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Banks trim overseas operations to focus on improvement in domestic business

As part of the government's effort, reduction in international business is helping lenders improve focus on domestic growth thereby improving their net interest margins and reducing operating expenditure

August 14, 2018 / 07:44 AM IST
 
 
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Large Indian banks have of late seen their offshore operations shrinking as part of planned consolidation in the overseas businesses.

Such measures are helping public sector banks (PSBs) focus on domestic growth improving net interest margins (NIMs) and cutting operational expenditure.

Most lenders including State Bank of India (SBI), Punjab National Bank (PNB), Bank of Baroda (BoB), ICICI Bank and others have seen a de-growth in their foreign businesses.

Karthik Srinivasan, Senior Vice President at rating agency ICRA, said, "The consolidation is largely to help control their opex and focus on high yielding domestic business (around 2-3 percent) than the low margin (1-2 percent) in the international business."