BUSINESS RETAIL BANKING

STRATEGIES IN LIBERALIZED
AND GLOBALISED ERA.

Presented By:
Vikas Sood
Roll.No. 61
 Introduction
 Banking Scenario In India is of highly developed nature even
though its still far from world standards.

 Indian Banks have realized that along with organic growth

there is a need to grow inorganically as well.

 Changing lifestyles, Rapid growth of IT and service sector,

increasing incomes, etc. have contributed to the growth of retail
banking.

 Challenges faced by retail banking are security concerns, know

your customers(KYC) norms, credit evaluation, etc.
 Retail Banking

• Retail banking includes deposit schemes, retail

credit, retail loans, credit cards, debit cards,
mutual funds, depository services and services
according to customer needs.

• Asset side of retail banking includes wide

range of loan products like housing loans, auto
loans, consumption and educational loans, etc.
Objectives:
1. To study and analyze the level of growth of retail
banking in Indian banking industry; and
2. To give some suggestions to increase the growth of
retail banking.
Research Methodology:
This journal mainly focuses on the retail portfolio of
all the scheduled commercial banks(SCB’s). The
whole banking industry has been divided into four
parts:
G-1 : Public Sector Banks(27)
G-2 : Old Private Sector Banks(17)
G-3 : New Private Sector Banks(8)
G-4 : Foreign Banks(29)
Parameters used to trace the growth

1. Cash-Deposit ratio

2. Deposit pattern of SCB’s

3. Banks group wise lending to sensitive sectors.

4. Retail portfolio of banks.

 Cash-Deposit Ratio
Banks 2006(%) 2007(%) 2008(%)
Public Sector 68.2 72.2 73.3
Banks
Old Private Sector 63.7 67.2 67.4
Banks
New Private sector 77.2 77.8 79.8
Banks
Foreign Banks 85.8 83.8 84.3

1. Bank’s group wise analysis reveals that the cash-deposit ratio of foreign sector banks
grew up at the highest rate in 2008.

2. New Private Sector Banks have more cash-deposit ratio as compared to Old Private
Sector Banks.

3. Cash-Deposit Ratio of foreign banks showed wider variations.

 Bank’s group wise lending to Sensitive
sectors
1. Among bank groups, lending to sensitive sectors
indicates that New Private Sector Banks had largest
exposure, mainly in lending to Real Estate Sector,
followed by Foreign Banks.

2. Public sector banks has least contribution in Real

Estate Sector.

3. Growth of PSB in sensitive sectors is 17.17% in 2008

and that of NPSB is 34.11%.
 Retail Portfolio of Banks
Items % Variation

2006-07 2007-08
Consumer Durables 63.3 34.2
Auto Loans 34.5 6.6
Other Personal Loans 31.1 27.5
Total Retail loans and Advances 29.9 17.1

1. Within retail portfolio, credit for consumer durables experienced lowest

growth during 2008.

2. Credit for Auto loan and Other personal loans also lowered as compared
to previous years.

3. Share of Retail credit in Total loans and Advances declined from 29.9% to
17.1% in 2008
 Strategies for the Success of Retail
Banking

1.Advanced Technology.

2. Skilled Manpower.

3. Market Research and Intelligence.

4. Emphasis on Credit Quality and Risk Management.

5. Hitting the Customer Touch Points.

 Conclusion

1. Banks need to be more aggressive about Retail

Banking on a/c of changing customer needs,
innovative financial products, IT upgradations, etc.

2. To remain competitive in financial services, banks

are required to reengineer their operations.

3. Banks should plan more strategies to remove their

weaknesses in Retail Banking.