SHWETA Research Report On Impact of Reserve Bank Policies On Retail Banking

Dissertation Report
Impact of Reserve Bank Policies on Retail Banking

In partial fulfillment of the requirements of
PGDM program
(Post Graduate Diploma in Management) IILM- COLLEGE OF MANAGEMENT STUDIES,
GREATER NOIDA
MARCH 2012
Submitted To Prof. Inderpreet
Submitted By Akash Goyal
IILM COLLEGE OF MANAGEMENT STUDIES

BONAFIDE CERTIFICATE
Certified that this project report Impact
of Reserve Bank Policies on
The work is originally completed and the information provided in the study is authentic to the best of knowledge. who carried out the project work under my supervision.
Retail Banking is the bonafide work of Akash Goyal
SIGNATURE
Dr.Himanshu Mohan
SIGNATURE
Inderpreet Singh
HEAD OF THE DEPARTMENT
SUPERVISOR
Dean IILM CMS Placements Professor (International Business), 17- 18, Knowledge Park-II Greater Noida 201306
Assistant Professor and Faculty Incharge IILM-College of Management Studies, IILM, Plot No. 17 & 18, Knowledge ParkGreater Noida - 201306
Impact Of Reserve Bank Policies On Retail Banking.
ACKNOWLEDGEMENT
This Research Report which is on Impact Of Reserve Bank Policies On Retail Banking is done by me at the research time, provides details regarding the how various Reserve Bank policies affect the Retail Banking. I would like to take this opportunity to thank all the people, who extended their immense help to complete my project. I would like to thank my Research Report guide Pr. Inderpreet Singh who spent his valuable time to discuss about the Research and his continuous co-operation to me and for guiding and helping me to solve all kinds of queries regarding the Research work. Last but not the least I would like to thank all the persons, who have directly or indirectly helped me with their moral support for the completion of my Research Report.
(Akash Goyal)
CONTENTS
S.N.
1. 2. 3. 4. 5. 6. 7.
PARTICULAR
Objectives Of The Study Research Methodology Scope Of The Project Limitation Of Study Literature Review Introduction History Of Banking In India Pre-Nationalization Era Nationalization stage Post Liberalization Era
PAGE NO.
8 9 10 11 12 14
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16 17 20 22 23
8. 9.
Banking Structure In India Indian Banking System
10. 11. 12.
Broad Classification Of Banks In India Role Of Banks Reserve Bank Of India History Main Functions
24 25
27
27 30
RBI Has Various Tools To Control The Banks Credit And 32 Monetary Regulations Impact Of Monetary Policy 13. Retail Banking Introduction Future Of Retail Banking Retail Boom Special Feature Of Retail Credit Product Of Retail banking Opportunities Of Retail Banking Scope Of Retail Banking Advantages And Disadvantages Of Retail Banking 35
37
37 38 39 40 41 44 44 44
Factors Affecting Customers Choice Strategies To Increasing Retail Banking Business Challenges To Retail Banking 14. 15. 16. Various Rates And Observations Impact Of Reserve Bank Policies On Retail Banking Findings Impact On Saving Impact On Loans Impact On Mutual Fund 17. 18. Suggestions Bibliography
45 48 50 51 58
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59 62 65 68 70
OBJECTIVES OF THE STUDY

The basic objectives of this study include:
What is the impact of Reserve Bank Policies in Indian Retail Banking? How Reserve Bank policies affect a common man. What are the various issue and challenges before this industry?
To draw conclusions based on the figures and data?
RESEARCH METHODOLOGY
The Methodology followed in this project involved the following Phases:
Collection of Data.
Type of the Research
Analysis of Data.
Conclusion & Recommendation.
Collection of Data
This study is totally based on secondary sources of information.
The other source related to the Research Project are Banking related Journals, Reserve
Bank Magazine, business newspaper, current bank rates and repo rate etc.
Type Of The Research

The project is descriptive and analytical in nature..
Analysis
For the comparative analysis we use graphs, charts, and necessary diagrams. The current financial year 2010-11, 2009-10 and 2008-09 has been taken into calculation.
Interpretation & Recommendation

After completion of the entire analysis, the interpretation & recommendation are made on the basis of figures and diagrams . tools like percentage , Tables, Charts, Bar graphs used for representation of data.
SCOPE OF THE PROJECT

It is expected that this study will be of great use in practical applications for the common men and also for the policy makers. It is useful for the persons who are doing research and need some help they can see, analyze the report and get useful information (like different rates, monetary policy) which they want. It is also helpful for those persons who are working in academic sector. They can use when they faces problem related to impact of Reserve Bank policies on banking sector and other banking information. This report is helpful for persons who want to take loan and want to invest in mutual fund. After analyzing the report they can understand how Reserve Bank policies affect the loan sector and mutual fund sector and how can they earn profit in different situations. This report is also helpful for students because this report can give good idea about Reserve Bank and its policies, banking sector, retail banking, monetary policy, and banking structure in India.
.
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LIMITATIONS OF THE STUDY

The study is depends on secondary data. Throughout the whole study secondary data is
considered as primary data. Time constraint.

The study depends on data which collected from Reserve Bank Journal, different magazines
and newspaper. The data collected from above the source are not of detailed in nature. Inadequacy of data.
Number of peoples.
According to Official Secret Act banks not provided important data.
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LITERATURE REVIEW
All around the world retail lending has been an established market; however its rise in emerging economies like India has been of recent origin. If recent statistics on consumer finance are any indication, the last few years have been trend setting. The traditional debt-averse, middleclass Indians who lived within their thrifty means, never to venture beyond their means, seem to have given way to a new middle-class that is free from all inhibitions regarding conspicuous consumption. Unlike its predecessors, the middle-class of today has donned a new attitude; it attaches no social-stigma in taking loans for spending. Indian retail banking is up and kicking. During 2004-05 retail contributed 42% of overall credit growth. Growing at the CAGR of 35% over last 5 years the retail asset touched Rs1,89,000 crore. Major product segments of retail credit include housing finance, auto finance, personal loans, consumer durable loan and credit cards to name a few. Housing constitutes the biggest segment of 48% of the entire retail credit; followed by the auto loans segment which constitutes almost 27.8%. While the balance retail credit is used by consumer durables at 7.2%, educational and other personal loans take the remaining 16%. Banks are increasing their dominance in housing finance and capturing the market share of the housing finance companies. During 2004-05, the market share of banks stood at 62%, against the 33% by Housing finance companies; Rs2-5 lakh margins constitutes almost a third of the loan size. All the players in this market are adopting
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an aggressive attitude and the housing loan availability is playing into the players hands. Despite this phenomenal growth in India, the housing loan as a percentage of GDP at 4.91% indicates low penetration when compared to other countries like Malaysia (17%) and Thailand (9%). But again this coupled with the population growth indicates good future prospects. The last few years have witnessed a high increase in students aspiring for management and professional courses, leading to a spurt in educational loans. Banks are now having a direct tieup with the educational institutions to cash in on the opportunity. Public sector banks (PSBs) are more focused on the educational loans segment. In the educational loan segment, disbursement of domestic banks has surged by 13% to Rs2249 crore in 2004-05; up from Rs1983 crore in 2003-04. The number of students availing education loans has increased to 1,40,000 from 1,08,000 during this period. In India, all the retail banking segments are expected to witness a tremendous growth owing to the low cost of borrowing, changing customer attitudes towards borrowing and optimism regarding economic growth. Retail lending constitutes just 12.36% of the Indian banking system. Given this macroeconomic scenario, the share of retail banking will grow dramatically and it is expected that about 35% of the incremental growth in net credit will come from retail banking. This requires expansion and diversification of retail banking product portfolio, better penetration and faster service mechanism. Hitherto, the growth had come from metros and tier I cities. While the loan requirement from larger cities will continue to grow, explosive growth in credit is expected to register in tier II cities, semi-urban and rural areas.
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INTRODUCTION
The banking scenario in India has been changing at fast pace from being just the borrowers and lenders traditionally, the focus has shifted to more differentiated and customized product/service provider from regulation to liberalization in the year 1991, from planned economy to market. The Indian banking has come a long way from being a sleepy business institution to a highly proactive and dynamic entity. This transformation has been largely brought about by the large dose of liberalization and economic reforms that allowed banks to explore new business opportunities rather than generating revenues from conventional streams (i.e. borrowing and lending). The stalwarts of India's financial community nodded their heads sagaciously when Prime Minister Dr. Manmohan Singh said in a speech: "If there is one aspect in which we can confidentially assert that India is ahead of China, it is in the robustness and soundness of our banking system." Indian banks have been rated higher than Chinese banks by international rating agency Standard & Poor's. The competition heated up with the entry of private and foreign banks deregulation and globalization resulted in increased competition that refined the traditional way of doing business. They have realized the importance of a customer centric approach, brand building and IT enabled solutions. In the fierce battle for market share and mind share, the most potent weapon is a strong, well recognized and trusted brand name. Brands attract and convince people that they will get what is promised. Banking today has transformed into a technology intensive and customer friendly
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model with a focus on convenience. The companies have redoubled their efforts to woo the customers and establish themselves firmly in the market. It is no longer an option for a company to provide good customer service, it is expected. Currently overall, banking in India is considered as fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. Even in terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets-as compared to other banks in comparable economies in its region. The Indian banking industry is currently in a transition phase. On the one hand, the public sector banks, which are the mainstay of the Indian banking system, are in the process of consolidating their position by capitalizing on the strength of their huge networks and customer bases. On the other, the private sector banks are venturing into a whole new game of mergers and acquisitions to expand their bases. The use of technology has placed Indian banks at par with their global peers. It has also changed the way banking is done in India. Anywhere banking and Anytime banking have become a reality. The financial sector now operates in a more competitive environment than before and intermediates relatively large volume of international financial flows. The introduction of Basel II norms from 2009 and the fair level playing field that will be available to foreign banks from 2010 will further enhance the solidarity of the Indian banking sector and open new avenues. The entry of banks into the realm of financial services was followed very soon after the introduction of liberalization in the economy. Since the early 1990s structural changes of profound magnitude have been witnessed in global banking systems. Large scale mergers, amalgamations and acquisitions between the banks and financial institutions resulted in the growth in size and competitive strengths of the merged entities. Thus, emerged new financial conglomerates that could maximize economies of scale and scope by building the production of financial services organization called Universal Banking
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HISTORY OF BANKING IN INDIA

