Retail Banking

Features of Retail Banking

Personal Loan ( Education, Car, Home, White Good, Credit Card, travel etc) Treasury Operations Facilitated by IT (ATMs, Phone Banking , Net Banking , Demat Accounts)

Reasons for Retail Banking

Industrial Recession Economic Downturn Industrial Sickness Mounting NPAs with Corporates Failure of many big companies Risky Lending to Corporates Reduction in SLR/CRR Poor Credit Demand Due to Recession

Challenges Created

To set up & invest heavily in new credit delivery or distribution channels Economize Transaction Cost Increase Sales, Productivity & offer Greater Convenience in Service Provision Creating Off-site Delivery channels to help new product development

RBI Guidelines

Understand customer Transaction Behavior & their underlying attitude Use Sophisticated experimental customer Research to assess economic Impact of Tactics designed to Change the Behavior Develop an Integral Channel Migration Plan Which Blends Economic & Non Economic Incentives to Ensure That Right Initiatives Are Targeted At The Right Customers Protect Sales Effectiveness by Utilizing The Non Branch Channels Design Non Branch Channels To Emphasize Personalized Interaction To Counteract Decreased Loyalty Among Remote Customers

Features of Banking

Risk exposure Bank's Foreign Business Banks as Authorized Dealers Deposit Insurance & Credit Gaurantee Corporation Capital Base (Capital to Risk Weighted Assets Ratio) Customer Service Lead Banking, Service Area Approach & Action Plans Micro Finance

Banking Innovation

Participation Certificates & Inter Bank Participation Consortium Approach Credit Cards New Technology Stock Invest Local Area Banks Other Diversification Asset Liability Management