6132 6111 6169 6278 7572 7846 8275 8794 8459 9899 10288 4156 5.31%

Private Sector 1181 1256 1310 1464 1799 1965 2076 2317 2440 2973 3388 2207 11.11%

Foreign 187 223 188 195 217 224 226 227 233 238 242 55 2.61%

RRBs 21 21 22 24 55 63 69 73 99 125 138 117 20.72%

Local Area Banks 0 0 0 0 0 0 0 0 0 0 0 0 0.00%

Total 9316 9419 9516 9806 11839 12404 13102 14134 15212 16364 17274 7958 6.37%


From Table 4.51 one could infer that the all-India CAGR of metro offices is

6.37%. The CAGR of RRBs is the highest (20.72%) among all the bank groups,

followed by private sector with 11.11%. LABs have no presence in metro area and the

foreign banks have too shown a meager CAGR of 2.61%. In absolute terms, the

nationalized banks have established 4156 branches in metro areas during the study

period and private banks have opened 2207 bank offices. The foreign banks and

RRBs have added 55 and 117 bank offices respectively during the same period.

State-wise Distribution of Bank Branches in Regions: Pre and Post Financial

Inclusion Phases

Table 4.52 compares the state-wise distribution of bank branches in different

regions in terms of CAGR during pre-financial inclusion phase (2001-05) and post-

financial inclusion phase (2006-11). From the table, it is understood that the northern

region’s CAGR during 2001-05 was just 1.67%, and it has increased to 5.36% during

2006-11. Rajasthan and Himachal Pradesh have witnessed great hype in the CAGR

between the pre and post financial inclusion phases.

128

Table 4.52: State-wise Distribution of Bank Branches in Regions - Pre & Post Financial Inclusion Phases

State/UT CAGR 2001-05 CAGR 2006-11

Chandigarh 3.71% 4.83%

Delhi 3.38% 6.55%

Haryana 2.43% 7.29%

Himachal Pradesh 0.66% 4.54%

Jammu & Kashmir 1.29% 2.94%

Punjab 1.64% 5.72%

Rajasthan 0.74% 4.20%

Northern Region Total 1.67% 5.36%

State-wise Distribution of Bank Branches in North Eastern Region


Arunachal Pradesh -0.36% 3.81%

Assam 0.10% 3.28%

Manipur -0.63% 1.76%

Meghalaya 0.55% 2.96%

Mizoram 0.31% 3.27%

Nagaland 0.70% 3.71%

Tripura 0.27% 4.93%

North Eastern Total 0.14% 3.39%

State-wise Distribution of Bank Branches in Eastern Region


Andaman & Nicobar 1.58% 2.57%

Bihar 0.22% 3.21%

Jharkhand 0.82% 4.72%

Orissa 0.58% 4.36%

Sikkim 4.01% 5.34%

West Bengal 0.61% 3.24%

Eastern Region Total 0.53% 3.65%

129

State-wise Distribution of Bank Branches in Central Region


Chhattisgarh 0.00% 5.35%

Madhya Pradesh 0.32% 4.11%

Uttar Pradesh 0.54% 4.44%

Uttarakhand 1.49% 6.10%

Central Region Total 0.50% 4.54%

State-wise Distribution of Bank Branches in Western Region


Dadra & Nagar Haveli 2.20% 11.84%

Daman & Diu 1.63% 5.92%

Goa 1.17% 4.74%

Gujarat 0.31% 4.76%

Maharashtra 0.76% 4.74%

Western Region Total 0.62% 4.76%

State-wise Distribution of Bank Branches in Southern Region


Andhra Pradesh 1.23% 5.52%

Karnataka 1.22% 4.02%

Kerala 1.70% 4.07%

Lakshadweep 0.00% 3.71%

Pondicherry 1.14% 9.28%

Tamil Nadu 0.64% 5.04%

Southern Region Total 1.16% 4.76%

All Regions 0.88% 4.60%


130

Table 4.52 also reveals that the north-east region has showed tremendous

growth during the post-financial inclusion phase with the CAGR of 3.39% whereas

it’s CAGR during the pre-financial inclusion phase was just 0.14%. Tripura,

Arunachal Pradesh and Nagaland have outperformed the regional average CAGR of

3.39% during the post-financial inclusion phase. Arunachal Pradesh and Manipur had

negative CAGR during the pre-financial inclusion phase, which turned positive during

the post-financial inclusion phase. The CAGR comparison between the pre and post

financial inclusion phases in north-east region shows that they are the best when

compared to any other regions.

The eastern region has also witnessed a significant CAGR growth during post-

financial inclusion phase (3.65%) when compared to pre-financial inclusion phase

(0.53%). Bihar is the best state in the eastern region whose CAGR has improved from

0.22% in pre-financial inclusion phase to 3.21% in post-financial inclusion phase.