Without a sound and effective banking system in India it cannot have a healthy economy. The banking system of India should not only be hassle free but it should be able to meet new challenges posed by the technology and any other external and internal factors. For the past three decades India's banking system has several outstanding achievements to its credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of the country. This is one of the main reasons of India's growth process. The government's regular policy for Indian bank since 1969 has paid rich dividends with the nationalization of 14 major private banks of India. Not long ago, an account holder had to wait for hours at the bank counters for Getting a draft or for withdrawing his own money. Today, he has a choice. Gone are days when the most efficient bank transferred money from one branch to other in two days. Now it is simple as instant messaging or dial a pizza. Money has become the order of the day. The first bank in India, though conservative, was established in 1786. From 1786 till today, the journey of Indian Banking System can be segregated into three distinct phases. They are as mentioned below: 1) 2) Pre-Nationalization Era. Nationalization Stage.
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3)
Post Liberalization Era.
1) Pre-Nationalization Era
The modern type of banking, however, was developed by the Agency Houses of Calcutta and Bombay after the establishment of Rule by the East India Company in 18th and 19th centuries. During the early part of the 19th Century, ht volume of foreign trade was relatively small. Later on as the trade expanded, the need for banks of the European type was felt and the government of the East India Company took interest in having its own bank. The government of Bengal took the initiative and the first presidency bank, the Bank of Calcutta (Bank of Bengal) was established. In 1840, the Bank of Bombay and IN 1843, the Bank of Madras was also set up. These three banks also known as Presidency Bank. The Presidency Banks had their branches in important trading centers but mostly lacked in uniformity in their operational policies. In 1899, the Government proposed to amalgamate these three banks in to one so that it could also function as a Central Bank, but the Presidency Banks did not favor the idea. However, the conditions obtaining during world war period (1914-1918) emphasized the need for a unified banking institution, as a result of which the Imperial Bank was set up in1921. The Imperial Bank of India acted like a Central bank and as a banker for other banks. The RBI (Reserve Bank of India) was established in 1935 as the Central Bank of the Country. In 1949, the Banking Regulation act was passed and the RBI was nationalized and acquired extensive regulatory powers over the commercial banks. In 1950, the Indian Banking system comprised of the RBI, the Imperial Bank of India, Cooperative banks, Exchange banks and Indian Joint Stock banks.
2) Nationalization Stages
After Independence, in 1951, the All India Rural Credit survey, committee of Direction with Shri. A. D. Gorwala as Chairman recommended amalgamation of the Imperial Bank of India and ten others banks into a newly established bank called the State Bank of India (SBI). The
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Government of India accepted the recommendations of the committee and introduced the State Bank of India bill in the Lok Sabha on 16th April 1955 and it was passed by Parliament and got the presidents assent on 8th May 1955. The Act came into force on 1st July 1955, and the Imperial Bank of India was nationalized in 1955 as the State Bank of India. The main objective of establishing SBI by nationalizing the Imperial Bank of India was to extend banking facilities on a large scale more particularly in the rural and semi-urban areas and to diverse other public purposes. In 1959, the SBI (Subsidiary Bank) act was proposed and the following eight stateassociated banks were taken over by the SBI as its subsidiaries.
Name of the Bank 1. State Bank of Hyderabad 2. State Bank of Bikaner 3. State Bank of Jaipur 4. State Bank of Saurashtra 5. State Bank of Patiala 6. State Bank of Mysore 7. State Bank of Indore 8. State Bank of Travancore
Subsidiary with effect from 1st October 1959 1st January 1960 1st January 1960 1st May 1960 1st April 1960 1st March 1960 1st January 1968 1st January 1960
With effect from 1st January 1963, the State Bank of Bikaner and State Bank of Jaipur with head office located at Jaipur. Thus, seven subsidiary banks State Bank of India formed the SBI Group. The SBI Group under statutory obligations was required to open new offices in rural and semi-urban areas and modern banking was taken to these unbanked remote areas.
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On 19th July 1969, then the Prime Minister, Mrs. Indira Gandhi announced the nationalization of 14 major scheduled Commercial Banks each having deposits worth Rs. 50 crore and above. This was a turning point in the history of commercial banking in India. Later the Government Nationalized six more commercial private sector banks with deposit liability of not less than Rs. 200 crores on 15th April 1980, viz. i) ii) iii) iv) v) vi) Andhra Bank. Corporation Bank. New Bank if India. Oriental Bank of Commerce. Punjab and Sind Bank. Vijaya Bank. In 1969, the Lead Bank Scheme was introduced to extend banking facilities to every corner of the country. Later in 1975, Regional Rural Banks were set up to supplement the activities of the commercial banks and to especially meet the credit needs of the weaker sections of the rural society. Nationalization of banks paved way for retail banking and as a result there has been an alt round growth in the branch network, the deposit mobilization, credit disposals and of course employment. The first year after nationalization witnessed the total growth in the agricultural loans and the loans made to SSI by 87% and 48% respectively. The overall growth in the deposits and the advances indicates the improvement that has taken place in the banking habits of the people in the rural and semi-urban areas where the branch network has spread. Such credit expansion enabled the banks to achieve the goals of nationalization, it was however, achieved at the coast of profitability of the banks.
Consequences of Nationalization
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The quality of credit assets fell because of liberal credit extension policy. Political interference has been as additional malady. Poor appraisal involved during the loan meals conducted for credit disbursals. The credit facilities extended to the priority sector at concessional rates. The high level of low yielding SLR investments adversely affected the profitability of the banks. There was downward trend in the quality of services and efficiency of the banks. The rapid branch expansion has been the squeeze on profitability of banks emanating primarily due to the increase in the fixed costs.
3) Post-Liberalization Era--Thrust on Quality and Profitability

By the beginning of 1990, the social banking goals set for the banking industry made most of the public sector resulted in the presumption that there was no need to look at the fundamental financial strength of this bank. Consequently they remained undercapitalized. Revamping this structure of the banking industry was of extreme importance, as the health of the financial sector in particular and the economy was a whole would be reflected by its performance. The need for restructuring the banking industry was felt greater with the initiation of the real sector reform process in 1992. the reforms have enhanced the opportunities and challenges for the real sector making them operate in a borderless global market place. However, to harness the benefits of globalization, there should be an efficient financial sector to support the structural reforms taking place in the real economy. Hence, along with the reforms of the real sector, the banking sector reformation was also addressed. The route causes for the lackluster performance of banks, formed the elements of the banking sector reforms. Some of the factors that led to the dismal performance of banks were. Regulated interest rate structure.
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Lack of focus on profitability. Lack of transparency in the banks balance sheet. Lack of competition. Excessive regulation on organization structure and managerial resource. Excessive support from government. Against this background, the financial sector reforms were initiated to bring about a paradigm shift in the banking industry, by addressing the factors for its dismal performance. In this context, the recommendations made by a high level committee on financial sector, chaired by M. Narasimham, laid the foundation for the banking sector reforms. These reforms tried to enhance the viability and efficiency of the banking sector. The Narasimham Committee suggested that there should be functional autonomy, flexibility in operations, dilution of banking strangulations, reduction in reserve requirements and adequate financial infrastructure in terms of supervision, audit and technology. The committee further advocated introduction of prudential forms, transparency in operations and improvement in productivity, only aimed at liberalizing the regulatory framework, but also to keep them in time with international standards. The emphasis shifted to efficient and prudential banking linked to better customer care and customer services.
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BANKING STRUCTURE IN INDIA

In todays dynamic world banks are inevitable for the development of a country. Banks play a pivotal role in enhancing each and every sector. They have helped bring a draw of development on the worlds horizon and developing country like India is no exception. Banks fulfills the role of a financial intermediary. This means that it acts as a vehicle for moving finance from those who have surplus money to (however temporarily) those who have deficit. In everyday branch terms the banks channel funds from depositors whose accounts are in credit to borrowers who are in debit. Without the intermediary of the banks both their depositors and their borrowers would have to contact each other directly. This can and does happen of course. This is what has lead to the very foundation of financial institution like banks. Before few decades there existed some influential people who used to land money. But a substantially high rate of interest was charged which made borrowing of money out of the reach of the majority of the people so there arose a need for a financial intermediate. The Bank have developed their roles to such an extent that a direct contact between the depositors and borrowers in now known as disintermediation.
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Banking industry has always revolved around the traditional function of taking deposits, money transfer and making advances. Those three are closely related to each other, the objective being to lend money, which is the profitable activity of the three. Taking deposits generates funds for lending and money transfer services are necessary for the attention of deposits. The Bank have introduced progressively more sophisticated versions of these services and have diversified introduction in numerable areas of activity not directly relating to this traditional trinity.
INDIAN BANKING SYSTEM

