SIBM, Manipal Induction Program for Marketing Officers January 17-22, 2011

Retail Banking & Corporate Banking Strategies – 22nd January 2011 Prof Chowdari Prasad, TAPMI, Manipal

RBI : T n P of Banking in India ’10
Item

(Rs in March 2009

Crores) March
2010

% % Variation Variation in 2008- in 2009-10 09

Housing Loans Consumer Durable Loans Credit Card Receivables Auto Loans Other Personal Loans Total Retail Loans % Share of Retail
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2,63,23 3,15,86 5 2 5,431 3,032 29,941 21,565 83,915 78,346 2,11,29 2,03,94 4 7 5,93,81 6,22,75 6 2 (21.3)
SIBM Manipal

4.1 13.1 9.1 -4.6 6.9 4.0

20.0 -44.2 -28.0 -6.6 -3.5 4.9
2

(19.0)

Banking Today
• • • • • • • • • • • • • Agricultural Banking Branch Banking Business Banking Cooperative Banking Convenience Banking Core Banking Solutions Corporate Banking Developmental Banking E-Banking Green Banking Innovative Banking International Banking Internet Banking

• • • • • • • • • • • • •

Investment Banking Islamic Banking Knowledge Banking Mobile Banking Narrow Banking Overseas Banking Personal Banking Priority Banking Retail Banking Relationship Banking Rural Banking Universal Banking Virtual Banking

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Focus aspects of Commercial Banking
BANK’S BUSINESS
MIS & Intranet

LOANS & MISC. SERVICES

Core Banking (CBS) Electronic Banking Any Branch Banking

ATMs
POS Terminals and Cash dispenser

Corporate Network

Card Management Document Management Resource Management

GN SI AR I

CRM

Risk Management

BANK’S BUSINESS
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4

Market / Customer Segmentation • Agriculturalists / Rural Customers
• Personal Banking / Retail Banking Customers : High Net-worth Individuals • Commercial & Institutional / Corporate Banking • Micro, Small & Medium Scale Enterprises • NRI / International Banking customers • Government Departments – State & Central • Others

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Retail Banking
• • • • • • Savings Accounts Current accounts Fixed Deposits Recurring Deposits Demat Accounts Any time, Anywhere Bkg • SMS Banking • Phone Banking • ATM Banking
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• Home Loans • Personal Loans • Loans against Shares • Gold Loans • Car /Vehicle Loans • Educational Loans • Credit / Debit Card • Mutual Funds • Insurance
6

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Other retail products…
Consumer Durable Loan Desh Videsh Yatra loan Personal Computers Ln Loans to Defence Personnel Professional Loan Loans to Pensioners (Reverse Mortgages) • Traders Loans • • • • • •

• Loans for Subscription to Public Issues / IPO • Home Improvement Loans • Loans against Rent Receivables • Festival Loan • Mixie Deposit Scheme (Bank of Maharashtra0

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Meaning of Retail Banking ?
• The term ‘Retail Banking’ refers to a host of financial products such as retail deposit schemes, retail loans, credit cards, debit cards, insurance products, mutual funds, depository services including demat facilities and a host of other services offered by Banks and Financial Institutions, catering to the needs of the individual customers in an integrated manner. (Dr T S Padmanabhan - BF - October 2004)

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Reasons for growth of Retail Banking in 1. Introduction of Technology India
2. 3. 4. 5. 6. 7.

Increased competition among Banks Opening of New Generation of Private Banks Inviting of more Foreign Banks after WTO Focus on Productivity and Profitability Deregulation of Interest Rates Absence of Directed Lending

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Reasons for Retail Banking ……
8.Drive to bring down Non Performing Assets 9.Tilt towards consumer and life style spending 10.Innovation of new products and services 11.Implementation of Pru-Norms, ALM and RM 12.Closure / Re-locating of Loss-making branches 13.VRS of surplus staff – and Sales orientation 14.Corporates sourcing funds from non-Banking

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15. 16. 17. 18. 19. 20. 21.

Reasons for Retail Banking ……
Revival of Mutual Fund Market Revitalising of Stock Market Increase in Life Expectancy o/a health care Increasing contribution to GDP from Services Change in Govt policy of FDI in Banking Thrust on Infrastructure Development by GOI Opening up of Insurance Sector

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Influencing Factors
MARKET SEGMENTA TION
TRAINED EMPLOYEES

RETAIL BANKING

CUSTOMER FOCUS

TECHNOLOGY

PRODUCT INNOVATION

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Factors for investment
• • • • • • • • Availability of Funds Rate of Return, Yield Degree of Risk and Cover Level of Inflation Capital Appreciation Liquidity and Marketability Tax Advantages Frequency of Return
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• • • • • • •

Agents of LIC, GIC, etc Chartered Accountants Investment Advisors Post Office Agents Share Brokers Franchisees, Direct Selling Agents, etc Personal Financial Advisors

Facilitators for Personal Finance

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Investor Guidance
• • • • • • Banks and their Personal Banking Cells RBI and SEBI Notifications Advertisements of MFs and Insurance Cos., (Bangalore) Stock Exchange Monthly meets (Bombay) Stock Exch Investor Service Cell NSE “Know your Facts” in Hindustan Times (Ref : Ads on Jan 13, 14, 16 and 17, 2003)

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Types of Savings Instruments
• • • • • • • • SB, RD, FD, Foreign Cy Domestic a/cs Insurance Policies – Life, Non-Life, Mediclaim NSC, PPF, EPF, CPF, PLI, etc Gold, Silver, Jewellery, etc Land, Building, Flat, Real Estate, etc Shares, Debentures, Flexi Bonds, etc Company Deposits, FCD, PCDs, NCDs, etc Chit Funds, Plantation Schemes, Resorts, etc

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Corporates
Sole Proprietors / Individuals in Business Partnership Firms / Limited Liability Partnership Private Limited Companies Public Limited / Limited Liability Companies Government Corporations Trusts, Cooperative Societies, Clubs, Associations • Others….. • • • • • •

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Corporate Banking
• • • • • • • • • Project Finance Film Finance Infrastructure Finance Working Capital Finance Corporate Finance Trade Finance Bill Finance Hire Purchase, Leasing, etc Issue of Guarantees / Letters of Credit : Non Fund based
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Any Questions please?

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Thanks for your attention!
• • • • • • • • My contact details:Prof Chowdari Prasad Professor & Dean (Plg & Dev) TAPMI, Manipal Email: chowdarip@tapmi.edu.in or gmail.com; Telephone: 0820-2701045 (Direct) or 2701000 Mobiles: 9242124642 or 9482549472 Search : google.com; scribd.com; or my blog!

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