SBI, PNB To End Zonal Offices To Boost Efficiency

MUMBAI: In a bid to reduce the turnaround time, two of the country’s largest banks, State Bank of India and Punjab National Bank, have decided to do away with zonal offices. This will reduce one layer of branches reporting to corporate offices.

As a result, nearly 58 zonal offices of SBI will be closed while around 26 zonal offices of PNB will shut down, too. Sources said the move was aimed at making more bank officials available for garnering business.

PNB approved the proposal on December 19 at a board meeting held in Hyderabad. Speaking to ET, bank chairman and managing director KC Chakrabarty said: “The move is aimed at making more people available on the field. There has been duplicity of role between the regional and the zonal office, which had to be refitted. In 2005, Boston Consultancy had recommended to PNB delaying in the reporting structure.”

SBI has about 5,800 to 6,000 officials in its 58 zonal offices and nearly half of them will be made available for sales and marketing while the balance will be absorbed in the local head office (LHO) or regional offices. PNB, on the other hand, has about 2,000 officers and clerks in its zonal office who will be employed in the sales force or sent to strengthen the head office.

So far, branches were reporting to the regional office which, in turn, were reporting to zonal office. In case of SBI, the zonal office reports to local head office, which reports to the central office while in case of PNB, zonal office reports to the head office.

SBI has initiated a pilot project in some centres such as Kerala and Bangalore and now it plans to implement the same in Chandigarh. SBI officials say the move to de-layer is the outcome of the bank’s business process re-engineering (BPR) initiatives and implementation of core banking activities.

Under BPR, branches will primarily undertake the function of marketing and servicing customers while documentation will be done at the back office. SBI has all its top 100 centres on BPR initiative which would involve around 2,400 branches.