Banking and Financial Services:

Term III:
Banking Products and Services
PGDM 2018-20
Dr Nitin Balwani
 Products & Services of a Bank – thro’
segmentation : Personal / Corporate / SME / NRI
/ International / Agricultural customers :
Individual & Institutional
• DEPOSITS
– Current Accounts & Savings Accounts (CASA)
– Recurring Deposits / Fixed or Term Deposits/ Others
• ADVANCES
– Car Loan, Educational Loan, Consumer, Personal, Housing and Gold Loans
– Cash Credit, Demand Loans, Term Loans, Bridge Loan, Overdrafts, etc
• OTHER SERVICES
– Safe Deposit Lockers, Safe Custody, Collections, Debit/Credit Cards, etc
– Guarantees, Letters of Credit, Deferred Payment Guarantees, etc
• INVESTMENTS
– Wealth Management, Advisory Services, PMS, etc.

Retail n Wholesale Banking 2

Types of Banking

Retail n Wholesale Banking 3

Retail Banking

Retail n Wholesale Banking 4

 Drivers of Retail Banking in India
1. Economic Prosperity and increasing purchasing power
2. Changing Consumer demographics and consumption styles
3. Convenience Banking thro IT – Debit/Credit Cards, Online
facility, mobile banking, ATMs, ECS, RTGS, EFT, Demat, PMS,
etc
4. Reducing Rates of Interest on Loans, EMI facility, etc
5. Decreasing delinquency in personal loans whether or not
backed by collatorals, viz., housing loans
6. Liberalisation of economy and adoption of international
practices
7. Longevity of life expectancy
8. Credit Information Bureau (India) Limited – CIBIL Reports

Retail n Wholesale Banking 5

Wholesale Banking

Retail n Wholesale Banking 6

 Wholesale vs. Retail Banking
• Small number of customers
• Narrow client base
• Large value transactions
• Large number of
transactions
• Inter-bank transactions
• Larger sum of money
• Inter-bank markets
• Funds for business
undertakings
• Low cost of processing
• Bank has Lower spreads
• Mobilitation of deposits for
individuals
• Lending to small business
and retail local markets
• Large volume and low value
transactions
• Liabilities are mostly related
to various types of deposits
accounts
• Loan portfolio is dominated
by the consumer loans
• High processing cost
• Higher interest spread
 Wholesale vs. Retail Banking
• High level of customer
relationship
• Concept of a personal
banker
• Close attention and quick
service to customers
• Each customer has unique
requirements
• Custom solutions and total
service approach
• Moderate level of customer
relationships
• Range of options with high
technology component
• Value differentiation comes
from customer service
• Dedicated, highly
professional employees at
junior and middle
management level value
differentiation
• Product needs to be well
defined, easily serviceable
and potentially profitable.
Wholesale vs Retail Credit Growth

Retail n Wholesale Banking 9

 Wells Fargo Wholesale Offerings

3/8/2019 10
 HDFC Bank Offerings

3/8/2019 11
 HDFC Bank Retail Product Mix

3/8/2019 12
 HDFC Bank Wholesale Product Mix

3/8/2019 13
 HDFC Bank Treasury Product Mix

3/8/2019 14
 HDFC Bank Rural Product Mix

3/8/2019 15
Retail n Wholesale Banking 16
International/ Foreign Banking

Retail n Wholesale Banking 17

International/ Foreign Banking
Export Letter of
Credit Cycle

5. Product
is Shipped

1. 1.

Beneficiary Buyer & Seller Agree 2. Applicant

Exporter/Seller 4. Application Importer/Buyer
Letter of
6. Credit 2.
Document 8.
s Documents

10.
3. Letter of
Credit
7.
Documents

Exporter’s Bank/ Importer’s Bank/

Advising Bank 9. Issuing Bank
EXIM Bank Products

19
 International Banking : Exporters

• Export Packing Credit

• Export Bill Negotiation
• Export Bill Purchase and Discounting
• Export Bill Collection
• Bank Guarantees
• Rupee Advances against Export Bills
• Export LC Advising
• Export LC Confirmation
• Suppliers Credit

20
 Facilities to Importers

• Import Collection Bill Services

• Direct Import Bills
• Advance Payment towards Imports
• Import Letters of Credit
• Arranging for Buyer’s and Supplier’s Credit
• Bank Guarantees

21