Orissa has also shown significant improvement during the pre and post financial

inclusion phases. Sikkim has shown a negligible development during the pre-post

financial inclusion phases, when compared to other states in the region.

The central region’s CAGR during 2001-05 was 0.50% and during 2006-11 it

was 4.54%. Chhattisgarh and Madhya Pradesh are the best states which have shown

notable change in the CAGR during the pre and post financial inclusion phases.

The western region has improved its CAGR from 0.62% during 2001-05 to

4.76% during 2006-11. Dadra Nagar Haveli and Daman & Diu are the best

performers with regard to CAGR comparison between the pre & post financial

inclusion phases.

131

During 2001-05, the CAGR of the Southern region was 1.16% and in 2006-11

it has increased to 4.76%. Lakshadweep and Tamil Nadu are the best performers with

regard to the comparison of CAGR during the pre and post financial inclusion phases.

To summarize, one could easily understand that the CAGR during the post-

financial inclusion phase has witnessed tremendous growth when compared to pre-

financial inclusion phase in all the regions and in all the states.

Bank Group-wise Distribution of Bank Branches in Regions – Pre and Post

Financial Inclusion Phases

Table 4.53 reveals the Bank Group-wise Distribution of Bank Branches across

different regions by comparing CAGR between the pre and post financial inclusion

phases. In almost all the regions and in all the bank groups the CAGR during the post-

financial inclusion phase is much higher than the pre-financial inclusion phase.

However there are certain exceptions. For instance, the foreign banks’ CAGR during

the post-financial inclusion phase is lesser than the pre-financial inclusion phase in

northern, eastern, central and southern regions.

132

Table 4.53: Bank Group-wise Distribution of Bank Branches in Regions - Pre &

Post Financial Inclusion Phases

Bank-wise Distribution of Bank Branches in Northern Region

Bank Category CAGR 2001-05 CAGR-2006-11

SBI & Associate 0.90% 5.67%

Nationalized Bank 1.19% 6.83%

Private Bank 7.00% 9.30%

Foreign Bank 7.30% 3.37%

RRBs 0.99% 3.05%

LABs 0.00% 61.54%

Total 1.42% 5.64%

Bank-wise Distribution of Bank Branches in North-Eastern Region






RRBs -0.15% 1.13%

LABs 0.00% 0.00%

Total 0.10% 2.08%

Bank-wise Distribution of Bank Branches in Eastern Region






RRBs 0.01% 0.67%

LABs 0.00% 0.00%

Total 0.46% 3.62%

133

Bank-wise Distribution of Bank Branches in Central Region






RRBs -0.12% 1.56%

LABs 0.00% 0.00%

Total 0.43% 4.58%

Bank-wise Distribution of Bank Branches in Western Region


SBI & Associate -0.04% 6.45%

Nationalized Bank -0.01% 4.49%



RRBs -0.12% 1.16%

LABs -9.64% 14.87%

Total 0.53% 4.76%

Bank-wise Distribution of Bank Branches in Southern Region






RRBs 0.85% 2.85%

LABs 23.59% 2.38%

Total 1.05% 5.14%


134

Population-wise Distribution of Bank Branches in Different Regions - Pre and

Post Financial Inclusion Phases

Table 4.54 depicts that in all regions, the CAGR of rural branches is negative

during 2001-05, however during 2006-11 (post-financial Inclusion phase) the CAGR

of rural branch distribution has turned positive in all the regions. This means that the

post-financial inclusion phase has really witnessed tremendous growth in the CAGR

in all regions and in all areas, viz, rural, semi-urban, urban and metro

Table 4.54: Population-wise Distribution of Bank Branches in Different Regions

- Pre & Post Financial Inclusion Phases

Population-wise Distribution of Bank Branches in Northern Region

Population-Group CAGR 2001-05 CAGR 2006-11

Rural -1.37% 3.09%

Semi-Urban 0.16% 9.86%

Urban 5.43% 7.69%

Metro 6.59% 7.81%

Total 1.67% 6.47%

Population-wise Distribution of Bank Branches in Northern East Region


Rural -1.36% 0.97%


Urban 2.81% 9.01%

Metro 0.00% 0.00%

Total 0.14% 4.00%

Population-wise Distribution of Bank Branches in Eastern Region


Rural -0.65% 1.46%


Urban 1.24% 8.52%

Metro 7.22% 4.02%

Total 0.53% 4.16%

135

Population-wise Distribution of Bank Branches in Central Region


Rural -1.45% 0.16%


Urban -0.61% 4.99%

Metro 14.30% 9.69%

Total 0.50% 2.89%

Population-wise Distribution of Bank Branches in Western Region


Rural -2.28% 0.03%


Urban -0.28% 3.95%

Metro 3.93% 5.16%

Total 0.62% 3.13%

Population-wise Distribution of Bank Branches in Southern Region


Rural -1.72% 2.19%


Urban 4.68% 5.76%

Metro 4.42% 6.24%

Total 1.16% 3.44%


Bank Group-wise Distribution of Branches and ATMs

Table 4.55 elucidates the emerging importance of ATMs as one among the

multichannel to deliver banking services in the length and breadth of the country.

