F201-P&P of Banking : Retail Banking,

Wholesale / International Banking Session 4 /

5/6

Prof Chowdari Prasad

Email id: chowdari.prasad@ifimbschool.com

PGDM 2016-18 : Term I

Level 1 Course (3 Credits)

10/31/16

PnPB2 - Reserve Bank of India

Types of Bank Branches

Agricultural Finance Branches
Commercial & Institutional Banking Branches
Housing Finance Branches
Industrial Finance Branches
Mid-Corporate Accounts Branches
NRI Branches
Overseas Branches
Personal Banking Branches
Service Branches
SME Branches
Treasury (Govt Accounts) Branches
University Campus, Village Branches etc
Retail n Wholesale Banking

Types of Bank Customers

Agriculturists / Rural Artisans
Individuals / Minors / Non-Resident Indians / Senior Citizens
Sole Proprietors / Small Business Firms
Professionals / Engineers/ Lawyers / Doctors / CAs/ Architects / Consultants
Partnership Firms / Commission Agents / Brokers
Clubs / Associations / Societies / Trusts
Private / Public Limited Companies
MSME / Entrepreneurs
Export-Import Firms
Public Sector Enterprises
Multi-National Companies
Retail n Wholesale Banking

Retail n Wholesale Banking

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, PMS, Collections, Debit/Credit Cards,
etc
Guarantees, Letters of Credit, Deferred Payment Guarantees, etc

INVESTMENTS
Retail n Wholesale Banking

Retail n Wholesale Banking

Retail / Personal / Consumer

Banking

Retail n Wholesale Banking

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Drivers of Retail Business 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 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
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Retail Banking : Deposits

Demand and Time Deposits : SB,CA,RD,FD
Competitors?

Retail Banking - 3

Investment in Shares
Company Deposits
FD Schemes of NBFCs
Small Savings SB, RD of Post Offices
PPF, NSC, KVP, IVP, etc
Deposit Schemes of SIDBI, NABARD, etc
Chit Fund Schemes
Mutual Funds, Units, Insurance premia / savings
.

Jan 31, 2006

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Retail Lending
Gold Loans Valuation
Overdrafts Clean or Secured
Fixed Deposits Self or others
Recurring Deposits Self or others
Shares, Bonds, Debentures, Units, etc
Title deeds of Fixed Assets
LIC policies Surrender Value
Housing Finance
Others .
Retail Banking - 3

Jan 31, 2006

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Gold Loans
By way of Overdrafts or Demand Loans
Only on proper introduction
To bonafide owners for personal, business
Photographs of the borrowers
Only against Ornaments without monograms
or initials raising doubts about ownership
After verifying the purity of gold 24 ct
Touch Stone, Specific Gravity or Acid Test
Deduct weight of stones, diamonds, pearls, etc
Docs, Rate of Intt, partial delivery, Recovery,
etc.
Retail Banking - 3

Jan 31, 2006

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Overdrafts
Temporary facility to tide over urgent need
Allowed in Current or Cash Credit Account
To individuals salaried or professionals etc
Clean (unsecured) or Secured
Against Title Deeds, FDs, Bonds, etc

Higher rate of interest

Duration linked to maturity of FDs etc
Margin to be maintained
Documents, Attachments, Opinion Reports

Retail Banking - 3

Jan 31, 2006

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Housing Finance
What is Housing Finance ?

Retail Banking - 3

For
For
For
For
For
For
For
For

construction of a House / Flat

purchase of a ready house / flat
extension of existing house / flat
repairs, renovation of a house / flat
House Furnishing / Insurance ?
a Shopping Complex
a Co-operative Housing Society
meeting other expenses Home Equity

Jan 31, 2006

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Why HF by Banks?
Conform to National Infrastructure Policy,
Habitat and Housing Policy, etc
Permitted line of developmental lending
activity
A modern retail banking instrument
Backed by tangible asset
Sentimental borrowers; Assured repayments
Easy to recover dues thro legal methods low
NPAs
Refinance available from NHB and RBI /
NABARD
Retail Banking - 3
Jan 31, 2006
Treated part of Priority Sector Lending (40%)

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Why individuals avail HF?

Roti, Kapda aur Makaan ! Build a shelter !!
A real saving for any class individual
An asset always likely to appreciate
Compare with several other savings
Easy to acquire, repay and transfer
A good tax savings facility
A decent line of business in modern days

Retail Banking - 3

Jan 31, 2006

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Y-o-Y Growth rates between

2008 and 2016

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Wholesale / Corporate Banking

Products
Fund-based Services:
Term Lending / Short Term Finance / Working Capital / Bill
Discounting etc

Non-Fund based Services:

Bank Guarantees / Letters of Credit / Collection of Bills and
Documents

Value-added Services:
CMS / Channel Financing / Vendor Financing / RTGS / Corp
Salary accounts / Syndication / Forex / Money Market Desk /
Derivatives / Trusts / IPOs / Taxn

Internet Banking Services:

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Export Letter of
Credit Cycle
5. Product
is Shipped

1.
Beneficiary
Exporter/Seller

4.
6.

Documents

1.
Buyer & Seller Agree

2.
Application

Letter of
Credit

8.

Applicant
Importer/Buyer

2.

Documents

10.
3. Letter of Credit
7. Documents
Exporters Bank/
Advising Bank

9.

Importers Bank/
Issuing Bank

sujit patel

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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
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Facilities to Importers
Import Collection Bill Services
Direct Import Bills
Advance Payment towards Imports
Import Letters of Credit
Arranging for Buyers and Suppliers Credit
Bank Guarantees

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Remittance Services
1. EEFC Account : Exchange Earners Foreign Currency
account
2. Foreign Inward Remittances Services
3. Payment Services to Abroad (Outward Remittances)

Retail n Wholesale Banking

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Universal Banking
Offering all types of financial products and services like banking,
insurance, mutual funds, capital markets related products
including share broking, commodity broking, investment type
products like sale of gold / bullion, government / corporate
bonds, providing advisory services and Merchant Banking
Activities.. All at one place!
Banking products include deposits and advances
Insurance products include life and non-life insurance
Can be carried out by government, private and public institutions
Cross Selling to a large number of clientele under a single roof!
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Universal Banking in India

Changes in BR Act in 2000 AD for banks offering
insurance products
Banks partnering with domestic or foreign companies
for insurance
Marketing of Mutual Funds through Bank Branches thro
tie-ups
Reverse Merger of ICICI with ICICI Bank; IDBI with IDBI
Bank
Banks commenced financing Infrastructure projects
SIDBI and NABARD enter direct lending; and cofinancing with banks
Distinction between Commercial Banks and DFIs
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disappeared;