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    Retail Banking

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    jyotinegi12
    Retail banking involves providing banking services to individuals for personal needs. It consists of high volumes of low-value transactions like deposits, payments, and credit services. Surveys show customers are generally satisfied with retail banking services like ATMs and branch visits but some desire lower minimum account balances. Retail banking encompasses core services like payments, savings and checking accounts, as well as supporting services like ATMs, internet banking, credit/debit cards, and loans. Evaluating retail loan applications requires analyzing a customer's character, capacity to repay, collateral and more through both judgmental and credit scoring methods. Emerging issues for banks include knowing customers better, pricing products transparently, and motivating frontline employees.

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    Retail Banking

    Uploaded by

    jyotinegi12
    4K views20 pages
    Retail banking involves providing banking services to individuals for personal needs. It consists of high volumes of low-value transactions like deposits, payments, and credit services. Surveys show customers are generally satisfied with retail banking services like ATMs and branch visits but some desire lower minimum account balances. Retail banking encompasses core services like payments, savings and checking accounts, as well as supporting services like ATMs, internet banking, credit/debit cards, and loans. Evaluating retail loan applications requires analyzing a customer's character, capacity to repay, collateral and more through both judgmental and credit scoring methods. Emerging issues for banks include knowing customers better, pricing products transparently, and motivating frontline employees.

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    Retail banking involves providing banking services to individuals for personal needs. It consists of high volumes of low-value transactions like deposits, payments, and credit services. Surveys show customers are generally satisfied with retail banking services like ATMs and branch visits but some desire lower minimum account balances. Retail banking encompasses core services like payments, savings and checking accounts, as well as supporting services like ATMs, internet banking, credit/debit cards, and loans. Evaluating retail loan applications requires analyzing a customer's character, capacity to repay, collateral and more through both judgmental and credit scoring methods. Emerging issues for banks include knowing customers better, pricing products transparently, and motivating frontline employees.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    4K views20 pages

    Retail Banking

    Uploaded by

    jyotinegi12
    Retail banking involves providing banking services to individuals for personal needs. It consists of high volumes of low-value transactions like deposits, payments, and credit services. Surveys show customers are generally satisfied with retail banking services like ATMs and branch visits but some desire lower minimum account balances. Retail banking encompasses core services like payments, savings and checking accounts, as well as supporting services like ATMs, internet banking, credit/debit cards, and loans. Evaluating retail loan applications requires analyzing a customer's character, capacity to repay, collateral and more through both judgmental and credit scoring methods. Emerging issues for banks include knowing customers better, pricing products transparently, and motivating frontline employees.

    Copyright:

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    Download as ppt, pdf, or txt
    of 20

    RETAIL BANKING

    Presented by
    Group-1
    RETAIL BANKING

    When services are offered to individuals as their


    personal requirements, it is called Retail Banking.

    “Retail Banking should encompass all institutional who


    provide a range of banking services-money
    transmittion,deposit and credit service and some form
    of financial advice.”

    Retail Banking consists of large volumes of low value


    transactions.

    Retail Banking refers to the mobilization of deposit


    SURVEY CONDUCTED REGARDING CUSTOMERS
    USING SERVICES
    Most of the customers visiting branches 2-3 times a
    month.
    Very much satisfied with the services.
    24% are not satisfied with the minimum balance
    required to be maintained in their account.
    ATM’S are most preferred virtual banking technique
    by customers.
    At ATM’S preferred enquiry is balance and cash
    withdrawal.
    Internet is giving ground.
    Customers using telephone having opt for four types
    of functions
     - Check account balance
     - Cheque book request
     - Check credit card balance
    CATEGORIZATION OF RETAIL BANKING
    SERVICES
    Core Services Facilitating Supporting
    Payments Services
    •Cash Services
    •At Door
    •F.E.
    •T. Cs. •Internet
    •D.Ds.
    •T.T. •Telephone
    •E.F.T.

    Current a/c & •ATM •Credit Cards


    Saving Bank a/c •Inter Branch •Debit Cards
    •Safety vault •Internet
    •Telephones
    •Flexi a/c
    •Senior citizen
    services
    CATEGORIZATION OF RETAIL BANKING
    SERVICES Cont’d…
    Loan Product: •Current a/c •Delivery time period
    Consumer Loans •Interest Rate Option-
    Personal Loans •Saving Banking a/c Fixed/ Floating
    Housing Loans •Pre payment facility
    Education Loans •Time Deposit a/c •Counseling
    •Legal services for
    documentation
    •ECS for payment of
    Installment