Reserve Bank of India
Schedule Banks
Non-Schedule Banks
State co-op Banks
Commercial Banks
Central co-op Banks and Primary Cr. Societies
Commercial Banks
Indian
Foreign
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Public Sector Banks
Private Sector Banks
HDFC, ICICI etc.
State Bank of India and its Subsidiaries
Other Nationalized Banks
Regional Rural Banks
BROAD CLASSIFICATION OF BANKS IN INDIA

The RBI: The RBI is the supreme monetary and banking authority in the country and has the responsibility to control the banking system in the country. It keeps the reserves of all scheduled banks and hence is known as the Reserve Bank.
1) Public Sector Banks:

State Bank of India and its Associates (8) Nationalized Banks (19) Regional Rural Banks Sponsored by Public Sector Banks (196) (2) Private Sector Banks: Old Generation Private Banks (22) Foreign New Generation Private Banks (8) Banks in India (40) (3) Co-operative Sector Banks:
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State Co-operative Banks Central Co-operative Banks Primary Agricultural Credit Societies Land Development Banks State Land Development Banks
(4) Development Banks: Development Banks mostly provide long term finance for setting up industries. They also provide short-term finance (for export and import activities) Industrial Finance Co-operation of India (IFCI) Industrial Development of India (IDBI) Industrial Investment Bank of India (IIBI) Small Industries Development Bank of India (SIDBI) National Bank for Agriculture and Rural Development (NABARD) Export-Import Bank of India
Role of Banks
Banks play a positive role in economic development of a country as repositories of communitys savings and as purveyors of credit. Indian Banking has aided the economic development during the last fifty years in an effective way. The banking sector has shown a remarkable responsiveness to the needs of planned economy. It has brought about a considerable progress in its efforts at deposit mobilization and has taken a number of measures in the recent past for accelerating the rate of growth of deposits. As recourse to this, the commercial banks opened branches in urban, semi-urban and rural areas and have introduced a number of attractive schemes to foster economic development. The activities of commercial banking have growth in multi-directional ways as well as multi-dimensional manner. Banks have been playing a catalytic role in area development, backward area development, extended assistance to rural development all along helping agriculture,
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industry, international trade in a significant manner. In a way, commercial banks have emerged as key financial agencies for rapid economic development. By pooling the savings together, banks can make available funds to specialized institutions which finance different sectors of the economy, needing capital for various purposes, risks and durations. By contributing to government securities, bonds and debentures of termlending institutions in the fields of agriculture, industries and now housing, banks are also providing these institutions with an access to the common pool of savings mobilized by them, to that extent relieving them of the responsibility of directly approaching the saver. This intermediation role of banks is particularly important in the early stages of economic development and financial specification. A country like India, with different regions at different stages of development, presents an interesting spectrum of the evolving role of banks, in the matter of intermediation and beyond. Mobilization of resources forms an integral part of the development process in India. In this process of mobilization, banks are at a great advantage, chiefly because of their network of branches in the country. And banks have to place considerable reliance on the mobilization of deposits from the public to finance development programs. Further, deposit mobilization by banks in India acquired greater significance in their new role in economic development. Commercial banks provide short-term and medium-term financial assistance. The short-term credit facilities are granted for working capital requirements. The medium-term loans are for the acquisition of land, construction of factory premises and purchase of machinery and equipment. These loans are generally granted for periods ranging from five to seven years. They also establish letters of credit on behalf of their clients favoring suppliers of raw materials/machinery (both Indian and foreign) which extend the bankers assurance for payment and thus help their delivery. Certain transaction, particularly those in contracts of sale of Government Departments, may require guarantees being issued in lieu of security earnest money deposits for release of advance money, supply of raw materials for processing, full payment of bills on the assurance of the performance etc. Commercial banks issue such guarantees also.
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RESERVE BANK OF INDIA

The central bank of India, which was established on April 1, 1935, under the Reserve Bank of India Act 1934. The RBI uses monetary policy to create financial stability in India and is charged with regulating the country's currency and credit systems. The Reserve Bank of India was set up on the basis of the recommendations of the Hilton Young Commission. The Reserve Bank of India Act, 1934 (II of 1934) provides the statutory basis of the functioning of the Bank, which commenced operations on April 1, 1935.
The Bank was constituted to:

Regulate the issue of bank notes. Maintain reserves with a view to securing monetary stability. And To operate the credit and currency system of the country to its advantage.
HISTORY
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The central bank was founded in 1935 to respond to economic troubles after the First World War. The Reserve Bank of India was set up on the recommendations of the Hilton-Young Commission. The commission submitted its report in the year 1926, though the bank was not set up for another nine years. The Preamble of the Reserve Bank of India describes the basic functions of the Reserve Bank as to regulate the issue of bank notes, to keep reserves with a view to securing monetary stability in India and generally to operate the currency and credit system in the best interests of the country. The Central Office of the Reserve Bank was initially established in Kolkata, Bengal, but was permanently moved to Mumbai in 1937. The Reserve Bank continued to act as the central bank for Myanmar till Japanese occupation of Burma and later up to April 1947, though Burma seceded from the Indian Union in 1937. After partition, the Reserve Bank served as the central bank for Pakistan until June 1948 when the State Bank of Pakistan commenced operations. Though originally set up as a shareholders bank, the RBI has been fully owned by the government of India since its nationalization in 1949.
19501960
Between 1950 and 1960, the Indian government developed a centrally planned economic policy and focused on the agricultural sector. The administration nationalized commercial banks and established, based on the Banking Companies Act, 1949 (later called Banking Regulation Act) a central bank regulation as part of the RBI. Furthermore, the central bank was ordered to support the economic plan with loans.
19601969
As a result of bank crashes, the reserve bank was requested to establish and monitor a deposit insurance system. It should restore the trust in the national bank system and was initialized on 7 December 1961. The Indian government founded funds to promote the economy and used the slogan Developing Banking. The Gandhi administration and their successors restructured the national bank market and nationalized a lot of institutes. As a result, the RBI had to play the central part of control and support of this public banking sector.
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19691985
Between 1969 and 1980, the Indian government nationalized 20 banks. The regulation of the economy and especially the financial sector was reinforced by the Gandhi administration and their successors in the 1970s and 1980s. The central bank became the central player and increased its policies for a lot of tasks like interests, reserve ratio and visible deposits.[8] The measures aimed at better economic development and had a huge effect on the company policy of the institutes. The banks lent money in selected sectors, like agri-business and small trade companies. The branch was forced to establish two new offices in the country for every newly established office in a town. The oil crises in 1973 resulted in increasing inflation, and the RBI restricted monetary policy to reduce the effects.
19851991
A lot of committees analyzed the Indian economy between 1985 and 1991. Their results had an effect on the RBI. The Board for Industrial and Financial Reconstruction, the Indira Gandhi Institute of Development Research and the Security & Exchange Board of India investigated the national economy as a whole, and the security and exchange board proposed better methods for more effective markets and the protection of investor interests. The Indian financial market was a leading example for so-called "financial repression" (Mackinnon and Shaw). The Discount and Finance House of India began its operations on the monetary market in April 1988; the National Housing Bank, founded in July 1988, was forced to invest in the property market and a new financial law improved the versatility of direct deposit by more security measures and liberalization.
19912000
The national economy came down in July 1991 and the Indian rupee was devalued. The currency lost 18% relative to the US dollar, and the Narsimahmam Committee advised restructuring the financial sector by a temporal reduced reserve ratio as well as the statutory liquidity ratio. New
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guidelines were published in 1993 to establish a private banking sector. This turning point should reinforce the market and was often called neo-liberal The central bank deregulated bank interests and some sectors of the financial market like the trust and property markets. This first phase was a success and the central government forced a diversity liberalization to diversify owner structures in 1998. The National Stock Exchange of India took the trade on in June 1994 and the RBI allowed nationalized banks in July to interact with the capital market to reinforce their capital base. The central bank founded a subsidiary companythe Bharatiya Reserve Bank Note Mudran Limitedin February 1995 to produce banknotes.
Since 2000
The Foreign Exchange Management Act from 1999 came into force in June 2000. It should improve the foreign exchange market, international investments in India and transactions. The RBI promoted the development of the financial market in the last years, allowed online banking in 2001 and established a new payment system in 2004 - 2005 (National Electronic Fund Transfer). The Security Printing & Minting Corporation of India Ltd., a merger of nine institutions, was founded in 2006 and produces banknotes and coins. The national economy's growth rate came down to 5.8% in the last quarter of 2008 2009 and the central bank promotes the economic development.
MAIN FUNCTIONS
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Monetary authority
The Reserve Bank of India is the main monetary authority of the country and beside that the central bank acts as the bank of the national and state governments. It formulates, implements and monitors the monetary policy as well as it has to ensure an adequate flow of credit to productive sectors. Objectives are maintaining price stability and ensuring adequate flow of credit to productive sectors. The national economy depends on the public sector and the central bank promotes an expansive monetary policy to push the private sector since the financial market reforms of the 1990s. The institution is also the regulator and supervisor of the financial system and prescribes broad parameters of banking operations within which the country's banking and financial system functions. Objectives are to maintain public confidence in the system, protect depositors' interest and provide cost-effective banking services to the public. The Banking Ombudsman Scheme has been formulated by the Reserve Bank of India (RBI) for effective addressing of complaints by bank customers. The RBI controls the monetary supply, monitors economic indicators like the gross domestic product and has to decide the design of the rupee banknotes as well as coins.
Manager of exchange control

The central bank manages to reach the goals of the Foreign Exchange Management Act, 1999. Objective: to facilitate external trade and payment and promote orderly development and maintenance of foreign exchange market in India.
Issuer of currency
The bank issues and exchanges or destroys currency and coins not fit for circulation. The objectives are giving the public adequate supply of currency of good quality and to provide loans to commercial banks to maintain or improve the GDP. The basic objectives of RBI are to issue bank notes, to maintain the currency and credit system of the country to utilize it in its best advantage, and to maintain the reserves.
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RBI maintains the economic structure of the country so that it can achieve the objective of price stability as well as economic development, because both objectives are diverse in themselves.
Regulator And Supervisor Of The Financial System

Prescribes broad parameters of banking operations within which the countrys banking and
financial system functions.

