RETAIL BANKING

Presented by
Group-1
 RETAIL BANKING

When services are offered to individuals as their

personal requirements, it is called Retail Banking.

“Retail Banking should encompass all institutional who

provide a range of banking services-money
transmittion,deposit and credit service and some form
of financial advice.”

Retail Banking consists of large volumes of low value

transactions.

Retail Banking refers to the mobilization of deposit

SURVEY CONDUCTED REGARDING CUSTOMERS
USING SERVICES
Most of the customers visiting branches 2-3 times a
month.
Very much satisfied with the services.
24% are not satisfied with the minimum balance
required to be maintained in their account.
ATM’S are most preferred virtual banking technique
by customers.
At ATM’S preferred enquiry is balance and cash
withdrawal.
Internet is giving ground.
Customers using telephone having opt for four types
of functions
 - Check account balance
 - Cheque book request
 - Check credit card balance
CATEGORIZATION OF RETAIL BANKING
SERVICES
Core Services Facilitating Supporting
Payments Services
•Cash Services
•At Door
•F.E.
•T. Cs. •Internet
•D.Ds.
•T.T. •Telephone
•E.F.T.

Current a/c & •ATM •Credit Cards

Saving Bank a/c •Inter Branch •Debit Cards
•Safety vault •Internet
•Telephones
•Flexi a/c
•Senior citizen
services
CATEGORIZATION OF RETAIL BANKING
SERVICES Cont’d…
Loan Product: •Current a/c •Delivery time period
Consumer Loans •Interest Rate Option-
Personal Loans •Saving Banking a/c Fixed/ Floating
Housing Loans •Pre payment facility
Education Loans •Time Deposit a/c •Counseling
•Legal services for
documentation
•ECS for payment of
Installment

Insurance Product •C/A •Additional Insurance

•S/B for family members
•Life •T/B
•Safety vaults •Counseling on post
•General retirement savings
 RETAIL BANKING SERVICES
1) Saving Bank accounts
2) Fixed Deposit schemes
3) Current Accounts
4) Corporate Salary Accounts
5) Automated Teller Machines
6) Internet Banking Services
7) De-mat Services
8) Inter Branch Banking
9) 24- hour Loan Banking
10)Bill Pay
11)Safe Deposit Lockers
12)Debit Cards, Credit Cards and Charge Cards
13)Easy Loan
RETAIL BANKING SERVICES Cont’d…
13.) Free Investment Advisory Service
14.) Banking through Mobile Phone
15.) Free Home Services
16.) Bankassurance
17.) Kid e Bank
 ADVANTAGE OF RETAIL BANKING
Resource Side
1) Deposit stable
2) insensitive and less bargaining for additional
interest
3) Such deposit are loan cost funds
4) Strong customer base
5) Retail increases the subsidiaries business
Assets side
1) Better yield and improved bottom line
2) Good avenue for funds deployment
3) Consumers loans presumed to the lover risk
,less NPA
4) Helps economic revival through increase in
production
5) Innovative product development
6) Improve life style of people through cheap
 STRATEGIES FOR SUCCESS IN RETAIL
BANKING
Bank can formulate the following strategies
in order to achieve success in the retail
banking segment

 Adoption of advanced and latest technology

 Skilled man power in all branches and offices

 Balanced and sustained growth in deposits and

advances
 Strategic cost management
 STRATEGIES FOR SUCCESS IN RETAIL
BANKING Cont’d…

 Market research and market intelligence in

order to formulate competitive and innovative
products
 Customer relationship management

 Universal banking/ financial supermarkets

 More delivery channel


 TYPES OF RETAIL LOANS
Installment Credit Clean Demand Loan,
Immovable Property,
Housing Loans Future Rentals
Home Financing, House
Construction Loan
Educational Loans

Regular, General, Serving

Personal Consumption
Professional,
Loans
Executive, Rural,
Urban, Semi-urban
Credit Card/Revolving
Credit Pensioners, Vehicle Loan,

Executive, Rural,
Overdraft/Open Credit
Urban, Semi-urban
 TYPES OF RETAIL LOANS Cont’d…
Mahila Vikas Yojana Griha Sewa, Beauty Parlor, Boutiques,
Tailor Shops

Small Traders Day to day loans, Timber merchants

and Saw mills

Earnest money scheme, Bon Voyage

Others
scheme for financing travel
and tour, Defense Personal Loan, CNG
Kits,
 EVALUATING RETAIL LOANS
 Differ from commercial loans

No comprehensive analytical format applies

 In commercial loans, financial papers , etc are

available on which credit decision is taken

 Consumer loans are peculiar, bank cannot guage the

creditworthiness of the borrower

 Credit analysis and credit scoring techniques

 EVALUATING RETAIL LOANS Cont’d…
CREDIT ANALYSIS/SCORING TECHNIQUES
Credit Analysis includes 6c’s namely character,
capital, capacity, condition, collateral, compliance
 Credit Scoring covers certain steps
are as follows-

Judgmental as well as credit scoring

procedure

Through score bank states the

borrower in terms of risk

Historical data on the performance of

previous loan is analyzed good/bad
weighted average of borrowing
 RISK MANAGEMENT & RETAIL
BANKING
 Intensive competition
 Banks may compromise on quality of credit.
 Banks have to target specific customer base on
individual behavior, needs and value.
 Customer data based stored in the bank would be
handy.
 International trends shows that large losses can be
related to retail loans portfolio.
 There is need to tread cautiously and manage risks
proactively.
 Through portfolio of retail loans is better diversified
than corporate loans a systematic risk arising out of
macroeconomics shock could still have a large
negative impact.
 RISK MANAGEMENT & RETAIL
BANKING Cont’d…
Risk includes following -

Deficiencies in lending policies

 Incorrect product structuring

 Inadequate loan documents

 Deficiencies in credit appraisal

 Inadequate risk pricing

 Inadequately defined lending limits

 EMERGING ISSUES IN HANDLING
RETAIL BANKING
Knowing The Customer
b) Easier said than practiced
c) Branch data warehousing
d) Customer preferences, spending patterns

Technology Issues
g) Huge investment in technology
h) New delivery channels, ATMs, credit cards etc.
 EMERGING ISSUES IN HANDLING
RETAIL BANKING Cont’d…
Product Innovations
b) New products may not become successful
c) Product should create value not amusement
d) Can not sell the product on shelf

Pricing Of The Product

g) Banking sector witnessing price war
h) Transparency in pricing
i) Minimum amount due, total amount due, processing
charges not advertised in credit cards, so these are
hidden charges
 EMERGING ISSUES IN HANDLING
RETAIL BANKING Cont’d…
HRD Issues
b) Motivating frontline staff, project them as sales
managers rather than as clerk
c) Changing the image of the bank from transaction
provider to solution provider
Low Cost And No Cost Deposits
f) Banks are in need of more s/b a/c and current a/c so
that their cost of liability is less
NEW BANKING SERVICES TO BE STARTED
IN COMING YEARS BY NPSBS
More Services through ATM’S
Smart Cards
E-Cheques
Wealth Management Services