f 08 retail banking (1)

7/25/2019 F 08 Retail Banking (1)

1/21

Industry Awareness Report on

Retail Banking

Group 8 Section F

Arun Antony (2014PGP060)

Benazir Xaxa (2013PGP095)

M Revanth Rey (2014PGP1!6)

Pu"a#a"a $u%a Pra&ant (2014PGP2'5)

$huhi $inh (*PM2011104)

$ona" $riva&tav (2014PGP3'1)

$uoh +yan#at ,ah%oe (2014PGP429)

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2/21

Contents

Executive Suary !

C"apter #$ Industry %verview &

1-1 Retai" Ban#in in *nian $.enario 4

1-2 Mar#et Gro/th rate 4

1-3 $tru.ture o the *nu&try 4

1-4 Mar#et $hare& an $e%enta" Ana"y&i& 5

1-5 Pa&t an uture tren& 6

1-6 ey ro/th rive& an eror%an.e ini.ator& '

1-'yna%i.& o the *nu&try an &u..e&& a.tor& '

1-! aenin& in the *nu&try !

C"apter '$ (layer)s pro*ile overview ##

2-1 Pu"i. $e.tor Ban#& (P$B&) in *nia 11

2-1-1 $tate Ban# o *nia 11

2-1-2 Ban# o Baroa 11

2-1-3 Puna 7ationa" Ban# 11

2-2 Private $e.tor Ban#& in *nia 12

2-1-1 8 12

2-1-2 *8*8* 12

2-1-3 AX*$ Ban# 12

2-3 Proitai"ity an revenue er e%"oyee tye .o%ari&on&----------------------------------------13

C"apter !$ +acro,Econoic pro*ile o* retail -anking in India 1&

3-1 ey oint& o *%a.t :7*;7 2014


3/21

Executive Suary

Retai" an#in ha& turne out to e the %aor ro/th river o the an#in inu&try an ha&

exerien.e hih ro/th in the re.ent a&t- >here i& "enty o oortunity in thi& &e.tor a&

re.e&&ion ha& &"o/"y ta#en a a.#&eat an the .on&u%tion o eo"e i& raua""y in.rea&in-

a&t ro/th in er&ona" /ea"th a&t rate o eve"o%ent in inor%ation te.hno"oy

avoura"e e%orahi.& avoura"e %a.roe.ono%i. environ%ent inan.ia" reor%& an

%i.ro "eve" &u"y &ie a.tor& are "ayin a .ru.ia" ro"e in the ro/th o thi& &e.tor- >he

an#& are a"&o tran&or%in their &trateie& an aotin orani. ro/th a""ian.e an

a.Cui&ition&- >hu& the %ar#etin &trateie& have &inii.ant"y .hane or the retai" an#&-

=ven the u"i. &e.tor an#& are ivin touh .o%etition y are&&ive %ar#etin an

"everain their rura" net/or# an .u&to%er a&e- *nnovative &trateie& "i#e .ro&& &e""in

a.#ain o &ervi.e& an te.hno"oy a&e &ervi.e& have e.o%e very reva"ent in the

%ar#et-

>he *nian .on&u%er inan.e %ar#et /itne&&e a .o%oun annua" ro/th rate o 16-4D

urin the erio 200'he ore.a&t 8AGR or 2012hi& &tron

ro/th rate /i"" e %aor"y attriute to *nia ri&in e%"oy%ent "eve"&- >he une%"oy%ent

rate i& exe.te to e.rea&e ro% 6-6D to 6-3D in the erio 2011hu& er&ona"

.on&u%tion exeniture i& exe.te to ra&ti.a""y in.rea&e ivin /ay to &ure in e%an

or .on&u%er inan.e rou.t& an &ervi.e& "i#e er&ona" "oan& eu.ation "oan& hou&in

"oan& .ar "oan& %ortae "oan& et.-

>he %aor %a.roe.ono%i. ro/th river& in the ro/th o thi& &e.tor are in.rea&e in

i&o&a"e in.o%e& o .on&u%er& aora"e intere&t rate& tax in.entive& an &u&taine

e.ono%i. ro/th- >he %ar#et &"iht"y e.e"erate to/ar& the en ue to *niaE& &tri.t

reu"atory environ%ent-

>he hou&in "oan enerate 56-9 D o the tota" retai" an#in revenue& in 2011- >he o"