Objective: maintain public confidence in the system, protect depositors interest and
provide cost-effective banking services to the public. The Banking Ombudsman Scheme has been formulated by the Reserve Bank of India (RBI) for effective redress of complaints by bank customers.
Developmental role
The central bank has to perform a wide range of promotional functions to support national objectives and industries. The RBI faces a lot of inter-sectoral and local inflation-related problems. Some of these problems are results of the dominant part of the public sector.
Related functions
The RBI is also a banker to the government and performs merchant banking function for the central and the state governments. It also acts as their banker. The National Housing Bank (NHB) was established in 1988 to promote private real estate acquisition. The institution maintains banking accounts of all scheduled banks, too. There is now an international consensus about the need to focus the tasks of a central bank upon central banking. RBI is far out of touch with such a principle, owing to the sprawling mandate described above.
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RBI has various tools to control the Banks Credit and Monetary Regulation
Monetary Policy
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment. Monetary theory provides insight into how to craft optimal monetary policy. Monetary policy is referred to as either being expansionary, or a contractionary, where an expansionary policy increases the total supply of money in the economy more rapidly than usual, and a contractionary policy expands the money supply more slowly than usual or even shrinks it. Expansionary policy is traditionally used to try to combat unemployment in a recession by lowering interest rates in the hope that easy credit will entice businesses into expanding. Contractionary policy is intended to slow inflation in hopes of avoiding the resulting distortions and deterioration of asset values.
Monetary Magnitudes
M0 = currency with public + demand deposits with bank + other deposits with RBI. M1 = M0 + post office deposits. M2 = M0 + time deposits with bank. M3 = M2 + total post office deposits.
Tools Of Monetary Policy

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1- Qualitative tool- The qualitative tools in a central bank or a Treasury Department's monetary policy are those that affect bank lending through any means other than the expansion or constriction of the money supply itself. These may include, for example, the direct rationing of credit, changes in the marginal requirements of loans, moral suasion and publicity. (a) Bank Rate: RBI (Reserve Bank of India) lends to the commercial banks through its discount window to help the banks meet depositors demands and reserve requirements. The interest rate the RBI charges the banks for this purpose is called bank rate. If the RBI wants to increase the liquidity and money supply in the market, it will decrease the bank rate and if it wants to reduce the liquidity and money supply in the system, it will increase the bank rate. Current Bank rate = 6%. (2- Nov- 2010)
(b) Cash Reserve Requirements (CRR): Every commercial bank has to keep certain minimum cash reserves with RBI. RBI can vary this rate between 3% and 15%. RBI uses this tool to increase or decrease the reserve requirement depending on whether it wants to affect a decrease or an increase in the money supply. An increase in CRR will make it mandatory on the part of the banks to hold a large proportion of their deposits in the form of deposits with the RBI. This will reduce the size of their deposits and they will lend less. This will in turn decrease the money supply. Earlier Reserve bank fixed Bank Rate 3 % to 15%. 3% is lower limit and maximum it could be 15%, and Reserve Bank 1 % interest in every percent increment, but now Reserve Bank changed the rule and there is no lower limit and Reserve Bank not giving interest. Current CRR = 6%. (2- Nov- 2010)
(c) Statutory Liquidity Requirements (SLR): Apart from the CRR, banks are required to maintain liquid assets in the form of gold, cash and approved securities. RBI has stepped up liquidity requirements for two reasons: - Higher liquidity ratio forces commercial banks to maintain
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a larger proportion of their resources in liquid form and thus reduces their capacity to grant loans. Reserve Bank can fix Statutory Liquidity Ratio 25-45 %. 25% is lower limit of Statutory Liquidity Ratio and 45 % is Statutory Liquidity Ratio. Current SLR = 25%
(d) Open Market Operations (OMO): is the means of implementing monetary policy by
which a central bank controls the short term interest rate and the supply of base money in an economy, and thus indirectly the total money supply. This involves meeting the demand of base money at the target rate by buying and selling government securities, or other financial instruments. Monetary targets such as inflation, interest rates or exchange rates are used to guide this implementation.
Repo Rate is the rate at which the RBI buys government securities from the market to
infuse liquidity in the system. 6.25% (2- Nov- 2010)
Current RR =
Reverse Repo rate is the rate at which the RBI absorbs excess bank funds by selling
government securities in the market. 5.25% (2- Nov- 2010)
Current RRR =
2- Quantitative tool - Quantitative tool is an unconventional monetary policy used by some central banks to stimulate their economy. The central bank creates money which it uses to buy government bonds and other financial assets, in order to increase the money supply and the excess reserves of the banking system; this also raises the prices of the financial assets bought (which lower their yield).
IMPACT OF MONETARY POLICY

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Reserve Bank change Monetary Policy time to time. The main motto of Reserve Bank to change Monetary Policy (Bank Rate, Cash Reserve Ratio, Statutory Liquidity Ratio, Repo Rate and Reverse Repo Rate) to control the inflation. In inflation the value of rupee decreases and the flow of money in the market is more. So Reserve Bank changes Bank Rate, Cash Reserve Ratio, Statutory Liquidity Ratio, Repo Rate and Reverse Repo Rate time to time and sucks the liquidity from the market. Reserve Bank work to control inflation for last many years. In last two years the inflation increases day by day so Reserve Bank change Bank Rate, Cash Reserve Ratio, Statutory Liquidity Ratio, Repo Rate and Reverse Repo Rate time to time to control the inflation. After remaining in double digit for five successive months inflation declined to 8.8 %, in Aug. 2010 and further to 7.5 %in Nov. 2010. Food price inflation crosses 40 % few months ago and food price inflation moderated from an average of 15.7% in quarter 1 of 2010-11 to 12.3 %in quarter 2 to 10 % in October 2010 and further 6.1 % in November 2010.
Effect Of Inflation
Inflation affect in different ways. It is beneficial for some persons and for some persons it is not beneficial. Impact of Inflation for different type of persons as following:
Borrower Lender Business
= = = = = = = = = =
Benefit. Loss. Benefit. Benefit. Benefit. Loss. Loss. Loss. Increase. Benefit.
Agriculture
Investor Service Industry Consumer Government Employment Tax payee 35
Foreign Business Import Export = = Increase (foreign goods are less costly). Decrease.
RETAIL BANKING
Introduction
Retail banking refers to banking in which banking institutions execute transactions directly with consumers, rather than corporations or other banks. Services offered include: saving and transactional account, mortgages, personal loans, debit cards, and credit cards etc.
Retail banking aims to be the one-stop shop for as many financial services as possible on behalf of retail clients. Some retail banks have even made a push into investment services such as wealth management, brokerage accounts, private banking and retirement planning. While some of these ancillary services are outsourced to third parties (often for regulatory reasons), they often
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intertwine with core retail banking accounts like checking and savings to allow for easier transfers and maintenance. Retail Banking in India has fast emerged as one of the major drivers of the overall banking industry and has witnessed enormous growth in the recent past. The Retail Banking Report encompasses extensive study and analysis of the rapidly growing sector. It primarily covers analysis of the present status, current trends, major issue and challenges in the growth of the retail banking sector. This report helps in Banks, financial institutions, MNC Banks, academicians, consultants and researchers to have a better understanding of the booming opportunities in retail banking in India. With recession departing away from away global economy, opportunities are slowly emerging in emerging markets. Since emerging markets, except China, were less depending upon US for growth; are first to come out of recession eclipse. Growth opportunities in banking, especially retail segment is set to witness fast growth due to high consumption. The higher growth of retail lending in emerging economies is attributable to fast growth of personal wealth, favorable demographic profile, rapid development in information technology, the conducive macro-economic environment, financial market reforms, and several micro-level supply side factors. The retail banking strategies of banks are undergoing major transformation, as banks adopt a mix of strategies like organic growth, acquisitions and alliances. This has resulted in a paradigm shift in the marketing strategies of the banks. Public Sector Banks players are adopting aggressive strategies, leveraging their rural branch network and their customer vase to earn a larger share of the retail pie. Banks are also going in for innovative strategies like cross selling, packaged selling of retail products and technology based banking. At the same time, new foreign players are also entering this high growth sector.
FUTURE OF RETAIL BANKING

Retail banking has significant past and glorious future over the years. Retail banking has proved as an effective tool not only to improve the bottom lines of the banks concerned but also to significantly contribute to the development of the individual consumers availing the services or products in particular and to the overall development of the society in general with the needs of the
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consumers ever multiplying. There is definitely a vast scope for the furtherance of the Retail Banking business. The society is made of the individuals and the environment surrounding him. As development takes place in the society, the needs of the people grow faster than ever. The wealth creation and its professional management are yet another distinct advantage the society or nation can derive from Retail Banking. The depth of the untapped resources in the retail segment is not yet measured. These resources could be channelized for nation building.
On the whole, looking ahead, the prospects of retail banking are brighter than ever and the bankers have to give continued thrust to this area of banking. Thus, with the consumers ever multiplying needs there is definitely a vast scope for the furtherance of the retail banking business. Operationally, there is a possibility that technology go beyond merely reducing the cost & improving the quality of current products. It may prove possible, even profitable, to combine functions in new ways.
RETAIL BOOM
Keeping pace with the average 8.5 per cent growth of the Indian economy over the past few years, the retail banking sector in India has also witnessed phenomenal growth. It has faced up to the need of the hour and introduced anytime, anywhere banking, for its customers through ATMs, mobile and internet banking. It has also offered services like D-MAT, plastic money (credit and debit cards), online transfers, etc. This has not only helped in reducing operational costs but facilitated greater conveniences to its customers. According to quarter 2 result net income rose 31.2 per cent year-on-year over the
quarter despite investment banking revenues dropping 30 per cent.

