Branch Rationalisation at Bharat Sahyog Bank: A Plan That Works on Paper

Why the current architecture fails. A single-metric incentive on deposit growth tells every branch manager to defend his branch. Closing a branch is a personal loss under that scorecard, so the organisation will rationally resist a strategy its own metrics punish. "Decorative" cross-sell targets are worse than none - they signal what the bank says without changing what it pays for.

Balanced scorecard, four perspectives.

• Financial: risk-adjusted contribution per branch (deposits × spread − direct cost − allocated cost), cost-to-income, fee income share.
• Customer: active digital users per branch, products per customer, NPS in the migrated cohort, complaint resolution time.
• Internal process: percentage of transactions straight-through, average queue time, account-opening TAT, migration completion against plan.
• Learning and growth: staff certified on the assisted-digital model, redeployment acceptance rate, attrition in affected branches.

OKRs for the transformation office (quarterly). Example: "Make 150 exits clean and 60 conversions productive" with key results - 100% of affected customers personally contacted; 85% digital activation within 60 days of migration; converted units at ≥70% of their previous contribution by month nine; zero increase in complaints per 1,000 accounts.

Incentive fix. Pay branch managers on risk-adjusted contribution and customer activation, not deposit volume; add an explicit migration-completion component for affected branches for four quarters; guarantee incentive neutrality for managers who move to converted units for two quarters. Give the transformation office budget authority over branch cost lines for the duration - without it, the plan is a suggestion.

Judgement point. The 11-month payback is believable only if the cross-sell and activation metrics move; the cost line alone will show savings while the franchise quietly shrinks.

What the paper plan assumes.

1. Deposit attrition of 4% is optimistic. Rural deposits are relationship-bound and older; 4% is a national-bank benchmark, not a co-operative-style base. Model 8–12%; at 10% on ₹3,100 crore, the margin loss at a 6.5% spread is roughly ₹20 crore a year, cutting net savings by more than a tenth.
2. One-time cost of ₹145 crore is understated if it excludes VRS, lease-exit penalties and the cost of redeploying 300+ staff; redeployment without retraining delivers warm bodies, not productivity.
3. No sequencing. Closing 150 branches and converting 60 simultaneously uses the same small team, the same IT change queue and the same goodwill.
4. No stakeholder cover. Union notice and district collector objections are not PR problems; they can delay statutory and lease exits and invite regulatory attention.

Sequencing.

• Q1: close 40 branches with the lowest deposit-per-staff and no rural-block exposure; run the assisted-digital conversion in 15 urban-adjacent units as a proof point; finalise VRS and redeployment terms with the union before any notice.
• Q2: convert the remaining 45 using the Q1 playbook and measured activation data; publish migration results internally.
• Q3–Q4: close the remaining 110 only where Q1–Q2 activation and attrition data support it; hold the rural-block branches and negotiate service-altitude commitments with district administration.

Leading indicators. Customer contact completion, digital activation within 60 days, attrition curve versus the 10% stress case, complaints per 1,000 accounts, staff redeployment acceptance, cost per transaction in converted units.

Realistic board case. Net annual saving of ₹110–125 crore, payback 15–18 months, contingent on union agreement and activation. Present the stress case, not the 11-month case - a plan the board believes is risk-free is a plan nobody manages.