"oan& .ateory ha an i%re&&ive 8AGR o 43-93D an /a& one o a&te&t ro/in .ateory

in the revie/ erio- >he auto "oan .ateory ha a 8AGR o 1!-!5 D in the revie/ erio-

ue to the .ountryE& hih eau"t rate .reit .ar "oan a.i"ity re.ore


4/21

C"apter #. I/01S2R3 %4ER4IE5

#$# Retail Bank in Indian Scenario.A an# /hi.h .arrie& tran&a.tion& in a B28 %oe"

rather than B2B %oe" (.ororation& or other an#&)- $o%e o the &ervi.e& oere y retai"

an#& are %ortae& eit an .reit .ar& er&ona" "oan& et.- Bu&ine&& %oe"& .on&i&t o

a.Cuirin a "are .on&u%er a&e y oerin %u"ti"e rou.t& attra.tive ri.in an

roitai"ity .ro&& &e""in an u &e""in inan.ia" rou.t& to i%rove er .u&to%er revenue-

Retai" an#in a& a u&ine&& %oe" i& ein aote y a"" the an#& in *nia-

Pu"i. &e.tor an#&F *rre&e.tive o the a"an.e &heet& or any other ara%eter& thi& u&ine&&

%oe" i& ein e%"oye unior%"y y a"" the an#&- Pu"i. &e.tor an#& e%"oy retai"

an#in a& one o their u&ine&& %oe"& /ithout re&tri.tin to on"y thi& %oe"

Private &e.tor an#&F *n ear"ier ay& the overa"" u&ine&& .o%ri&e o retai" an#in a& a art

o the entire "an rather than a &earate a.tivity- >he&e ay&E rivate &e.tor an#& &et u $B:

(&tratei. u&ine&& unit) to have ."ear u&ine&& oe.tive&-

orein an#&F >he %oe" i& &i%i"ar to rivate &e.tor an#& ut /ith a eine u&ine&& o.u&-

#$' +arket Growt" Rate.Gro/th rate or the an#& .an e inerre ro% the o""o/in ta"e2a-le #$# (er*orance Indicators o* Growt" rate o* Banks6

(er*orance Indicators '7#7 '7## '7#' '7#!

Pou"ation er an# 14000 13000 13000 12000

Per .aita eo&it R& 3910' R& 45505 R& 501!3 R& 563!0Per .aita .reit R& 2!431 R& 341!' R& 3!!'4 R& 4402!

7o o $8B 163 163 169 151

7o o ran.he& !!203 94019 1023'' 109!11

Ban# .reit in i""ion R& 3244! R& 39421 R& 46119 R& 52605

Areate eo&it& in i""ion R& 4492! R& 520'! R& 59091 R& 6'505

#$! Structure o* t"e Industry.

ey (layers. A..orin to u&ine&& >oay< PMG e&t an# 2013 &tuy the to "ayer&

are F $B8 eut&.he Ban# an Ban# o A%eri.a(a..orin to a&&et Cua"ity) *B* @a%%u

a&h%ir Ban# Ban# o 7ova $.otia (a..orin to rou.tivity an ei.ien.y) Ban# o

Mahara&htra Ratna#ar Ban# Ban# o >o#yo (a..orin to ro/th)

iure 1-1 >o Ban#& 7et roit /i&e (a"" i in %i""ion&)6

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5/21

#$& +arket s"ares and segental analysis.

2a-le #$' +arket s"are o* Banks9

Ban# 7a%e

Mar#et &hare

(D)

$B* 19-1

*8*8* 10-34

P7B 5-4!

B;* 5-2

8anara Ban# 4-92

Ban# o Baroa 4-!9

*B* 3-''

8B* 3-35

8 2-91*nian ;ver&ea& an# 2-''

Axi& 2-'3

;B8 2-5

A""ahaa Ban# 2-2!

*nian Ban# 1-!3

$tanar 8harte 1-53

;ther& 26-4

ierent &ervi.e &e%ent&F

>a"e 1-3 ierent &ervi.e &e%ent &hare in revenue D !