Concepts of Brown Label ATMs, White Label ATMs and Intellectual Transaction

Machines (ITMs) are all gaining momentum to reach the last mile connectivity of

mother India. An intra channel comparison between ATMs and branches of public

136

sector banks shows that the CAGR of ATMs is 31.45% to 5.39% of bank branches,

which can be interpreted as an alternative channel for banking services can be made

use extensively. From the figures of ATMs of foreign banks at the rate 18.74% of

CAGR shows their aggressiveness in exploiting the same as there are regulatory

restrictions in opening of branches. The comparison of CAGR of ATMs (28.88%)

versus branches (6.30%) shows that the focal point of banks is to reach the general

masses through cost effective alternative business decision models through ICT.

Table 4.55: Bank Group-wise Distribution of Bank Branches and ATMs

Branches and ATMs of Scheduled Commercial Banks

Year Branches (excluding RRBs) ATMs

Bank Category

( as on March)

Public Sector

Banks

Private

Sector

Banks

Foreign

Banks Total

Public

Sector

Banks

Private

Sector

Banks

Foreign

Banks Total

2006 47843 6516 259 54618 12608 7659 880 21147

2007 49666 7103 273 57042 16329 9799 960 27088

2008 52880 7975 277 61132 21788 11967 1034 34789

2009 55438 8877 293 64608 27277 15320 1054 43651

2010 58825 10027 308 69160 40680 18447 1026 60153

2011 62211 11602 317 74130 49487 23615 2077 75179

CAGR 5.39% 12.23% 4.12% 6.30% 31.45% 25.26% 18.74% 28.88%

Source: Basic Statistical Returns relating to banks of India, RBI

Bank group wise distribution of Onsite and Off site ATMs

Banks are permitted to setup On site and Off site ATMs. In case of Public sector

Banks the share of Onsite ATMs is always more than that of off site ATMs. In contrast in

case of private sector banks and foreign banks off site ATMs are dominant as distribution

channels.

Proportion of ATMs to Branches has registered a significant raise in all Bank groups.

In Public sector banks proportion of ATMs to branches has increased from 26.35%

to79.5%.In case of Private sector it has increased from 117.54% to203.9%.In foreign bank the

figure has risen to 431.2% from 339.77%.Table 4.56 gives relevant data.

137

Table 4.56: Bank Group-wise Distribution of On-Site and Off-Site ATMs


Bank

Category Public Sector Banks Private Sector Banks Foreign Banks

Percent of Total ATMs

to Total Branches Year (as

on Mar) On Site Off Site Total

Percent of ATMs

to Branches On Site Off Site Total

Percent of ATMs

to Branches On Site Off Site Total

Percent of ATMs

to Branches

2006 6587 6021 12608

26.35 3309 4350 7659

117.54 232 648 880

339.77 38.72 52.24% 47.76% 100.00% 43.20% 56.80% 100.00% 26.36% 73.64% 100.00%

2007 10289 6040 16329

32.9 4258 5541 9799

138 232 648 880

351.6 47.5 63.01% 36.99% 100.00% 43.45% 56.55% 100.00% 26.36% 73.64% 100.00%

2008 12902 8886 21788

41.2 5315 6652 11967

150.1 269 765 1034

377.4 56.9 59.22% 40.78% 100.00% 44.41% 55.59% 100.00% 26.02% 73.98% 100.00%

2009 17379 9898 27277

49.2 6996 8324 15320

172.6 270 784 1054

359.7 67.6 63.71% 36.29% 100.00% 45.67% 54.33% 100.00% 25.62% 74.38% 100.00%

2010 23797 16883 40680

69.2 8603 9844 18447

184 279 747 1026

333.1 87 58.50% 41.50% 100.00% 46.64% 53.36% 100.00% 27.19% 72.81% 100.00%

2011 29795 19692 49487

79.5 10648 13003 23615

203.9 286 1081 1367

431.2 100.5 60.21% 39.79% 100.00% 45.09% 55.06% 100.00% 20.92% 79.08% 100.00%

CAGR 35.24% 26.74% 31.45% 26.33% 24.48% 25.26% 4.27% 10.78% 9.21%

138

Number of Bank Branches opened at Unbanked Centers

An under-banked district is the district where the average population per bank

branch is more than the national average (12000). The percentage share of Unbanked

Centers to Total Branches opened was not encouraging even though there were some

marginally consistent increases in the share since 2007.