Huge revenue growth in retail banking and the Investment Solutions business was given as the main reason for the positive results.
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High - tech Banking

ATMs - With growing technological innovations, banks have significantly expanded their ATM network over the past three years. According to the RBI inn present more than 4,50,000 ATMs compared to end-June 2008, the number of ATMs in the country had 3,60,314, at end-March 2007ATMs are 2,70,088 and at end-March 2006 ATMs are approx 2,01,000.
Loan Disbursement
Technology has facilitated the growth in retail loan disbursements, making the whole process simpler and faster. The sector has delivered a growth of around 30 per cent per year over the past 4-5 years. As per the RBI data, although the retail portfolio of banks saw a slowdown to 29.9 per cent during 2006-07 from 40.9 per cent in 2005-06, the growth was faster than the overall credit portfolio of the banking sector (28.5 per cent).
Core Banking Solutions (CBS)

The concept of CBS, which allows a customer to fulfil a wide range of banking operation online, has come alive during the past four years. The number of bank branches providing CBS rose rapidly to 44 per cent at end- March 2007 from 28.9 per cent at end March 2006. Electronic fund transfer facilities and mobile banking are expected to provide a further fillip to the retail banking in the coming years.
SPECIAL FEATURES OF RETAIL CREDIT
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One of the prominent features of Retail Banking products is that it is a volume driven
business. Further, Retail Credit ensures that the business is widely dispersed among a large
customer base unlike in the case of corporate lending, where the risk may be concentrated on a selected few plans. Ability of a bank to administer a large portfolio of retail credit products depends upon such factors:
Strong Credit Assessment Capability
Because of large volume good infrastructure is required. If the credit assessment itself is qualitative, than the need for follow up in the future reduces considerably.
Sound Documentation
A latest system for credit documentation is necessary pre-requisite for healthy growth of credit portfolio, as in the case of credit assessment, this will also minimize the need to follow up at future point of time.
Strong Possessing Capability
Since large volumes of transactions are involved, today transactions, maintenance of backups is required.
Regular Constant Follow- up
Ideally, follow up for loan repayments should be an ongoing process. It should start from customer enquiry and last till the loan is repaid fully.
Skilled Human Resource
This is one of the most important pre-requisite for the efficient management of large and diverse retail credit portfolio. Only highly skilled and experienced man power can withstand the river of administrating a diverse and complex retail credit portfolio.
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Technological Support
This is yet another vital requirement. Retail credit is highly technological intensive in nature, because of large volumes of business, the need to provide instantaneous service to the customer large, faster processing, maintaining database, etc.
Products of Retail Banking

There are some main products of Retail Banking which are following.
1. Deposits (Saving Accounts) 2. Loans 3. Mutual Fund
1- Deposit (Savings Accounts)

Saving accounts are accounts maintained by retail financial institutions that pay interest but cannot be used directly as money (for example, by writing a cheque). These accounts let customers set aside a portion of their liquid assets while earning a monetary return.
2- Loans
An arrangement in which a lender gives money or property to a borrower, and the borrower agrees to return the property or repay the money, usually along with interest, at some future point(s) in time. Usually, there is a predetermined time for repaying a loan, and generally the lender has to bear the risk that the borrower may not repay a loan (though modern capital markets have developed many ways of managing this risk). Every bank give most of the loan in two types: Fixed interest rate loan. Fluctuating interest rate loan.
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Fixed Interest Rate Loan - A loan in which the interest rate does not change during the entire term of the loan. For an individual taking out a loan when rates are low, the fixed rate loan would allow him or her to "lock in" the low rates and not be concerned with fluctuations.
Fluctuating Interest Rate Loan - A loan in which interest rate change according to the market conditions, government policies etc. interest rate is not fix during the entire term of loan. This type of loan is beneficial and also risky for borrower, because some time according to the market conditions and government policies
borrower have to pay low interest and other side it can increases and risky for the borrower. Every bank want to be secure before giving any loan so the bank want some securities and mortgage from borrower side. A Mortgage Loan is a loan secured by real property through the use of a mortgage note which evidences the existence of the loan and the encumbrance of that realty through the granting of a mortgage which secures the loan. However , the word mortgage alone, in everyday usage, is most often used to mean mortgage loan. A home buyer or builder can obtain financing (a loan) either to purchase or secure against the property from a financial institution, such as a bank, either directly or indirectly through intermediaries. Features of mortgage loans such as the size of the loan, maturity of the loan, interest rate, method of paying off the loan, and other characteristics can vary considerably. In many jurisdictions, though not all (Bali, Indonesia being one exception. it is normal for home purchases to be funded by a mortgage loan. Few individuals have enough savings or liquid funds to enable them to purchase property outright. In countries where the demand for home ownership is highest, strong domestic markets have developed. The word mortgage is a Law French term meaning "dead pledge," apparently meaning that the pledge ends (dies) either when the obligation is fulfilled or the property is taken through foreclosure.
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3- Mutual Fund
A mutual fund is a professionally-managed type of collective investment scheme that pools money from many investors to buy securities (stocks, bonds, short-term money market instruments, and/or other securities). A mutual fund has a fund manager that trades (buys and sells) the fund's investments in accordance with the fund's investment objective. In the United States, a mutual fund is registered with the Securities and Exchange Commission (SEC) and is overseen by a board of directors or trustees (if the U.S. fund is organized as a trust as they often are). The board is charged with ensuring that the fund is managed in the best interests of the fund's investors and with hiring the fund manager and other service providers to the fund. Under Internal Revenue Service (IRS) rules, a U.S. mutual fund must distribute effectively all of its net income and net realized gains from the sale of securities at least annually. Since 1940 in the U.S., with the passage of the Investment Company Act of 1940 (the '40 Act), there have been three basic types of registered investment companies: open-end funds (or mutual funds),unit investment trusts (UITs); and closed-end funds. Recently, exchangetraded funds (ETFs) have gained in popularity. Hedge funds are not considered a type of mutual fund; they are another type of commingled investment scheme that is not governed by the Investment Company Act of 1940 and that is not required to register with the Securities and Exchange Commission.
SCOPE FOR RETAIL BANKING IN INDIA

All round increase in economic activity Increase in the purchasing power. The rural areas have the large purchasing power at their disposal and this is an opportunity to market Retail Banking.
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India has more than 200 million households and 400 million middleclass population and
more than 90% of the savings come from the house hold sector. Falling interest rates have resulted in a shift. Now People Want To Save Less And Spend More. Nuclear family concept is gaining much importance which may lead to large savings, large number of banking services to be provided are day-by-day increasing. Tax benefits are available for example in case of housing loans the borrower can avail tax benefits for the loan repayment and the interest charged for the loan.
ADVANTAGES
AND
DISADVANTAGES
OF
RETAIL BANKING
Traditional lending to the corporate are slow moving along with high NPA risk, treasure profits are now loosing importance hence Retail Banking is now an alternative available for the banks for increasing their earnings. Retail Banking is an attractive market segment having a large number of varied classes of customers. Retail Banking focuses on individual and small units. Customize and wide ranging products are available. The risk is spread and the recovery is good. Surplus deployable funds can be put into use by the banks. Products can be designed, developed and marketed as per individual needs.
ADVANTAGES
Retail banking has inherent advantages outweighing certain disadvantages. Advantages are analyzed from the resource angle and asset angle.
RESOURCE SIDE
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Retail deposits are stable and constitute core deposits. They are interest insensitive and less bargaining for additional interest. They constitute low cost funds for the banks. Effective customer relationship management with the retail customers built a strong customer base. Retail banking increases the subsidiary business of the banks.
ASSETS SIDE Retail banking results in better yield and improved bottom line for a bank. Retail segment is a good avenue for funds deployment. Consumer loans are presumed to be of lower risk and NPA perception. Helps economic revival of the nation through increased production activity. Improves lifestyle and fulfils aspirations of the people through affordable credit. Innovative product development credit. Retail banking involves minimum marketing efforts in a demand driven economy. Diversified portfolio due to huge customer base enables bank to reduce their dependence on few or single borrower Banks can earn good profits by providing non fund based or fee based services without deploying their funds.
DISADVANTAGES
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Designing own and new financial products is very costly and time consuming for the bank. Customers now-a-days prefer net banking to branch banking. The banks that are slow in introducing technology-based products, are finding it difficult to retain the customers who wish to opt for net banking. Customers are attracted towards other financial products like mutual funds etc. Though banks are investing heavily in technology, they are not able to exploit the same to the full extent. A major disadvantage is monitoring and follows up of huge volume of loan accounts inducing banks to spend heavily in human resource department. Long term loans like housing loan due to its long repayment term in the absence of proper follow-up, can become NPAs.
The volume of amount borrowed by a single customer is very low as compared to
wholesale banking. This does not allow banks to exploit the advantage of earning huge profits from single customer as in case of wholesale banking.
FACTORS AFFECTING CUSTOMERS CHOICE OF RETAIL BANKING