Services :

8reit .ar& 29

eit .ar 2'

=8$ 1'7=>?=> 15

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6/21

7=8$?=8$ 12

Source.

Gro/th o A>M& ro% 2006< 2013 /a& 2!-! D i-e- ro% 21509 to 126950-

#$6 (ast and Future trends.

#$ +o-ile -anking and social edia. >he internet .hane the /ho"e a.e o B28

intera.tion y .reatin a ne/ "eve" o intera.e- ,ith the &a"e& o %oi"e& in.rea&in at a reat

a.e the .ororate i& tryin to rea.h the .on&u%er& anyti%e at any "a.e /ith the he" o

%oi"e net- >hi& %oi"e an#in ena"e the .o%anie& to %ar#et their rou.t& an

i%rovi&e the .u&to%er intera.tion- Retai" an#in i& o""o/in the &a%e ath- $i%i"ar"y

&o.ia" %eia i& a"&o roviin a "ator% or ran eve"o%ent- ,ith in.rea&e in nu%er o

u&er& o variou& net/or#in &ite& "i#e a.eoo# an ou>ue the .o%anie& /ere a"e torea.h .orner& o the /or"-

'$ +oney transactions via internet. ,ith the avent o e


7/21

2- 8hanin .on&u%er e%orahi.& .au&e& va&t in.rea&e in .on&u%tion oth Cua"itative"y

an Cuantitative"y- *nia ha& %ore ha& a %aority o youn ou"ation- '0D eo"e are

e"o/ 35 year& ae-3- eit .ar& internet an#in an hone an#in any/here an anyti%e ha& een a"e to

attra.t %ore an %ore .u&to%er&-4- Retai" u&ine&& he"& in roit %axi%ization5- e."ine in intere&t rate& have enerate e%an or "oan rou.t&

ey (er*orance Indicators#7.

1- 8"ient i&&ue .onta.t rate2- ata tran&%i&&ion .o&t3- 8o&t er "oan a"i.ation4- Ioan arova" ti%e5- 8u&to%er& u&in on"ine an#in &ervi.e&

6- 8o&t er te""er tran&a.tion'- Ban#in re"ation&hi ti%e &an!- Retai" an#in ei.ien.y ratio

#$90ynaics o* t"e Industry and Success *actors.

Ba&i. ro/th &trateie& o retai" an#& are the o""o/in

1- or 7i.he "ayerF o.u& on exi&tin ."ient& rou.t& an &a"e& .hanne"& eorahi.a"

roaenin o u&ine&&2- or $e.ia"i&t&F o.u& on exi&tin rou.t "ine&- *n.rea&e in the nu%er o i&triution

.hanne"3- or o.u& &trateyF 8on.entration on #ey &a"e& an en"are%ent o an#in rou.t& an

&ervi.e&4- or :niver&a" an#&F o.u& ro/th in a"" ire.tion& inve&t%ent in the eve"o%ent o

ne/ rou.t& an re&e.tive &a"e& .hanne"&

Critical Success Factors.

Banks) si


8/21

Speed o* arket entry

*nnovative an#& are a"e to .aita"ize on an ear"y %over avantae

Hui.# %ar#et entrant& are a"e to et ear"y .u&to%er eea.# an &o they .an au&t their

uniCue ."ient roo&ition

$ee o %ar#et entry i& .ru.ia" or rain &izea"e %ar#et &hare an eine

.o%etitive roo&ition in the uture

#$8=appenings in t"e Industry.

Recent Events#'.

a) *nra&tru.ture Iea&in inan.ia" $ervi.e& Ii%ite (*I$) ha& &ine anMo: /ith

*nu&tria" an 8o%%er.ia" Ban# o 8hina (A&ia) Ii%ite (*8B8 (A&ia)) or %utua"

.ooeration in inra&tru.ture roe.t eve"o%ent &ervi.e& an inan.ia" &ervi.e&

in.rea&in the u&ine&& oortunitie& or oth the in&titution&-

) $tanar 8hartere Ban# ouht :$he ea" /hi.h /a& .o%"ete at the en o 2013 oo&tethe

or%erJ& rivate /ea"th a&&et& uner %anae%ent y 25D-

.) +oaone *nia an *8*8* Ban# artnere or "aun.hin an e"e.troni. %oney tran&er an

ay%ent &ervi.e iea""y throuh %oi"e hone& na%e M


9/21

31&t Mar.h 2013 Axi& Ban# ha& a.hieve .on&i&tent ro/th an &ta"e a&&et Cua"ity /ith

a 5 year 8AGR (2009ota" A&&et& 24D in >ota" eo&it& 2'D in >ota"

