Yes, partly true. Again, the opinions expressed w.r.t branch expansion is based on the experiences of different individuals.
The expansion of branches into Tier 2 and 3 is meaningful because these areas are typically served by PSU banks and the private banks would definitely want a pie of that customer base
Other than this, rapid expansion of branches without a clear strategy in urban areas is not convincing to me for the below reasons:
- One gets to see more HDFC banks adjacent to each other, as I mentioned in my previous post. I haven’t seen the Kotaks or IDFCs like this
- The majority of the current customer base of private banks are tech-savvy, salaried or business-oriented and will not have time to visit the branches
- Most banks are flooded with either pensioners or those who flood the banks to withdraw the money deposited through various government schemes and Jan dhan accounts (zero value to CASA but only puts operational stress on the banks)
- The consumers are very informed these days when it comes to insurance, and they compare various schemes through aggregators like policy bazaar and ditto before deciding to buy one. Even legacy insurance players like LIC employ associates who will reach out to potential customers at their offices or homes
- The same goes for home loans as well, since agents catch hold of potential customers either at their office or through tele-marketing. On average, I get to receive at least 5–6 calls daily offering pre-approved home and personal loans
I believe the HDFC bank management knows better but they should have a clear strategy for the expansion of branches and justify the same through acceptable revenue per branch and revenue per employee metrics
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