Canara Bank to focus on rural areas for branch expansion

Canara Bank, which is planning to open 1,250 new branches this fiscal, expects new branches to make a turnaround in one-two years.

For setting up new branches, the bank’s emphasis will be on rural, semi-urban areas than urban/metropolitan regions. This is because of lower real estate prices and cost of operations.

The bank, during fiscal 2013-14, opened 1,027 branches, taking the total branch network to 4,755, including five overseas branches.

RK Dubey, Canara Bank Chairman and Managing Director, said new branches are being opened to achieve the twin objectives of expanding reach and improving the CASA (current and savings account) ratio.

The CASA and term deposits in rural, semi-urban areas can maintain and sustain the bank’s branch operations. “The services and product offerings of the bank can make it profitable in a short time,” said a senior bank official.

For the current fiscal, the bank has set a CASA target of 30 per cent, as compared with 25.9 per cent in FY14. “CASA ratio (domestic) improved to 25.9 per cent at the end of March 2014 from 25.1 per cent last year (2012-13),” Dubey said.

About 2,786 ATMs were added, taking the total number to 6,312 as at March 2014. Also, onsite ATMs for 3,728 branches were opened. This fiscal, the bank plans to add around 3,000 ATMs to the existing 6,312 units and has set a target of 10,000 ATMS by March 2015.