Avan.e& an 3'D in 7et Proit-11

) han"ax%i Ban# earne the tru&t an oo/i"" o ."ient& throuh it& ri.h heritae-

$ervi.e u&ine&& /orth R&- 21595 .rore& a& on 31 Mar.h 2011 .o%ri&in eo&it& o

R&- 12530 .rore& an avan.e& o R&- 9065 .rore&- =arne a net roit o R&- 26-1 .rore&

or the inan.ia" year ene 31&t Mar.h 2011 /ith a .aita" aeCua.y ratio o 11-!D

(Ba&e" **) urin the &a%e erio-11

h) Ratna#ar Ban# Ii%ite (RBI) i& one o *niaE& a&te&t ro/in &.heu"e .o%%er.ia"

an#&- *t i& .ontinuou&"y exanin it& re&en.e a.ro&& *nia throuh a ro/in net/or#

o ran.he& an A>M&- =&ta"i&he in 1943 RBI unertoo# a tran&or%ationa" ourney

uner a ne/ %anae%ent tea% in 2010-;ver the "a&t t/o year& it ha& inu&e .aita" o

over R&- 1100 8r& ro% &o%e o the %o&t nota"e "oa" an o%e&ti. na%e& ta#in the

>*=R 1 .aita" to R&- 1600 8r& (arox-)11

+erging and ac>uisition activity in t"e arket12

A enera" ter% u&e to reer to the .on&o"iation o .o%anie&- A %erer i& a .o%ination o

t/o .o%anie& to or% a ne/ .o%any /hi"e an a.Cui&ition i& the ur.ha&e o one .o%any

y another in /hi.h no ne/ .o%any i& or%e-

Reu"ation& rearin %erer& an a.Cui&ition in *nia

Merer .ontro" reCuire%ent& in *nia are .urrent"y overne y the rovi&ion& o the

8o%anie& A.t 1956 (the L8o%anie& A.t) an the $e.uritie& an =x.hane Boar o *nia

($u&tantia" A.Cui&ition o $hare& an >a#eover&) Reu"ation 199' (the L>a#eover 8oe)

ra%e y the $e.uritie& an =x.hane Boar o *nia (L$=B*)- *n .a&e o an#in &e.torarova" i& reCuire ro% the Re&erve Ban# o *nia (the LRB*) uner the Ban#in

Reu"ation A.t 1949-

ota# Mahinra Ban# ha& a"reay &o" 4-5D &ta#e in the an# or K296 %i""ion (aroun

R&1 400 .rore toay) to $u%ito%o Mit&ui inan.ia" Grou *n.- (2010)

*8*8* Ban# It i& in the ro.e&& o a.Cuirin Ban# o Raa&than It- *8*8* Ban# ha

ear"ier a.Cuire Ban# o Maura It an $an"i Ban# It-(2010)

e& Ban# It i& in ta"#& to uy the "o.a" retai" an .o%%er.ia" oeration& o Roya" Ban#

o $.ot"an Grou (RB$)- (2013)

Page | 9


10/21

$B* roo&e .on&o"iatin a"" &u&iiary an#& /ith $B* in 12he Re&erve an# o *nia o *nia rante ne/ "i.en.e& to *8 "t an Banhaninan.ia" $ervi.e&- 7o *nian Ban# ha een or%e &in.e =$ an# in 2004-

*8 i& a Mu%aiouro (LART.NS) *niaJ& ie&t enineerin rouN an $hrira% 8aita" the

ho"in .o%any or $hrira% >ran&ort inan.e 8o%any (SRTR.NS)-

/on,(er*oring Assets.

