Govind Gurnani, Former AGM, Reserve

Bank Of India

Di erent Types Of Banking In Indian Economy

Banks are nancial intermediaries that operates

between a saver who deposits money in a bank
and a borrower who receives a loan from that
bank.

1⃣ Retail banking is banking that provides

nancial services to individual consumers rather
than businesses. Personal Loans, Home Loans,
Auto Loans, etc., are widely availed retail
banking products.

2⃣ Wholesale banking refers to the services

provided by banks to large entities like
government sector agencies, nancial
institutions, large corporations, real estate
developers, investors. Services that included in
wholesale banking are large trade transactions,
working capital, - underwriting, mergers and
acquisition- currency conversion, eet and
equipment leasing, loan participation, merchant
banking, and trust services.
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 3⃣ Contextual banking refers to personalisation
of nancial products & services based on the
context in which they are being used. In short,
contextual banking experience involves doing all
the work necessary to deliver tangible value in
real time. Essentially, contextual banking aims to
o er the right product to the right customer
through the right channel at the right time.

4⃣ Open banking is a banking practice that

provides third-party nancial service providers
open access to consumer banking, transaction,
and other nancial data from banks and non-
bank nancial institutions through the use of
application programming interfaces.Open
banking is opening up three major parts of the
nancial ecosystem: account data, product data
and payment initiation.

5⃣ Relationship banking is when a bank o ers

a large portfolio of products & personalised
services to loyal customers who maintain several
accounts. Banks that practice relationship
banking take a consultative approach with
customers, getting to know their particular
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 situation and needs, and adapting to changes in
their nancial or business lives.

6⃣ Shadow banking refers to the system of

credit intermediation that involves entities and
activities outside the regular banking system.
Examples : NBFCs, hedge funds, private equity
funds, mortgage lenders, and even large
investment banks.

7⃣ Lazy banking refers to the phenomenon of

circulating money within the banking system
itself — stemming from an extreme aversion
among banks to lend money. India's commercial
banks readily borrow from the central bank at
the policy repo rate but, then, lend that money
out at a high rate, in what RBI describes as a
culture of "lazy banking”.

8⃣ Embedded banking is the process of

integrating nancial solutions with a business’
platform or app through the use of APIs. It works
as an umbrella term, encompassing di erent
types of nancial services, including payments,
lending, wearables, contactless payments, card
issuing, vIBANs, and bank transfers.
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 9⃣ Internet banking is a facility o ered by
banks & nancial institutions that allow
customers to use banking services over the
internet viz NEFT, RTGS, IMPS.

🔟 Mobile banking is the act of making nancial

transactions on a mobile device (viz. cell phone,
tablet). To use mobile banking, customers must
rst download the bank’s mobile app from an
authorised app store and create a user
pro le.Customers can use mobile banking to
view their account balance, make instant fund
transfer and pay bills, etc.

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