The collapse of several global banks and the cascading impact of US financial crisis on global markets have forced Indian banks to opt for conventional methods of banking.
ICICI Bank, the country's second-biggest commercial bank, Citibank and other lenders are now wooing customers back to the branches to beat the slowdown and also bolster customers' confidence.
The move comes almost a decade after lenders were seen encouraging customers to use alternate channels such as automated teller machines, phone banking and internet banking instead of branches in an attempt to cut costs.
ICICI has started an initiative 'Just step in' aimed at establishing direct connection with the customers. A customer walking into an ICICI branches is now being greeted by placards and badges which says 'just ask'.
"It gives us an advantage to establish quality connections and lesser misunderstanding," said V Vaidyanathan, executive director, ICICI Bank.
The interactions are aimed at selling more products including loans and investments.
The global financial turmoil and credit crisis has forced several banks and mutual funds to file for bankruptcy and governments to announce bailout packages to rescue distressed institutions.
About 58,000 commercial bankruptcies have been filed in the US through November exceeding the combined total of each year since Congress overhauled the bankruptcy laws in 2005, according to available data.
The average bankruptcy filing in the US climbed to 318 per day in November compared with 206 petitions a day since the start of recession last December.
Mirroring the turmoil stocks and commodities markets across the globe have plunged eroding gains of the past few years and shaking investors' confidence in the financial system.
India's benchmark Sensitive index has plunged more than 54 per cent since its peak in January. Indian investors withdrew more than Rs 90,000 crore (Rs 900 billion) worth of investments in October from mutual funds.
In response local banks are now increasingly renewing face to face relationship building with customers. A convenient meeting ground is the branch.
"Relationship management has changed in light of what has happened around the world," said Shyam Srinivasan, country head, consumer banking, Standard Chartered Bank.
Banks are also chasing customers because the meltdown in the financial market has left few secure investment opportunities that can attract customers.
Lenders are cutting their margin to offer some of these products to investors. 'Incredible margins are no longer available," he said.
Similarly, Citibank in October said it was reorienting its business strategy towards the customers in response to the financial turmoil.
"In front offices, we are retraining our sales teams since we are realigning from a product-driven approach to a customer-centric model. When someone walks into a branch, a person will sell everything to a customer instead of having separate sales team for each product.
"There is a lot of re-engineering and sensible re-engineering going on," former Citibank CEO, Sanjay Nayar, CEO, said in October.
But serving all the customers at branches may not be easy and could strain the limited human resources available at a time when expansion isn't exactly the buzzword.
ICICI Bank has 25 million customers and 1,400 branches while Axis bank has 13 million customers and 750 branches.
ICICI thinks the bank can take on more customers than currently being services by the branches. "Our branches can take far more customers," said Vaidyanathan. "Systems are being programmed for it."
Still, lenders are being selective in drawing customers to the branches.
"Only customers who have the need and ability to buy complex products need to have intense relationship management," said Hemant Kaul, executive director, Axis Bank.
The lender has 2,000 relationship manager spread across its branches and is selective in the approach.
High networth individuals are given the hand phone contact numbers of relationship managers while others are encouraged to use alternate channels such as automated teller machines, internet banking and call centres for routine transaction.
Typically, a customer would need to visit a branch only three to four times a month and the existing staff and branches should be sufficient to deal with the additional push back to branches, bankers felt.
ICICI soon plans to unveil a new internet banking experience for customers which has the feel and look of a bank and will have components such as teller and facility to deliver cash at customers' door step.
