Banks favour physical branches despite digitisation constraints

29 Feb 2024 CW Team

Despite India's rapid digital transformation, there is a growing emphasis among banks on expanding their physical presence across the country. The widespread digitization in banking has allowed even the remotest villages to connect to the internet, initially sparking questions about the future of traditional branch banking. However, banks now acknowledge the enduring importance of physical branches, particularly for deposit mobilisation.

In the face of competition for savers' funds from mutual funds and alternative investment options, banks increasingly recognise the necessity of establishing a visible presence in areas where they aim to attract customers. This recognition has prompted the addition of over 3,500 branches by the top four private banks in the last two years.

While routine banking activities are preferred through digital transactions, more complex transactions like investments, overseas fund transfers, and loans often require in-person visits to branches.

HDFC Bank, having recently merged with its home-financier parent, has taken the lead in expanding its branch network to address the temporary assets-liability mismatch resulting from the merger. The bank's network expanded by 27 percent last year. In the same period, ICICI Bank's branches increased by eight percent, and Axis Bank's branches increased by three percent.

Even with the trend towards digital banking, a survey by Accenture in March 2023 revealed that a significant number of customers still depend on branches for balance queries and prefer face-to-face interactions for specific banking needs.

Branches represent a considerable investment for banks due to high rental and maintenance costs. However, they also serve as platforms for financial education and cross-selling opportunities, especially in rural and semi-urban areas. HDFC Bank branches break even to their costs within two years, with 90 percent of branches breaking even in 20-21 months.

Technology

29 Jul 2026

AI-Enabled Workflows Lift Profitability and Productivity

Organisations modernising frontline workflows with artificial intelligence, automation and real-time data are reporting stronger financial performance, higher productivity and improved employee engagement, according to a global study by Zebra Technologies and Oxford Economics.The research covered 1,000 senior leaders across retail, manufacturing, transportation and logistics in the US, Mexico, the UK, Germany, India, Japan, Australia and New Zealand.In transportation and logistics, 54 per cent of companies that improved picking and packing operations reported faster operational performance, wh..

India Leads Global AI Readiness but Implementation Lags

Indian companies lead global averages across all eight artificial intelligence readiness indicators tracked by JLL, but only 19 per cent have started making changes to their workplaces, according to the JLL 2026 Future of Work Survey.The study found that 77 per cent of Indian business leaders expect AI to change their office requirements, creating a 58-percentage-point gap between awareness and implementation. The survey covered more than 2,200 CEOs, CFOs and real estate leaders across 21 countries during the first quarter of 2026.Despite concerns over automation, 58 per cent of Indian leaders..

Three WOLFF Cranes Build Riyadh Cable-Stayed Bridges

Three WOLFF 180 B luffing jib cranes are supporting the construction of two cable-stayed bridges alongside the existing Wadi Laban Bridge in Riyadh, Saudi Arabia. The project is being developed for the Royal Commission for Riyadh City and executed by the ICRC joint venture comprising IC Ictas and Al Rashid Trading & Contracting Company.The cranes are handling lifting operations including formwork, reinforcement, concrete placement, work platforms, surveying equipment and other construction materials. Each crane is fitted with a 40 m jib, reaches a hook height of 157 m and offers a maximum ..