Download - 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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