This paper attempts to analyze the factors that affect the choice of customers in choosing the retail banks by the customers. The study involves a survey of 1000 bank customers using questionnaire as the research instrument, augmented with informal interviews of the customers and also makes thorough use of the information available on the internet. In the study, the authors have tried to identify various factors and also analyzed as to which of these factors exert the greatest, moderate and relatively lower influence as choice criteria. It is an
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attempt to study the consumer behavior with respect to the peoples choice of retail banks. Efforts are made to dwell deep in the psychology by talking to the customers surveyed, where ever possible. The 15 different factors that could be identified, approximately in the order of their importance, are Safety of Deposits. Size and Strength. Accuracy. General Service Quality. Speed of Delivery. Proximity. Security of Environment. Cordiality of Staff. Price and Service Charges. Product Packaging. General Public Impression. Peer Group Impression. Face Lift (Structural). Friendship with Staff. Advertisement and Publicity. According to the findings, based on the empirical study, the first six factors exert the greatest influence, next four have moderate importance, and the rest five have relatively lower influence. Thus, retail banks must reorganize their activities to achieve their corporate mission through customer orientation. In the competitive and capitalistic markets consumer is sovereign and therefore the bankers must reengineer their view and recognize the predilection and tang of the retail customers.
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STRATEGIES FOR INCREASING RETAIL BANKING BUSINESS
Constant Product Innovation To Match The Requirements Of The Customer Segments

The customer database available with the banks is the best source of their demographic and financial information and can be used by the banks for targeting certain customer segments for new or modified product. The banks should come out with new products in the area of securities, mutual funds and insurance.
Quality Service And Quickness In Delivery Impact Of Reserve Bank Policies On Retail Banking.
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As most of the banks are offering retail products of similar nature, the customers can easily switchover to the one, which offers better service at comparatively lower costs. The quality of service that banks offer and the experience that clients have, matter the most. Hence, to retain the customers, banks have to come out with competitive products satisfying the desires of the customers at the click of a button.
Introduction Of New Delivery Channels

Retail customers like to interface with their bank through multiple channels. Therefore, banks should try to give high quality service across all service channels like branches, Internet, ATMs, etc.
Detail Market Research

Banks may go for detail market research, which will help them in knowing what their competitors are offering to their clients. This will enable them to have an edge over their competitors and increase their share in retail banking pie by offering better products and services.
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Cross-Selling Of Products
PSBs have an added advantage of having a wide network of branches, which gives them an opportunity to sell third-party products through these branches.
Business Process Outsourcing

Outsourcing of requirements would not only save cost and time but would help the banks in concentrating on the core business area. Banks can devote more time for marketing, customer service and brand building. For example, Management of ATMs can be outsourced. This will save the banks from dealing with the intricacies of technology.
Bank Have To Take Initiatives.
The growth in retail banking has been facilitated by growth in banking technology and automation of banking processes to enable extension of reach and rationalization of costs. ATMs have emerged as an alternative banking channels which facilitate lowcost transactions vis--vis traditional branches / method of lending. It also has the advantage of reducing the branch traffic and enables banks with small networks to offset the traditional disadvantages by increasing their reach and spread.
The interest rates on retail loans have declined from a high of 16-18%in 1995-96 to presently in the band of 7.5-9%. Ample liquidity in the banking system and falling global interest rates have also compelled the domestic banks to reduce interest rates of retail lending.
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Banks could afford to quote lower rate of interest, even below PLR as low cost [saving bank] and no cost [current account] deposits contribute more than 1/3rd of their funds [deposits].The declining cost of incremental deposits has enabled the Banks to reduce their interest rates on housing loans as well as other retail segments loans.
Easy and affordable access to retails loans through a wide range of options / flexibility. Banks even finance cost of registration, stamp duty, society charges and other associated expenditures such as furniture and fixtures in case of housing loans and cost of registration and insurance, etc. in case of auto loans.
Offering retail loans for short term, 3 years and long term ranging term ranging from 15/20 years as compared to their earlier 5-7 years only. Making financing attractive by offering free / concessional / value added services like issue of credit card, insurance, etc. Continuous waiver of processing fees / administration fees, prepayment charges, etc. by the Banks. As of now, the cost of retail lending is restricted to the interest costs.
CHALLENGES TO RETAIL BANKING IN INDIA

The issue of money laundering is very important in retail banking. This compels all the banks to consider seriously all the documents which they accept while approving the loans. The issue of outsourcing has become very important in recent past because various core activities such as hardware and software maintenance, entire ATM set up and operation (including cash, refilling) etc., are being outsourced by Indian banks.
Banks are expected to take utmost care to retain the ongoing trust of the public and give
them good banking facilities. Customer service should be at the end all in retail banking. Someone has rightly said, It takes months to find a good customer but only seconds to lose one. Thus, strategy of Knowing Your Customer (KYC) is important. So the banks are required to adopt
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innovative strategies to meet customers needs and requirements in terms of services/products etc. The dependency on technology has brought IT departments additional responsibilities and challenges in managing, maintaining and optimizing the performance of retail banking networks. It is equally important that banks should maintain security to the advance level to keep the faith of the customer. The efficiency of operations would provide the competitive edge for the success in retail banking in coming years.
T. he customer retention is of paramount important for the profitability in Retail Banking
business, so banks need to retain their maximum customer in order to increase the market share. One of the crucial impediments for the growth of this sector is the acute shortage of manpower talent of this specific nature, a modern banking professional, for a modern banking sector. If all these challenges are faced by the banks with utmost care and deliberation, the Retail Banking is expected to play a very important role in coming years, as in case of other nations.
VARIOUS RATES AND OBSERVATION

in 2008-2009
In % 1st Quarter Bank Rate Cash Reserve Ratio (CRR) Statutory Liquidity Ratio (SLR) 6 9 25 2nd Quarter 6 6.5 24 3rd Quarter 6 5 24
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Repo Rate (RR) Reverse Repo Rate (RRR)
9 6
8 6
5.5 4
In 2009-2010
In % 1st Quarter Bank Rate Cash Reserve Ratio (CRR) Statutory Liquidity Ratio (SLR) Repo Rate (RR) Reverse Repo Rate (RRR) 6 5 25 4.75 3.25 2nd Quarter 6 5 24 4.75 3.25 3rd Quarter 6 5.75 24 4.75 3.25
In 2010-2011
In % 1st Quarter Bank Rate Cash Reserve Ratio (CRR) Statutory Liquidity Ratio (SLR) Repo Rate (RR) Reverse Repo Rate (RRR)
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2nd Quarter 6 6 24 6.25 5.25
3rd Quarter 6 6 25 6.5 5.5
6 6 25 5.75 4.5
Chart 1: Chart which showing bank rate difference in different years i.e. 2008-09, 2009-10 and
2010-11.
Observations:
Now if we analyze the last three years data it can be predicted that Bank Rate never change
in last three years, it stable on 6 %. This is good sign for Retail Banking. If the Bank Rate increases then it affect the liquidity.
Chart 2- Chart which showing Cash Reserve Ratio (CRR) difference in different years i.e. 200809, 2009-10 and 2010-11.
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Observation
Now if we analyze the last three years data it can be predicted that Cash Reserve Ratio
fluctuated in every year and every quarter.

Cash reserve Ratio is highest in 1st Quarter of 2008-2009 and then some time it decreases
and some time it increases.
Some time Cash Reserve Ratio increases and some time it decreases so the Reserve Bank maintain a certain amount of liquidity in the market and worked for control the inflation in the market.
Chart 3- Chart which showing Statutory Liquidity Ratio (SLR) difference in different years i.e.
2008-09, 2009-10 and 2010-11.
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Observation
Now if we analyze the last three years data it can be predicted that in 2008-2009 and 2009-
2010 the Statutory liquidity Ratio is 25 % in 1st Quarter and 24 % in 2nd Quarter and 3rd Quarter.
In 2010-2011 the Statutory liquidity Ratio 24 % in 2nd Quarter and 25 % in 1st and 3rd
Quarter. Reserve Bank some time increases and some time decreases because of maintain the liquidity in the market.
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Chart 4- Chart which showing Repo Rate (RR) difference in different years i.e. 2008-09, 200910 and 2010-11.
Observation
Now if we analyze the last three years data it can be predicted that Repo Rate is very high
in 2008-2009 in 1st Quarter it is 9 %, in 2nd Quarter it is 8 % and 5.5 % in the 3rd Quarter and it 4.75 % in 2009-2010 in all the three Quarters. In Repo Rate Reserve Bank buy securities from the commercial banks if Repo Rate increases then it is beneficial for the commercial banks and as well as for customers. In
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2010-2011 Repo Rate increases and reached to 6.5 %. So commercial banks get good return on its security.
Chart 5- Chart which showing Reverse Repo Rate (RRR) difference in different years i.e. 200809, 2009-10 and 2010-11.
Observation
Now if we analyze the last three years data it can be predicted that Reverse Repo Rate is
high in 2008-2009 in 1st and 2nd Quarter it is 6 % and 4 % in the 3rd Quarter and it 3.25 % in 2009-2010 in all the three Quarters.
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In Reverse Repo Rate Reserve Bank sale securities to commercial banks, if Reverse Repo
Rate increases then it is not beneficial for commercial bank because commercial bank give more interest to Reserve Bank. In 2010-2011 Reverse Repo Rate increases and reached to 5.5 % in the 3rd Quarter. So commercial banks give more interest and it is not beneficial for the commercial banks as well as customers.
IMPACT OF RESERVE BANK POLICIES ON RETAIL BANKING
There are some Reserve Bank policies and factors which affect the Retail Bank policies. Retail Banking totally depends on policies implement by the Reserve Bank are under following:1. Bank Rate. 2. Cash Reserve Ratio (CRR). 3. Statutory Liquidity Ratio (SLR). 4. Repo Rate (RR). 5. Reverse Repo Rate (RRR).
These are the main factors which affect the Retail Banking and Reserve Bank of India change above factors time to time to maintain Liquidity position in market. If the liquidity is more in market or customers hand then Reserve Bank increases those factors and suck the Liquidity from the market and other side if Liquidity position is not good in the market then Reserve Bank puts the Liquidity in the market and maintain the market position.
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FINDINGS
With recession departing away from away global economy, opportunities are slowly emerging in emerging markets. Since emerging markets, except China, were less depending upon US for growth; are first to come out of recession eclipse. Growth opportunities in banking, especially retail segment is set to witness fast growth due to high consumption. The higher growth of retail lending in emerging economies is attributable to fast growth of personal wealth, favorable demographic profile, rapid development in information technology, the conducive macro-economic environment, financial market reforms, and several micro-level supply side factors. The retail banking strategies of banks are undergoing major transformation, as banks adopt a mix of strategies like organic growth, acquisitions and alliances. This has resulted in a paradigm shift in the marketing strategies of the banks. Public Sector Banks players are adopting aggressive strategies, leveraging their rural branch network and their customer vase to earn a larger share of the retail pie. Banks are also going in for innovative strategies like cross selling, packaged selling of retail products and technology based banking. At the same time, new foreign players are also entering this high growth sector.
Impact of Reserve Bank Policies On Savings