An unbanked centre is one which is deprived of basic banking services. The

under-banked district is the district where the Average Population per Branch Office

(APPBO) is more than the national average (greater than 12000). The percentage

share of unbanked centers to total branches opened was not encouraging even though

there was some marginal increase in the share since 2001, but followed by

inconsistency. The percentage of unbanked centers opened to total branches ranges in

between 0.15 percent to 5.83 percent. Even though in 2005-2006 the concepts of

inclusive growth and in furtherance the coinage of financial inclusion has taken place

but the repercussions are yet to set a bench mark and abysmally accounted for 0.15

percent in 2006.

Table 4.57: Number of Bank Branches opened at Unbanked Centers

Year (as on March)

Number of Branches opened

Branches Opened at Unbanked

Centers

Percentage of Unbanked to Total Branches Opened

2001 562 4 0.71 2002 548 12 2.19 2003 844 45 5.33 2004 923 8 0.87 2005 1250 15 1.2 2006 1331 2 0.15 2007 2731 85 3.11 2008 4145 186 4.49 2009 3875 226 5.83

Source: Branch Banking Statistics (2010), RBI Publications, RBI

139

Number of Bank Branches Opened or Closed/Merged/Converted

Table 4.58 highlights that the number of bank branches opened or

closed/merged/converted during the study period for different category of banks. The

overall expansion of branches during the study period in terms average number is

2444 and the other way round for the closed/merged/converted figure is 207. The

ratio of closed to open stands at 8.46%. In terms of CAGR the number of branches is

opened at the pace of 24.12% per annum. The closure is at the rate of -14.62%. The

closed to open ratio for public sector, private sector , RRB, foreign and LAB stands at

6.46%, 11.07%,18.18%,60%, and 25% respectively. The negative CAGR is

encountered for foreign banks (-1.99%) and local area banks (-7.58%) due to net

decrease in addition of bank branches. The highest number of average addition

(1577) is done by public sector banks and least is by LABs (4).

140

Table 4.58: Number of Bank Branches Opened or Closed/Merged/Converted


Bank Category 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Average CAGR All Commercial Banks: Total as on March 67937 68195 68500 69071 70373 71177 74346 82408 87768 88203 93080 76460 3.20% Opened 574 516 925 770 1431 928 2590 3785 5023 5356 4981 2444 24.12% Closed/Merged/Converted 505 258 575 199 238 124 119 56 49 51 104 207 -14.62% Net Increase/Decrease 69 258 350 571 1193 804 2471 3729 4974 5305 4877 2236 53.08% Public Sector Banks: Total as on March 47643 47676 47923 48150 48909 49395 51838 57497 61301 61653 64673 53333 3.10% Opened 266 237 532 377 733 440 1671 2514 3603 3858 3117 1577 27.90% Closed/Merged/ Converted 159 204 177 150 88 74 70 36 34 36 97 102 -4.82% Net Increase/Decrease 107 33 355 227 645 366 1601 2478 3569 3822 3020 1475 39.66% Private Sector Banks: Total as on March 5381 5578 5589 5903 6448 6746 7401 9186 10387 10452 12001 7734 8.35% Opened 201 214 298 337 614 424 829 891 1163 1224 1550 704 22.66% Closed/Merged/ Converted 283 17 308 23 115 7 2 - 12 12 1 78 -43.14% Net Increase/Decrease -82 197 -10 314 499 417 827 891 1151 1212 1549 633 25.75% Regional Rural Banks: Total as on March 14694 14716 14755 14772 14746 14747 14802 15384 15723 15740 16034 15101 0.88% Opened 85 53 72 39 47 42 72 364 241 258 300 143 13.44% Closed/Merged/ Converted 63 31 29 22 17 41 47 20 3 3 6 26 -20.95% Net Increase/Decrease 22 22 43 17 30 1 25 344 238 255 294 117 29.60% Foreign Banks: Total as on March 205 206 212 222 245 261 272 295 310 310 319 260 4.52% Opened 11 6 21 14 31 19 13 16 15 15 9 15 -1.99% Closed/Merged/ Converted - 5 61 4 10 2 0 - 0 0 0 9 -100% Net Increase/Decrease 11 1 -40 10 21 17 13 16 15 15 9 8 -1.99% Local Area Banks: Total as on March 14 19 21 24 25 28 33 46 47 48 53 33 14.24% Opened 11 6 2 3 6 3 5 - 1 1 5 4 -7.58% Closed/Merged/Converted - 1 0 0 8 0 - - 0 0 0 1 -100% Net Increase/Decrease 11 5 2 3 -2 3 5 - 1 1 5 3 -7.58%

chapter iv distribution of branches of commercial...

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