Yes Bank is all set to reduce its overall network in FY21 by shutting down 50 of its branches across the country. There will not be any new openings either. Prashant Kumar, chief executive and managing director of Yes Bank made the announcement and said that the decision is a part of the rationalization effort.
Kumar had in March taken over as the new chief executive and managing director of Yes Bank. The bank reported a 21 per cent reduction in operating expenses in the September quarter.
According to Kumar, the bank in order to cut its expenses has already surrendered two floors in Central Mumbai's upscale Indiabulls Finance Centre, which houses its corporate offices.
The bank is also looking at the option of renegotiating rent contracts for all its 1,100 branches.
Kumar said rents are a major operational overhead for lenders which is why the bank is targeting a reduction in rents by 20 per cent through. Explaining further he said that there are several branches located in close proximity of each other, which is not financially viable. The number of ATM machines are also being rationalized.
The bank may, however, go for an expansion in FY22, but the size of a branch will be much smaller. The focus of the bank will be to leverage the digital offerings and reduce dependence on branches said Prashant Kumar to PTI.
Just recently (September) the bank had converted 35 rural branches to business correspondent locations which helped in pulling down the monthly operational cost from Rs 2 lakh to Rs 35,000.
Meanwhile, the bank said it is committed to its employees and will contain them for atleast a year.
(With agency inputs)