seminar on retail banking

8/6/2019 Seminar on Retail Banking

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PRESENTED BY- ILA JOSHI (32191)

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Dealing of commercial banks with individualcustomers, both on liabilities and assets sides

of the balance sheet.

Provision of banking services to individualsand small business where the financial

institutions are dealing with large number oflow value transactions.

This is in contrast to wholesale banking.

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Liberalization policy on 1990s

Spreading of risk

Growth in banking technology & automationof banking process

Changing profile of consumers

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Until 2010 retail banking is expected to grow at CAGR of

28% of touch figure INR 9,700 billion.

As of end-June 2008, the number of ATMs in the country had

climbed to 36,314 compared to 27,088 & 20,267 as at end-

March 2007 and 2006, respectively.

The number of bank branches providing CBS rose rapidly to

44 per cent at end- March 2007 from 28.9 per cent at end

March 2006.

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Multiple products

Multiple channels of distribution

Multiple customer groups

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Promote economic development.

Be a One-Stop Shop for Consumers

Improve service capability

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Any where, any time banking Improved processes and bundled product

offerings Faster service Customer-specific products or offerings on a

regular basis Bank customer has replaced Branch customer

Focus on understanding customer needs orpreferences Segmentation or differentiation of customers Customer-driven strategies

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All round increase in economic activity

Changing demographics

Technological advancements

Tax benefits

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Types of Home Loans :

Home Purchase loans

Existing home improvement loans Home construction loan

Home extension loan Land Purchase Loans

Bridge Loan

Interest rate: Range from 8 16 %

HOME LOANS

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Use the loan amount for any purposes ( legal

& ethical) like marriage expenses, medical

expenses Loan ranges Min. -50,000

Max.-15,00,000

Period - 12 to 60 months Rate of interest 12 to 24%

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Sources- RBI 12


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New car loan

Used car loan

Maximum extent of car loan 95% cost of thevehicle

Interest rate 10 18 %

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Cover course fee, Examination fee,

Refundable deposits ,Purchase of books ,

Travel expenses Repayment of loans Course period+1

year/6months after getting jobs

Interest-

Loan upto 4 lakhs- 12% P/aLoan upto 4-5 lakhs-13% P/a

Loan upto 15 lakhs - 15% P/a

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Cash cards : known as an ATM card

Used for getting currency notes from a ATMmachine

DebitCards :

Allow direct withdrawal of funds from acustomers bank account

Used for purchasing goods & services

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0

20

40

60

80

100

120

140

160

180

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

r it

D bit

Sourc s- RBI


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0

500

1000

1500

2000

2500

3000

2005-06 2006-07 2007-08 2008-09 2009-10

CREDIT CARDS ( IN LAKHS)

NO. OF TRANSACTION( IN LAKHS)

Sources- RBI18


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Pay the entire dues within the credit period

and cannot carry over any balances like acredit card.

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Referred to as an

integrated card/chip card

Enables the cardholder toperform various otherbanking functions apart

from credit purchases

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ITEMS OUTSTANDING

MARCH(CRORE) 2009

OUTSTANDING

MARCH2010

PERCENTAGE

VARIATION2009

PERCENTAGE

VARIATION2010

HOUSINGLOANS

2,52,932 2,63235 12.7 4.1

CONSUMERDURABLES

4,802 5,431 -34.2 13.1

CREDIT CARDRECIEVABLES

27,437 29,941 49.8 9.1

AUTO LOAN 87,998 83,915 6.6 -4.6

OTHERPERSONAL

LOANS

1,97,607 2,112994 27.5 6.9


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Various delivery channels:

Automated Teller Machines (ATM) Mobile banking

Phone banking

Internet banking

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Money laundering

Technology issue

Outsourcing

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Firewalls and filtering routers ,Encryption

techniques, Digital certification procedures.

Complaint and Request Tracking System(CARTS)

Six sigma in retail banking.

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STRENGTH:

Provides diversified asset portfolio

Various delivery channel

Innovative product development

Economies of scale

WEAKNESS :

Short life cycle of technology

Avoids corporate sector

Co-ordination between various

department

OPPORTUNITIES:

Rise in income

Economic growth

THREATS:

Large disbursement of loans

Issue of customer privacy

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Constant product innovation

Quality product service and quickness indelivery

Introduction of new delivery channels

Retail market research

Cross selling products

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Retail banking offers phenomenal opportunities forgrowth, the challenges are equally discouraging.How far the retail banking is able to lead growth ofbanking industry in future would depend upon thecapacity building of banks to meet the challengesand make use of opportunities profitably.

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seminar on retail banking

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