A ."a&&ii.ation u&e y inan.ia" in&titution& that reer to "oan& that are in eoary o

eau"t- ;n.e the orro/er ha& ai"e to %a#e intere&t or rin.ia" ay%ent& or 90 ay&

the "oan i& .on&iere to e a nonhe net nonhe an# ha reorte 5-'3

er .ent o it& a&&et& a& a "oan& in the e.e%er Cuarter

C"apter ' (layer)s (ro*ile

'$# (u-lic Sector Banks @(SBs in India

'$#$# State Bank o* India. $tate an# o *nia ($B*) .a%e into exi&ten.e in 1955 ater the

%erin o three re.een.e an#& na%e"y Ban# o Bo%ay Ban# o Mara& an Ban# o

Bena"- $B* .urrent"y ho"& a %ar#et &hare o 19-1D in *nia- $B* ha& a va&t net/or# in

*nia- *t ha& 142'0 ran.he& an over 22141 A>M& a.ro&& the .ountry &ervin retai"

Page | 1#
http://in.reuters.com/finance/stocks/overview?symbol=RLCP.NShttp://in.reuters.com/finance/stocks/overview?symbol=LART.NShttp://in.reuters.com/finance/stocks/overview?symbol=SRTR.NShttp://businesstoday.intoday.in/story/sbi-working-on-strategy-to-fight-bad-debts/1/203975.htmlhttp://in.reuters.com/finance/stocks/overview?symbol=LART.NShttp://in.reuters.com/finance/stocks/overview?symbol=SRTR.NShttp://businesstoday.intoday.in/story/sbi-working-on-strategy-to-fight-bad-debts/1/203975.htmlhttp://in.reuters.com/finance/stocks/overview?symbol=RLCP.NS


11/21

&e%ent- $B* re.ent inan.ia" eror%an.e an ierentiatin rou.t& are "i&te e"o/ in the

ta"e&-

'$#$' Bank o* BarodaF Ban# o Baroa heaCuartere in +aoara i& an *nian &tateM& in *nia B;B i& ran#e '25 a..orin to ore&- >he tota" revenue o B;B i&

R&- 346 i""ion /ith a net in.o%e o R&- 52-4! i""ion an tota" a&&et& o R&- 4-5'4 tri""ion-

'$#$! (una- /ational Bank.Puna 7ationa" Ban# (P7B) /a& e&ta"i&he in 1!95- *t ha& a

net/or# o 5!'4 ran.he& a.ro&& '04 .itie& in *nia /ith aout 6000 A>M&- *t i& one o the

i our "ayer& a"on /ith $B* Ban# o Baroa *8*8* in *nia- inan.ia" eror%an.e an

rou.t& are %entione in the ta"e e"o/-

2a-le '$# Coparison o* (u-lic Sector Banks in India#!

(u-lic Sector Banks?isted or

1nlisted

+arket

Cap @Rs$

Cr

?atest Financial Indicators

Assets @Rs$

Cr

EBI20A @Rs$

Cr

(A2 @Rs$

Cr

State Bank o* India Ii&te 1!!404-40 2399456-4' 226944-5' 144!9-4'Bank o* Baroda Ii&te 39'51-3 6'6114-10 4601!-04 4931-24

(una- /ational Bank Ii&te 35642-2 5'51'1-33 4966!-43 3534-61

'$' (rivate Sector Banks @(SBs in India

'$'$# =0FC. 8 Ban# i& *niaE& "are&t rivate an# in ter%& o a&&et& an %ar#et

.aita"ization- *t ha& a va&t net/or# o 3251 ran.he& 111'' A>M& in *nia- *t& eCuity

&hare& are "i&te in B$=- 8 ta#en &evera" initiate& a& a art o .ororate &o.ia"

re&on&ii"ity- Aart ro% roviin eo&it& "oan&

'$'$' ICICI BankF *8*8* i& &e.on "are&t an# in *nia ater $B* in ter%& o a&&et &ize an

