New Delhi: Yes Bank's new chief executive and managing director Prashant Kumar told PTI that it will be shutting down 50 branches as part of a rationalization effort, which will reduce its overall network in FY21 as there will be no new openings.
Kumar took charge of the affairs of the banking business in March. The bank reported a 21 per cent reduction in operating expenses in September quarter.
The bank has already surrendered two floors in Central Mumbai's upscale Indiabulls Finance Centre, which houses its corporate offices, Kumar said.
Besides, it is aiming to renegotiate rent contracts for all 1,100 branches.
Kumar said the bank is targeting reduction in rents, a major operational overhead for lenders, by 20 per cent through the exercise. He said many branches are located too close to each other or are not financially viable. Automated teller machine (ATM) network is also being rationalized.
The bank will go back to network expansion in FY22, but the size of a branch will be much smaller than the current size, Kumar said, adding that the idea is to leverage the digital offerings to reduce dependence on branches.
In the September quarter, Yes Bank converted 35 rural branches to business correspondent locations, he said, pointing out that operational costs per month comes down to Rs 35,000 per month from Rs 2 lakh through such move.
As part of the rescue scheme, the bank is committed to employ all the existing employees at least for a year.
The Bank, however, stated, "Many branches and ATMs are located too close to each other so they will be merged and being rationalized. The Bank go back to network expansion in FY22. The Bank has converted 35 rural branches to business correspondent locations. The Bank is deploying employees to newer locations."