Banks rush to open branches at the year end

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Prothom Alo illustration

Banks have rushed to open new branches at the end of the year with several banks launching several branches in a single day.

Banks officials said banks have a specific target to open branches in a single year. That is why a branch opening spree hits the banking sector to meet the target. However, banks decreased opening of branches following the coronavirus pandemic as well as the introduction of the idea of sub-branches. So banks fulfill the targets at the year end.

Records of Bangladesh Bank show banks usually rush to open branches in December. Some 300 to 350 branches are launched a year and more than 100 branches open in December alone. A total of 124 branches opened in December 2020 amid the coronavirus pandemic while 111 and 74 branches ware launched in the corresponding month of 2019 and 2018 respectively.

As of June this year, the number of bank branches increased to 10,793 form that of 10,752 in December 2020. The figure rose to 10,808 by end of September this year. Bankers observed the number is likely to cross 10,900 by the end of this month. As per the Bangladesh Bank’s instructions, banks must open one out of four new branches in rural area.

As of June this year, Sonali Bank had the highest 1,226 branches spreading in upazilas and unions. Bangladesh Krishi Bank (BKB) came in the second with 1,038 branches, mostly located in rural area. BKB is followed by Agrani Bank (960 branches), Janata Bank (913 branches), Rupali Bank (583 branches), Pubali Bank (482 branches) and Rajshahi Krishi Unnayan Bank (RAKUB) (383 branches).

Among private banks, Islami Bank had the highest -- 374 branches as of June this year, followed by Uttara Bank (241 branches), National Bank (213 branches), Dutch-Bangla Bank (210 branches), United Commercial Bank (204 branches), Al-Arafah Islami Bank (191 branches), First Security Bank (190 branches), Social Islami Bank (168 branches) and BRAC Bank (167 branches). Other private banks have less branches.

Officials of several banks said many banks are opening branches to expand their services. Several banks have also been launching new branches to recruit more human resources. Owners of several banks are also employing youths from the localities by opening new branches. Such recruitment results in fall of the quality in banking services.

Speaking to Prothom Alo, managing director of City Bank Mashrur Arefin said it was very necessary to open branches for financial inclusion. But it is a time-consuming matter to make profit from newly opened branches. Nowadays, there are various methods to provide banking services so that many banks almost stop opening new branches. City Bank no longer opens any branch too. However, the trend to spread out service through alternative methods across the country would rise manifold, he added.

Mashrur Arefin further said many banks still depend on branch operations. That is why banks rush to open branches at the end of the year.

Meanwhile, banks have focused on opening sub-branches. Most of the banks are opening new sub-branches because they get the opportunity to operate like a full-fledge branch with less expenses and human resources. There were, according to the central bank, a total of 1,147 in December 2020 across the country and the figure rose to 1,672 in June this year.

This report appeared in the print and online edition of Prothom Alo and has been rewritten in English by Hasanul Banna