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NCRDS STERLING INSTITUTE OF MANAGEMENT STUDIES

RETAIL BANKING SYSTEM IN INDIA


PRESENTED BY:

VARSHA GOLEKAR
MMS-II (FINANCE)
A-18

Overview Of Bank Performance


In Last Five Years

RETAIL BANKING SYSTEM


Retail Banking in Retail Stores Way
AS IS / BEFORE

TO BE /NOW

PRIORITY

Credit & Risk

Customers & retailing

APPROACH

Secure & conventional

Customer centric retail

location for financial

banking

transactions

(Customer is King)

(Banks dictate terms)


CUSTOMER BASE

Corporation & other banks

Retail consumers,
corporate clients, other
banks

FORMATS

Single Entity

Multi-location, multi
branch

MORE EMPHASIS

Improving transactional

Providing service and

ON

efficiency

value to consumers

CUSTOMIZATION

Rarely there

Highly customized

PATH FORWARD FOR RETAIL BANKS


RETAIL BANK OF TODAY COMPLEX BANK

RETAIL BANK OF FUTURE LEAN BANK

LEADERS

P
D

Product
leader

Distributor

Utility
Processor

LAGGARDS

P
D

Retail banks needs


to identify their
focus area and build
capability in one or
two only.

Retail banks,
continuing to
pursue a doing
everything
approach will not
be able to build
strong capability in
all models.

Retail Banking
Product
Portfolio

Deposit

Fixed deposit
Saving account
Current Account

Loans & Advances

Housing Loan (Sadasavli


Housing Loan)
Personal Loan

Services

Credit card
Debit card

Recurring Account

Vehicle Loan (AutoFinance Loan)

Net bankingMobile
banking

NRI Account

Education Loan

Phone banking

Corporate Salary
Account

Professional Loan

Demat Account
Minor Account
Senior Citizenship
Account

ATM

Loan against share


And securities
Swayam siddha loan
Kalpataru Consumer
finance
Travel Now

Smart card
24*7 cheque issuance
facility

MULTI-STATE SCHEDULED CO-OPERATIVE BANK


INCORPORATION: 1972
BRANCHES: 64
PROJECT PLACE: CENTRALIZED RETAIL BANKING CELL (CRBC) , NAUPADA.

Techno-savvy Bank
Multiple delivery channels such as ATM, Internet, Mobile
First Bank in Co-operative sector to install Cheque Depository Machines and Automated
Cheque Issuance Machine at 63 branches, which are operational 24 X 7
Bancassurance: Agent for Max New York Life Insurance Co. Ltd. for Life Insurance products
and with The Oriental Insurance Co. Ltd. for General Insurance

PROCESSING OF RETAIL LOANS


Processing
Model
Stand Alone
Model

Refers to processing of retail loans


independently at the branch level.
Branch will market the retail loans and
process and sanction the loans based
on the eligibility of the applicants.

Centralised
Model

Refers to processing of loans at


a centralised place depending
upon the geography of
branches.

WORKFLOW OF CENTRALIZED RETAIL BANKING CELL, TJSB

Process the application

Verification check and


arrive at credit score

The valuation
(wherever applicable)
through the panel
valuer

Receiving acceptance
for the terms and
conditions

Advising the sanction of


the loan to the
borrower/branch with
the terms and
conditions

Arrive at the quantum


of finance based on
type of loan

Obtain the
Encumbrance Certificate
and legal opinion from
lawyer

Execution of documents
for the loan and also
completing the
mortgage formalities
(wherever applicable)

Release of the loan to


the borrower

Verification of end use


by the borrower

Auditing is done by
auditors on weekly
basis sometime daily
basis.

Receipt of application
and details from the
branch

IMPORTANT THINGS YOU NEED TO KNOW BEFORE APPLYING FOR


LOAN
You may not be offered the rate you see advertised
A secured loan is held against your property
Disbursement time of bank
The best rates are available to those with the best credit
scores

The longer the term, the more interest you'll pay


A credit card may be a better option for short term lending

It can cost you to pay back the loan early


There may be other hidden fees
Service , processing charges, private equity, franking
charges, insurance charges
Your repayments may be variable Fixed or Floating
You don't have to buy PPI when you take out a loan

GENERAL DOCUMENTS REQUIRED FOR LOAN APPRAISAL PROCESS

GENERAL DOCUMENTS

1. Promissory note
2. Term loan agreement
3. Deed of guarantee
4. Section 60 Borrower,
Guarantor
5.Letter of Lien and set off
6. Post dated cheques

Housing
loan
1. Society NOC
2. Sale deed
3. Title Deed
4. Valuation Report
5. Credit Report
6. Non encumbrance
certificate
7. Mortgage deed
Other supporting
documents

Personal
Loan

1. End use
declairation
Supporting
Doucuments

Education
Loan

1. Institute fees
structure
2. Fee receipt
3.Educational
Certificates
Other supporting
document

RETAIL BANKING RISK


Losing Money
Wrong Strategy

Processing Failures
& Frauds
Regulatory Compliance

Customer Fall to
Pay

BUSINESS
RISK

CREDIT
RISK

OPERATING
RISK

MARKET
RISK

Change in
Market Price

RECOVERY OF LOAN

Recovery Policy clauses - Approaches to


recovery of loan, general guidelines

Giving notice to Borrowers- Written


communication, telephonic reminders or
visits by TJSB bank recovery agent

Repossession of security- To recover dues


and not to deprive the borrower, realisation
of security after notice to borrower
Valuation and Sale of property- Sale of
repossessed property by TJSB bank opportunity for borrower to repurchase the
property

DATA ANALYSIS AND INTERPRETATION


OF
TJSB SAHAKARI BANK LTD.

Outcome Here
TJSBs deposits has increased by 25.16% shows opportunities for further growth.
Advances has increased by 32.55% in 2012,
shows retail segment growth
Gross NPA has decreased and CRAR has also
decreased by 0.61%. It also reflects the
efficacy of banks credit risk management and
the recovery environment.
% Increase/Decrease
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
-5.00%
% Increase/Decrease

Deposits

Advances

Net Profit

25.16%

32.55%

21.20%

Gross
N.P.A
-0.79%

C.R.A.R
-0.61%