&e.on "are&t in rivate an#in in ter%& o %ar#et .aita"ization in rivate &e.tor- >he an#

ha& a net/or# o 3!00 ran.he& a"" over *nia an 11162 A>M&- Iaun.he an a LPo.#et&

y *8*8* Ban# on a.e oo# to .arryout inan.ia" tran&a.tion&- Ro""e out the rora%

.a""e My &avin Re/ar& or re/ar& or internet an#in an &hoin on"ine tran&a.tion&-

Iaun.he i,i&h "exi"e re.urrin eo&it or &avin&-

Page | 11


12/21

'$'$! Axis Bank.Axi& Ban# It- i& the thir "are&t an# in *nia in the rivate &e.tor-

eaCuartere in Mu%ai Mahara&htra it& oer& rane ro% Retai" Bu&ine&& to Ari.u"ture

Bu&ine&&e& M$M= et.-- Axi& an# .urrent"y enerate& a revenue o R&- 340 i""ion /ith an

oeratin in.o%e o R&- 94 i""ion an a net in.o%e o R&- 52 i""ion- *t& a"an.e &heet on

2012 a%ounte it& tota" a&&et& to R&- 3-4 tri""ion-

2a-le'$' Coparison o* (rivate Sector Bank per*orance#!

(rivate Sector Banks?isted or

1nlisted

+arket Cap

@Rs$ Cr

?atest Financial Indicators

Assets EBI20A (A2

=0FC Ii&te 204111-00 5036'!-9! 50!52-52 !'64-51

ICICI Ii&te 1''!'!-00 '49'''-16 '9563-!6 116''-12

AIS Ii&te 94!!4-43 3!6393-65 3!502-21 6309-1'

Ban#& oer ierent rou.t& to ierentiate the%&e"ve& a%on the .o%etitive

environ%ent- Aart ro% .o%%on retai" an#in un.tion& ea.h an# trie& to ierentiate

the%&e"ve& y roviin .u&to%er &ervi.e un.tion&-

'$! (ro*ita-ility and revenue per eployee type coparisons *or top ! o* (SBD (rivateD

and Foreign -anks.

Gro&& 7onhere ha& een an in.rea&e in tax exe%tion& on inve&t%ent& /hi.h .an urther oo&t u

un& "o/in throuh in.rea&e &avin&

Soe o* t"e aor sections ipacting Banking Sector particularly Retail @+ass

Banking in India are as *ollowsF

I$ Recapitalio e BA$=I *** .o%"iant P$: an#& /ou" e reCuirin

R& 2-4 tri""ion unin"o/&y the en o year 201! Q15- >hi& i%"ie& that un& nee to e rai&e

throuh the &a"e o &hare& in an#& to retai" inve&tor&-

7A Buet "an& .on&o"iation o P$: Ban#& -u"i"%ent o Priority $e.tor Ienin

(P$I)-*t "an& .reation o ra%e/or#& or "i.en&in o &%a"" an#& an other ierentiate

an#&- A"" the "o.a" area an#& /hi.h a&i.a""y &erve ni.he %ar#et intere&t& "i#e &%a""

u&ine&&e& "o/ in.o%e hou&eho"& ar%er& an unorani&e &e.tor& "i#e &o%e rea" e&tate

u&ine&&e& or retai" &ho&--

>he &e.tor %ay a"&o &ee entry o ne/ an#& in Private Ban#& $e.tor

aRecapitalisation o* (u-lic Sector Banks.

Re.aita"i&ation o Pu"i. $e.tor Ban#& y ine.tin 2-4 "a#h .rore %eet Ba&e" *** nor%& i& to

e one /ithout i"utin u"i. &e.tor .hara.teri&ti.& in the% (Govern%ent &ta#e /ou"

re%ain 51D)- *t /ou" a""o/ u"i. to inve&t ire.t"y in the&e an#&-

Page | 13


14/21

>he rea&on or re.aita"i&ation i& that the an#in &y&te% nee& to e urther &trenthene the

Pu"i. &e.tor an#& are not oin /e""- A..orin to Ba&e" *** ru"e& Mini%u% .aita"

aeCua.y ratio %u&t e 11-5D- 8aita" AeCua.y ratio i& the ratio o a an#J& .aita" to it&

ri- en.e re.aita"i&ation /ou" oo&t the .aita" aeCua.y ratio hen.e .u&hionin the

an#& ro% a "oan&- *t /ou" urther he" an#& to exan an therey in.rea&e the /ho"e

ro.e&& o inan.ia" in."u&ion-

>he Pu"i. $e.tor Ban#& are not eror%in /e"" a&Fo that ee.t the an#& /ou" e er%itte to rai&e "on

ter% un& to "en to inra&tru.ture /ith %ini%u% reu"ation& (&u.h a& exe%tion ro% 8RR

