Chennai: Public sector lender Indian Overseas Bank (IOB) will shut 10 of its regional offices to improve efficiency and reduce administrative costs.

These branches will be closed by 1 March, the bank informed BSE in a statement on Monday. Currently the bank has 59 regional offices and seven zonal offices.

The exchange had sought a clarification from the bank based on a news report in Business Standard dated 7 January that said that IOB will close 10 of its regional offices.

The bank, however, said such a move will not lead to staff retrenchment of employees. The decision to close a few regional offices was taken by the board of directors in a meeting held on 12 December 2015, the bank said in its clarification.

The Reserve Bank of India had on 5 October called for corrective action at the bank to check bad loans, improve internal controls and consolidate its business activities.

As of 30 September, the bank had total bad loans of 19,400 crore (11% of the loan book) compared with 3,326 crore (3.78%) five years ago. It topped the list of 24 listed public-sector banks that have at least 5% or more gross non-performing assets (NPAs).

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