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Operations of loss-making branches of public sector banks and insurance companies may be scaled down, Mr D. K. Mittal, Financial Services Secretary, has indicated.
“This is part of an ongoing dialogue with…not only banks, but also insurance companies. If there are loss-making branches, then we have to re-look them. Ultimately, branches have been set up to earn,” Mr Mittal told newspersons at a Confederation of Indian Industry event in the Capital on Monday.
He said that the Government was open to the idea of working out a new business strategy, relocating branches and maybe even scaling down staff.
On recapitalisation, Mr Mittal said a clear picture was likely to emerge by June-end, after the Finance Bill is passed by Parliament. The Finance Minister, Mr Pranab Mukherjee, in this year's Budget, had provided Rs 15,888 crore toward recapitalisation of banks.
The Government had infused Rs 12,000 crore into public sector banks in 2011-12. This includes, Rs 7,900 crore pumped into State Bank of India through the preferential allotment route.
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