    Insurance Product •C/A •Additional Insurance


    •S/B for family members
    •Life •T/B
    •Safety vaults •Counseling on post
    •General retirement savings
    RETAIL BANKING SERVICES
    1) Saving Bank accounts
    2) Fixed Deposit schemes
    3) Current Accounts
    4) Corporate Salary Accounts
    5) Automated Teller Machines
    6) Internet Banking Services
    7) De-mat Services
    8) Inter Branch Banking
    9) 24- hour Loan Banking
    10)Bill Pay
    11)Safe Deposit Lockers
    12)Debit Cards, Credit Cards and Charge Cards
    13)Easy Loan
    RETAIL BANKING SERVICES Cont’d…
    13.) Free Investment Advisory Service
    14.) Banking through Mobile Phone
    15.) Free Home Services
    16.) Bankassurance
    17.) Kid e Bank
    ADVANTAGE OF RETAIL BANKING
    Resource Side
    1) Deposit stable
    2) insensitive and less bargaining for additional
    interest
    3) Such deposit are loan cost funds
    4) Strong customer base
    5) Retail increases the subsidiaries business
    Assets side
    1) Better yield and improved bottom line
    2) Good avenue for funds deployment
    3) Consumers loans presumed to the lover risk
    ,less NPA
    4) Helps economic revival through increase in
    production
    5) Innovative product development
    6) Improve life style of people through cheap
    STRATEGIES FOR SUCCESS IN RETAIL
    BANKING
    Bank can formulate the following strategies
    in order to achieve success in the retail
    banking segment

     Adoption of advanced and latest technology

     Skilled man power in all branches and offices

     Balanced and sustained growth in deposits and


    advances
     Strategic cost management
    STRATEGIES FOR SUCCESS IN RETAIL
    BANKING Cont’d…

     Market research and market intelligence in


    order to formulate competitive and innovative
    products
     Customer relationship management

     Universal banking/ financial supermarkets

     More delivery channel


    TYPES OF RETAIL LOANS
    Installment Credit Clean Demand Loan,
    Immovable Property,
    Housing Loans Future Rentals
    Home Financing, House
    Construction Loan
    Educational Loans

    Regular, General, Serving


    Personal Consumption
    Professional,
    Loans
    Executive, Rural,
    Urban, Semi-urban
    Credit Card/Revolving
    Credit Pensioners, Vehicle Loan,

    Executive, Rural,
    Overdraft/Open Credit
    Urban, Semi-urban
    TYPES OF RETAIL LOANS Cont’d…
    Mahila Vikas Yojana Griha Sewa, Beauty Parlor, Boutiques,
    Tailor Shops

    Small Traders Day to day loans, Timber merchants


    and Saw mills

    Earnest money scheme, Bon Voyage


    Others
    scheme for financing travel
    and tour, Defense Personal Loan, CNG
    Kits,
    EVALUATING RETAIL LOANS
     Differ from commercial loans

    No comprehensive analytical format applies

     In commercial loans, financial papers , etc are


    available on which credit decision is taken

     Consumer loans are peculiar, bank cannot guage the


    creditworthiness of the borrower

     Credit analysis and credit scoring techniques


    EVALUATING RETAIL LOANS Cont’d…
    CREDIT ANALYSIS/SCORING TECHNIQUES
    Credit Analysis includes 6c’s namely character,
    capital, capacity, condition, collateral, compliance
     Credit Scoring covers certain steps
    are as follows-

    Judgmental as well as credit scoring


    procedure

    Through score bank states the


    borrower in terms of risk

    Historical data on the performance of


    previous loan is analyzed good/bad
    weighted average of borrowing
    RISK MANAGEMENT & RETAIL
    BANKING
     Intensive competition
     Banks may compromise on quality of credit.
     Banks have to target specific customer base on
    individual behavior, needs and value.
     Customer data based stored in the bank would be
    handy.
     International trends shows that large losses can be
    related to retail loans portfolio.
     There is need to tread cautiously and manage risks
    proactively.
     Through portfolio of retail loans is better diversified
    than corporate loans a systematic risk arising out of
    macroeconomics shock could still have a large
    negative impact.
    RISK MANAGEMENT & RETAIL
    BANKING Cont’d…
    Risk includes following -

    Deficiencies in lending policies

     Incorrect product structuring

     Inadequate loan documents

     Deficiencies in credit appraisal

     Inadequate risk pricing

     Inadequately defined lending limits


    EMERGING ISSUES IN HANDLING
    RETAIL BANKING
    Knowing The Customer
    b) Easier said than practiced
    c) Branch data warehousing
    d) Customer preferences, spending patterns

    Technology Issues
    g) Huge investment in technology
    h) New delivery channels, ATMs, credit cards etc.
    EMERGING ISSUES IN HANDLING
    RETAIL BANKING Cont’d…
    Product Innovations
    b) New products may not become successful
    c) Product should create value not amusement
    d) Can not sell the product on shelf

    Pricing Of The Product


    g) Banking sector witnessing price war
    h) Transparency in pricing
    i) Minimum amount due, total amount due, processing
    charges not advertised in credit cards, so these are
    hidden charges
    EMERGING ISSUES IN HANDLING
    RETAIL BANKING Cont’d…
    HRD Issues
    b) Motivating frontline staff, project them as sales
    managers rather than as clerk
    c) Changing the image of the bank from transaction
    provider to solution provider
    Low Cost And No Cost Deposits
    f) Banks are in need of more s/b a/c and current a/c so
    that their cost of liability is less
    NEW BANKING SERVICES TO BE STARTED
    IN COMING YEARS BY NPSBS
    More Services through ATM’S
    Smart Cards
    E-Cheques
    Wealth Management Services

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