Mrs. Soundara Kumar GM Personal Banking State Bank of India

189K 20042004-05  Market has transformed into a ¶buyer·s market· from a ¶seller·s market·  Comprises of multiple products. 42% of credit growth came from 2004-05.Present Scenario Indian retail banking has been showing phenomenal growth  In 2004-05.189K Crore in Rs. channels of distribution and multiple customer groups  . 42% retail  Over the last 5 years CAGR has been over 35% 35%  Retail credit levelcrossed Rs.

Thailand 24% 24% Taiwan 52% 52% Indian population below 35 yrs of Age ² 70 % Reach of Formal Banking Channels ² 20-25% 20-25% of Indian population Source: Cygnus Industry Insight Source: .Economy vs. Retail Banking  Retail assets are just 22% of the total banking 22% assets of India Contribution of retail loans to GDP: GDP: India 6% China 15 %.

2005 Consumer Durables 7% Auto 28% Home 49% Other personal Loans 16% .Market Share: Retail Loan .

Drivers Of Retail Growth CHANGING CONSUMER DEMOGRAPHICS          Growing disposable incomes Youngest population in the world Increasing literacy levels Higher adaptability to technology Growing consumerism Fiscal incentives for home loans Changing mindsets-willingness to borrow/lend mindsetsDesire to improve lifestyles Banks vying for higher market share .

´Any timeµ Banking  Improved processes/Bundled product offerings  Faster service/Reduced TATs  Customer specific products/offerings on a regular basis  ¶Bank· customer has replaced ¶Branch· customer  Focus on understanding customer needs/ preferences  Segmentation/Differentiation of customers  Customer driven strategies  Building relationships  .Industry·s response to the change ´Any whereµ.

Future Of Retail Banking  The accelerated retail growth has been on a historically low base Penetration continues to be significantly low compared to global bench marks Share of retail credit expected to grow from 22% to 36% 22% 36% Retail credit expected to grow to Rs. at an annual growth rate of 25% 25% Source: Cygnus industry insight Source:    .575.000 crs by 2010 Rs.575.

Future of Retail Banking  Contd«. followed by Auto loans Banks need to expand and diversify by focussing on non urban segment as well as varied income and demographic groups Rural areas offer tremendous potential too which needs to be exploited    . Dramatic changes expected in the credit portfolio of Banks in the next 5 years Housing will continue to be the biggest growth segment.

     Performance oriented leadership Sophisticated marketing and sales Efficient distribution channels Process efficiency and ease of scalability Superior credit policy. procedures and skills Source: Mckinsey Source: .Strategic prerequisites«.

Challenges  Sustaining Customer loyalty NPA reduction & Fraud prevention Avoiding Debt Trap for customers Bringing Rural masses into mainstream banking    .

.Strategies for Future«       Reaching to masses : Need to customize Customer segmentation/differentiation Data mining/CRM based campaigns Products per customer/loyalty Promoting low risk retail lending products Offer an array of products and financial advisory. advisory.

Strategies for Future« Contd.   Cost effective expansion Renewed emphasis on superior execution by frontfront-line employees Grow through Alliances: Alliances: Hospitality Retailers Education Automobiles  Consumer Durables Housing/Construction .

Y.Chin. OCBC Bank .Winning Strategy The bank that best addresses and anticipates customers needs. delivers consistently higher quality service and connects to the customer via their channel of choice wins Y.

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