Banks to open 570 new branches

In order to further expand the banking services across the country, banks have planned to open 570 new branches under the expansion plan. Sources in the banking sector told Business Recorder on Thursday that the State Bank of Pakistan (SBP) under its Branch Licensing Policy (BLP) has issued 570 licenses to banks, DFIs and Microfinance Banks to open new branches, sub-branches and booths in calendar year 2011.
Although, this year banks plan to open 37 percent or 153 more branches as compared to 2009, however it is still less than 2008, when highest-ever 730 branch or sub-branch licenses were issued by the State Bank in any year. In 2010, the State Bank had issued 417 branch licenses.
As of February 28, 2011 the total number of bank branches operating in the country stood at 10,270. It was 9,853 in calendar year 2010. With the addition of new branches and sub-branches, total number of branches will reach 10,840 across the country by 2011-end. Under BLP, commercial banks, which wanted to open new places of business during a calendar year, are required to submit their Annual Branch Expansion Plan (ABEP) to the State Bank for consideration and approval.
Accordingly, various banks submitted their ABEP-2011 and were granted approval for opening branches. As required under the BLP, banks are required to open at least 20 percent of their branches in rural/under-served areas (RUAs). RUAs mean villages, small towns and also those Tehsil Headquarters where there is no branch of any bank.
Accordingly, for 2011 some 110 branch licences have been issued for opening branches in RUAs that are as per the mandatory requirement of opening of 20 percent in rural areas. The locations identified by banks for opening new branches are well-diversified throughout the country covering all the four provinces of Pakistan, Northern Areas, Azad Jammu & Kashmir and Islamabad.
In addition, out of total licences issued for current calendar year, as many as 414 licences have been specified for opening complete branches, some 97 for sub-branches and 59 booths for Microfinance Banks/institutions. Recently, the State Bank fixed a fee of Rs 50,000 for duplicate licenses of any bank branch.