$IR an P$I)- >hi& /ou" he" an#& to &te u .reit-

4$0e-t Recovery +eans.Govern%ent ha& roo&e to &et u &ix et re.overy triuna"& at

8haniarh Bana"ore ehraun =rna#u"u% yeraa an $i"iuriQ15->hi& ha& .o%e u

e.au&e o ri&in nonhe overn%ent ai%& to

rin out "an& to re.over a"" &tre&&e a&&et& a& /e""- *n &u.h an environ%ent a&ter re.overy

o a "oan& /i"" e a &inii.ant re"ie to the an#&-

!$' Current C"allenges *aced -y Retail Banks in India

>he .ha""ene& in."ue the o""o/in #ey oint&F 8urin %i&&he an#& even "a.# the a&i.

inor%ation on ho/ %any .u&to%er& they have an ho/ %any rou.t& they have /hat a&e

o .u&to%er& it ha& .overe- >he ata on revenue& an roit& ro% the &e%ent& are not

avai"a"e /ith any &ort o ranu"arity- :ner the .ir.u%&tan.e& the an#& /ou" in it very

ii.u"t to %a#e their ri.in ri


16/21

III Addressing vulnera-ilities to inade>uacies in t"e syste. >he an#& /ou" a"&o nee

to re.onize an %anae ri& ari&in ro% %i&&here are "are

nu%er& o e"ivery .hanne"& over /hi.h retai" an#in ta#e& "a.e hen.e there are %any

inaeCua.ie& in or% o te.hno"oi.a" inaeCua.y &o%e ra/a.#& in interna" uie"ine& or

nonhe u&e o iita"


17/21

a.tor&- e"oy%ent o &.orin %oe" .an he" retai" an#& et a air #no/"ee aout their

.u&to%er&E a&e-Hua"ity o &ervi.e& oere y the an#& i& oin to another #ey ierentiator- Proviin

etter &ervi.e to the .u&to%er& /ou" e the #ey to eneratin "arer revenue or the an#&-

!$&F0I in Retail Banking Sector.

A..orin to re.ent ne/& areate orein inve&t%ent in *nia /hi.h in."ue& * ** an

7R* .annot ex.ee '4D "i%it in .a&e o rivate an#& an 20D in .a&e o nationa"i&e an#&

"i#e $tate Ban# o *nia an it& a&&o.iate an#&- =ven an#er& an an#& &ta :nion& have

not one aain&t thi& e.i&ion-

* *n"o/&F

Fiscal'77;


18/21

inan.e Mini&try %iht &tart y %erin $B*J& ive &u&iiarie& < $tate Ban# o yeraa

$tate Ban# o My&ore $tate Ban# o Bi#aner @aiur $tate Ban# o Patia"a an $tate Ban#

o >ravan.ore < into the arent- 8on&o"iation ha& %et /ith oo&ition ro% an# e%"oyee&

an union&- ierent te.hno"oy "ator%& are u&e y an#& an /ou" have to e #et in

%in /hi"e %erin t/o an#&

>he o.u& i& ."ear"y on the "are "ayer& &u.h a& $tate Ban# o *nia Puna 7ationa"

Ban#Bank of Ba$oda Ban# o *niaCana$a Bank 8entra" Ban#I%BI Bankan :nion

Ban#- *8* an *nian Ban#&J A&&o.iation have a"&o een in."ue-

!$9an 0"an 3ona and Financial Inclusion.

8on.et o inan.ia" *n."u&ion i%"ie& that ea.h an every .itizen o *nia &hou" et the

an#in a.i"itie&- =very hou&eho" &hou" have a an#in a..ount-

Pri%e Mini&ter 7arenra Moi "aun.he& @an han ona a inan.ia" in."u&ion "an or

.rore& o eo"e uner /hi.h an# a..ount& an RuPay eit .ar& /i"" e rovie ->he

Prahan Mantri @an han ona ha& een vi&ua"ize a& the &.he%e .overin a"" hou&eho"& in