Reserve Bank policies affect the savings some time savings are increases and some time it decreases. Savings are totally depends on Reserve Bank Policies, it can change according to the policies. So Reserve Bank change policies time to time to attract the customers and potential customers. There are some findings related above three years data as under following:-
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According to the data every year and every quarter Reserve Bank change the policies to attract the customers and encourage them to increase the savings, and to stable the market conditions and control the inflation.
In above three years data in 2008-2009, 2009-2010 and 2010-2011 in every quarter Reserve
Bank stable the Bank Rate in 6 %. In last three years Reserve Bank fix the Bank Rate 6 % and in 2010-2011 the Cash Reserve Ratio is also 6 %.
If the Reserve Bank increases Bank Rate then it affect the savings because it indirectly
affect the customer. After the increment in Bank Rate Commercial Bank gets money from Reserve Bank in high rate of interest, it affects the saving because interest on savings is less so customers do not want to deposit more and more money in the banks so they switch to other beneficial products.
According to table Repo Rate and Reverse Repo Rate increasing 2010-2011in comparison
to 2009-2010 so bank have to purchase securities in high interest rate which is beneficial for the commercial banks and as well as customers and reserve Bank sale the security in high interest rate which affects the liquidity, it affects the savings because bank gives low interest on savings and Fixed Deposits. In 2009-10 Repo Rate was 4.75 % in all the three Quarters and in 2010-2011 Repo Rate is 5.75 % in 1st Quarter, 6.25 % and 6.5 % in 2nd and 3rd quarter. So the Reserve Bank increases Repo Rate in 2010-2011 in comparison to 20092010. So it attracts savings and that time Reserve Bank pushes the liquidity in the market or to put the liquidity into customers hand and attract them to increase saving.
Statutory Liquidity Ratio fluctuating in every quarter. In 2008-2009 SLR was 25 % in 1st
Quarter and 24 % in 2nd and 3rd Quarter, and in 2010-2011 Reserve Bank increases SLR 24 % to 25 % and in 2nd Quarter Reserve Bank decreases SLR to 24% to attract the customers and to through the liquidity in the market and in 3rd Quarter again Reserve Bank increases SLR to 25 %. Reserve Bank increases it to stable the liquidity in the market. If the Reserve Bank did not increase all the rates then at one time inflation takes place in the market.
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If the Bank Rate, Cash Reserve Ratio, Statutory Liquidity Ratio, Repo Rate and Reverse
Repo Rate increases then Commercial Banks get money in high interest rate and banks have less liquidity, so banks decreases the interest rate on Savings. Earlier (5-6 years ago) the interest on Savings was more than 5 % per annum and interest on Fixed Deposits and Time Deposits is more but now in 2010-2011 interest on Savings decreases and now it is 3.5-3.75 % per annum and interest on Fixed Deposits and Time Deposits also decreases, and interest rate depends on different banks policy and it started with 5 % per annum and increases according to time duration like 365 days, 500 days 730 days, 1000 days Fixed Deposits. In 2008-09, saving in Current Account, Saving Account and Term Deposit Account is 12 %, 23.3 % and 64.7% respectively, of the total deposit reported by the banks.
Earlier the interest rate on Government Provident Fund was 9.5 % but now it is 8 %
because of increment in Bank rate, Repo Rate, Reverse Repo Rate, Statutory Liquidity Ratio and Cash Reserve Ratio. So it also affects the investment in Government Provident Fund, and it also affects the Public provident Fund.
Total share of Current Deposit, as on March 31- 2009 registered 1.5 % points decline over
the position a year ago. Share of Saving Account there is no increment or decrement it remained same both the years. Term deposit increased by 1.9 % points over the position a year ago. So we can say Reserve Bank is able to attract the customer and encourage them to invest.
So if the Reserve Bank increases Bank Rate in high percentage then interest on deposit
Bank decrease because Bank have to give more interest to Reserve Bank and Banks do not have so much liquidity so bank charge this interest to customers, which decreases the savings.
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Impact On Loans.
Reserve Bank Policies affect loan sector so much, because little bit fluctuation in Bank Rate, Cash Reserve Ratio, Statutory Liquidity Ratio, Repo Rate and Reverse Repo Rate affect loan sector. I am taking mainly two type of loans- Home Loan and Education Loan but I also show the impact of Reserve Bank Policies on complete loan sector. There are some points which shows Reserve Bank Policies affect on Loan sector as under following:-
There is a table which shows Education Loan figure in crore, taken by people in different years as under. As on March Number 31. 2004 2005 2006 2007 2008 2009 Accounts. 3,19,337 4,68,207 6,79,945 9,44,397 12,46,870 16,03,385 Of Amount Outstanding crore). 4,550 6,713 10,012 14,283 19,817 27,646 32,367 46.62 45.22 38.89 32.03 28.59 6.96 47.54 49.14 42.65 38.55 39.55 17.08 Year On Year Growth (in %). (in In Account. In Amount.
As on 30 Sep 17,15,016 2009
For the year 2009-2010, data is available only as on 30 Sep 2009.

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The scheme was subsequently modified in 2004 and guidelines for the Revised Model Educational Loan Scheme were issued in August, 2004 by the Indian Banks Association (IBA). Based on recommendations of a Working Group and also suggestions of the Government, the Scheme was again modified in 2007-08.
Enhancement of quantum of finance from maximum of Rs.7.5 lacs to maximum of Rs.10
lacs for studies in India and from maximum of Rs.15 lacs to maximum of Rs.20 lacs for studies abroad.
The total outstanding loans of Public Sector Banks (PSBs) for education as on 31st March,
2009 stood at Rs.27,646 crore, in 16,03,385 accounts. The increase in total loans outstanding over previous year in absolute and percentage terms was Rs.7,829 crore and 39% respectively.
Year-wise break-up of education loans outstanding as on March 31, 2004 to as on March
31, 2009 is shown in the mentioned table. Table shows the increment in the Education loan in every year.
According to the table Education Loan increases every year continuously from 2004 to
2009, it is good indication for Indian Retail Banking Industry. In 2007, 2008 and 2009 the Education Loan account were respectively 9,44,397, 12,46,870 and 16,03,385 and outstanding amount was respectively 14,283, 19,817 and 27,646 crore. The increment in accounts respectively 32.03 % and 28.59 % and in the amount respectively 38.55 % and 39.55 %. According to the table Bank Rate, Cash Reserve Ratio, Statutory Liquidity Ratio, Repo Rate and Reverse Repo Rate decreases in 2009-10 in comparison to 2008-09. So in that time Education Loan Increases 27,646 crore to 32,367 crore (till Sep 2009).
All rates increases in 2010-2011 in comparison to 2009-2010, but it not affect so much,
because Reserve Bank did work for increase the education level and provide the benefits to students. According to Reserve Bank rule those students whose family income is less the Rs. 4,50,000 get education loan interest free. So it increases Education Loan because those who want to study but do not have money they can read. So we can say thats why Education Loan increases and these rates not affect so much.
While your credit score and loan options are personal factors, there are also national factors at play affecting the cost of your loan. The national prime rate is set by the Federal
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Reserve to control the supply of money in the economy. When the rate is low, your loan will typically be cheaper, and vice versa. Ultimately, though, low rates can also signify a recession or slow economy, which may make your rates more expensive. People with bad credit will be more affected by swings in the national prime interest rate. In general, people with bad credit are better off taking loans in a strong economy.
Interest rates on home loans depend on both the national and personal factors. During a
recession, the prime rate tends to go down, making most home loans more affordable for the customer.
All the rates (changes Bank Rate, Cash Reserve Ratio, Statutory Liquidity Ratio, Repo Rate
and Reverse Repo Rate) increases in 2010-2011 in comparison to 2009-2010 it affects Housing Loan little bit, but Reserve Bank makes policies which are beneficial for the customers and the interest on Home Loan not increased so much. Bank Rate is 6 % in all the three years. If the Bank Rate increases then it affect the customers because in this situation commercial Banks get loan in high interest rate. So the Bank provide loan in high interest rate and maintain particular percentage of liquidity in the market.
In 2008-09 Reserve Bank increases the Cash Reserve Ratio (9 % in 1st Quarter, 6.5 % in 2nd
Quarter and 5 % in third Quarter) to control to flow of cash in the market. Reserve Bank increases Cash Reserve Ratio because in that time inflation increases and recession takes place in the market.
In the Repo Rate Reserve Bank buy the securities from the commercial banks. In 2008-
2009 is very high in first two quarters respectively 9 % and 8 % but after that it decreases in last Quarter to 5.5 % and then in 2009-2010 Reserve Bank decreases Repo Rate to 4.75 % in all the Quarters because inflation takes place and liquidity percentage increases in the market or unnecessary Liquidity flowing in the market. So in that time interest on loan increases and in 2010-2011 the Repo Rate increases and reached 6.5 % in 3rd Quarter, it is beneficial for the commercial banks and the customers.
All the rates (Bank Rate, Cash Reserve Ratio, Statutory Liquidity Ratio, Repo Rate and
Reverse Repo Rate) of Reserve Bank Policies increases highly it affect the liquidity. So Reserve Bank maintains the particular amount of liquidity in the market.
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For example (we are taking current rates): If bank have 100 rupees. Statutory Liquidity Ratio - 25 % Cash Reserve Ratio Bank Rate Repo Rate Reverse Repo Rate -6% -6% - 6.5 % - 5.5 %
In this situation if bank have 100 rupees then bank have to deposit Rs. 31 into the Reserve Bank in form of cash, bonds, gold and securities and bank take loan from Reserve Bank at the rate of 6 % and bank have Rs. 69 to deal with the customers. Another side if Cash Reserve Ratio -8%
Statutory Liquidity Ratio - 28 %
In this situation bank have to deposit Rs. 36 into the Reserve Bank and banks have Rs. 64 to deal with the customers. So in this situation commercial bank increase the interest rate of loan which affect the customer and also loan sector. It affects the Retail Banking. So Reserve Bank maintain a particular amount of cash in the market, if the cash position is increases in the market then Reserve Bank increases the rates and suck the liquidity from the market and other side if the cash position decreases then Reserve Bank put the Liquidity in the market.
Impact On Mutual Fund