the .ountry /ith an#in a.i"itie&-

>he &a"ient eature& o Prahan Mantri @an han ona are a& o""o/&F

T R& 5000 overrat a.i"ity or Aahar< "in#e a..ount&

T RuPay eit .ar /ith in&uran.e .over o 1 "a#h

T Mini%u% %onth"y re%uneration o R&5000 to u&ine&& .orre&onent& roviin

"in#ae et/een a..ount ho"er& an the an#-

ir&t ha&e o thi& %i&&ion /i"" &tart in Auu&t thi& year an en Auu&t next year-

$e.on ha&e &tart& in 2015 .overin other a&e.t& &u.h a& %i.ro in&uran.e an en&ion

&.he%e L$/a/"a%an

>he exi&tin an#in net/or# ha& to e eare u or oenin an# a..ount& o the

un.overe hou&eho"& in oth rura" an uran area& the an#in &e.tor /ou" e exanin

it&e" to &et u an aitiona" 50000 Bu&ine&& .orre&onent& %ore than '000 ran.he& an

%ore than 20000 ne/ A>M& in the ir&t ha&e-

>he nu%er o ree /ithra/a"& every %onth or thir arty A>M& /i"" no/ e reu.e ro%5 to 2 /here a& the RB* "everae the .ut or rura" A>M& a& o no/- At re&ent the &ur.hare

Page | 18
http://economictimes.indiatimes.com/bank-of-baroda/stocks/companyid-12040.cmshttp://economictimes.indiatimes.com/canara-bank/stocks/companyid-9218.cmshttp://economictimes.indiatimes.com/idbi-bank-ltd/stocks/companyid-11689.cmshttp://economictimes.indiatimes.com/bank-of-baroda/stocks/companyid-12040.cmshttp://economictimes.indiatimes.com/canara-bank/stocks/companyid-9218.cmshttp://economictimes.indiatimes.com/idbi-bank-ltd/stocks/companyid-11689.cms


19/21

i& R&- 15 /hi.h the an#& /ant to e in.rea&e- >hi& ee %ay e exe.te to ro/ y aroun

10D /hi.h /ou" he" in e"oy%ent o %ore %a.hine&- >he nu%er o A>M& ha& een

ou"e over the "a&t three year&-

Ban#& have een aruin that ree a..e&& i& ein %i&u&e y a..ount ho"er& /hi.h i&

.reatin "o&&e& or the .arM e"oyer&

are aruin that they have een a.in an in.rea&e in .hare& ue to the ne/ o"i.ie& an

reor%& o RB* on ne/ &e.urity eature&-

!$8Copetition *ro Foreign Banks in retail -anking.

A& o @anuary 2014 /e have 43 orein an#& havin ran.he& in *nia an 45 havin

rere&entative oi.e& in *nia- orein an#& have "e&& than 1D tota" ran.h net/or# ut 'D

o the tota" an#in &e.tor a&&et& an 11D o roit&1(a& er a& the ataa&e on *nian

=.ono%y roi"e o an#& 2012hey are re"u.tant to rovie &ervi.e& to oor an

.ater to on"y "u.rative ri.h an a"uent ."ient&- orein an#& /or# in 3 Uni.heE %ar#et& in

*nia na%e"y u


20/21

roita"e u&ine&&- >he rea&on or orein an#& not eror%in /e"" in retai" an#in i& that

it i& %ore .ha""enin or the% to .o%ete /ith other eorahie& an &hort ter% revenue

oortunitie&- >he ii.u"ty a"&o "ie& in a.hievin %eaninu" &.a"e orani.a""y an

inorani.a""y- A& a re&u"t o%e&ti. an#& are o&itione etter to attra.t "o/ .o&t eo&it&

ivin the% an ee over the orein an#& in retai"-

Re*erences.

ataa&e on *nian =.ono%y Proi"e o Ban#& RB*

httF??///-/.-in?a&&et&?&?u"i.ation&?2013?oreinhe *nian an#in &e.torF re.ent eve"o%ent& ro/th an ro&e.t& @anuary 2013N

httF??///-ie-or?o/n"oa?Ban#in


21/21

13inan.ia" &tate%ent& o Pu"i. an rivate &e.tor an#& 8aita"ine ata Ba&e

httF??.aita"ine-.o%?

14Per&ona" Ban#in rou.t& o ierent an#& Ban#& oi.ia" er&ona" an#in on

f 08 retail banking (1)

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