Reserve Bank Policies also affect the Mutual Fund because little bit fluctuation in Bank Rate, Cash Reserve Ratio, Statutory Liquidity Ratio, Repo Rate and Reverse Repo Rate affect the Mutual Fund, apart Reserve Bank Policies there are many other factors which affect the Mutual Fund.
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Little bit information or statement given by government and Reserve Bank it affect the Mutual Fund. There are some points which shows Reserve Bank Policies affect on Mutual Fund as under following: In Mutual Fund Commercial Banks attract the investors and pools money from them and
Commercial Banks buy (invest in) bonds, securities, shares and other securities. Mainly Commercial Bank invests in U-lip shares and if any loss is occurs it will bear by the investors.
If the Reserve Bank Policies support the Mutual Fund then Mutual Fund give good return to
the investor and attract them to invest in Mutual Fund. There is a view that if you are investing in Mutual Fund then the invested amount will be doubled within 3-4 years. Average rate of return is the main reason which attracts the investors to invest in Mutual Fund.
During 2008-2009 the investment of Scheduled Commercial Banks in Mutual Fund
increased by 22.8 % in compared with 23.7 % in 2007-2008. So it is good result for Commercial Banks and it shows the plus point of Mutual Fund and attracts the customers to invest in Mutual Fund.
The demand of the shares, bonds and securities affect the investment. If the Mutual Fund giving good average rate of return then it attracts the investors and investors want to purchase the shares, bonds and securities. So it is beneficial for the company and also beneficial for the investors.
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Reserve Bank Policies affect the Mutual Fund. If the Reserve Bank increases Cash Reserve
Ratio and Statutory Liquidity Ratio then it affect the savings of investors. So the investment in Mutual Fund decreases because if Reserve Bank increases Cash Reserve Ratio and Statutory Liquidity Ratio then Reserve Bank sucks the liquidity from the market and the investors hand and it affect investment because the supply of the shares, bonds and securities of different companies is fix and investor do not have so much money to purchase. So the investment in Mutual Fund decreases and other side if the CRR and SLR decrease then liquidity comes in investors hand and they are able to invest in shares, bonds and securities of different companies. So the investment in Mutual fund increases.
The investment in Mutual Fund decreases in 2009-2010. In 2008-2009 the investment in Mutual Fund was Rs. 23,49,347 lacs and the investment in 2009-2010 was Rs. 11,59,651 lacs. Investment in Mutual Fund decreases because in that time inflation is very high and inflation in 2 digits.
Apart the Reserve Bank Policies recession and inflation are another factor which affect the
Mutual Fund and the investment in Mutual Fund decreases because investors are not ready to invest in Mutual Fund because they know that average rate of return on investment is not good. So it affects the investment in Mutual Fund and the investment decreases.
Any statement given by the Prime Minister, Finance Minister or Government and monsoon
also affect the Mutual fund. It decreases the price and dividend of Mutual Fund. So investors withdrawing their money and not ready to invest more money. So it decreases the investment in Mutual Fund.
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If the Bank Rate and Reverse Repo Rate increases then it sucks the liquidity from the
market and investors hand and it affect those investors who purchase Mutual Fund after taking the loan it affect because the interest on loan increases. So the investors are not ready to take loan in high interest rate. So the investment in Mutual Fund decreases because the potential investors are not ready to invest in Mutual Fund.
Mutual funds offer several advantages over investing in individual stocks. For example, the
transaction costs are divided among all the mutual fund shareholders, which allows for costeffective diversification. Investors may also benefit by having a third party (professional fund managers) apply expertise and dedicate time to manage and research investment options, although there is dispute over whether professional fund managers can, on average, outperform simple index funds that mimic public indexes. So it increases the investment in Mutual Fund.
SUGGESTATION
There is need to review and amended the provisions of RBI Act, Banking Regulation Act,
State Bank of act etc so as to bring them on same line of current banking needs.
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Government should consider raising the Retail Banking sector and to improve the inherent
strength of banks and to improve their risk taking ability.
Commercial Banks have to provide good quality of service to its customers and encourage them to invest in their banks and help to increase Retail Banking sector in India.
Reserve Bank have to maintain certain level of liquidity in the market and investors hand
and encourage them to invest it Mutual Fund and to increase savings in different accounts like Current Account, Saving Account and Term Deposit Account and make the Retail Banking customer oriented.
Reserve Bank has to decrease different rates and attract the customers. If the rates decrease
then the interest on loan decreases, so it attracts the customer to purchase the different type of loan.
Commercial Banks have to decrease the interest on loan and increase the interest on saving.
If the Commercial Banks are able to do, so it attracts the customers. So it increases saving and help to increase the Retail Banking.
Commercial Banks have to give complete information to its customers related to Retail Banking Products. If the customers are aware about Retail Banking Products, so they increase the Retail Banking Business in India.
Reserve Bank Policies indirectly affect the common men because if Reserve Bank increases
Bank Rate and Reverse Repo Rate so it affects the customers because the interest on loan increases and interest on saving decreases. Reserve Bank has to make sound Policy which does not affect more common men as well as Commercial Banks. So people invest more in Retail Banking Products and the Retail Banking Business increases
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Retail banking is the fastest growing sector of the banking industry with the key success by attending directly the needs of the end customers is having glorious future in coming years. Retail banking sector as a whole is facing a lot of competition ever since financial sector reforms were started in the country. Walk-in business is a thing of past and banks are now on their toes to capture business. Banks therefore, are now competing for increasing their retail business. There is a need for constant innovation in retail banking. This requires product development and differentiation, micro-planning, marketing, prudent pricing, customization, technological up gradation, home / electronic / mobile banking, effective risk management and asset liability management techniques. However, the kind of technology used and the efficiency of operations would provide the much needed competitive edge for success in retail banking business. Furthermore, in all these customer interest is of chief importance. The banking sector in India is representing this and I do hope they would continue to succeed in this traded path. At the last I would like to say, that if Reserve Bank change its Policies and all the rates (Bank Rate, Cash Reserve Ratio, Statutory Liquidity Ratio, Repo Rate and Reverse Repo Rate) increases in high percentage then it affects the Retail Banking Products like affects Saving, Loan sector and Mutual Fund because Reserve Bank sucks liquidity in customers hand, so they do not have money to invest. But if the Reserve Bank only increases Repo Rate then it is beneficial for the Commercial Banks as well as customers because Reserve Bank buy Securities in high rate. So liquidity comes in Commercial Banks.
BIBLIOGRAPHY
Books
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Kothari C.R., Research Methodology, Methods of Techniques,2nd edition: Wiley Eastern;
4th reprint 1993.

Dr. Sethuraman., Retail Management for IIBF (Indian Institute of Banking and Finance),
Macmillan.
Cherunilam Francis., Business Environment, 19th edition; Himalaya Publication House
2009.
Annual Reports And Magazines

Reserve Bank of India Bulletin Volume LXV Number, Jan 2011.
Annual Report of Financial Year 2008-2009 and 2009-2010 of Ministry Of Commerce. Business India magazine. Economic Times and Business Line newspaper.
Internet Source
http://www.finamin.nic.in/the_ministry/dept_eco_affairs/index.html
http://.www.ccsenet.org/ijbm
http://.www.careratings.com http://.www,bulletin.rbi.org.in http://.www.bankreport.rbi.org.in http://.www.annualreport.rbi.org.in

http://.www.banknetindia.com/banking/ubfeature.htm:retail Banking. www.answers.com/topic/retail-banking:
http://.www.ccsenet.org/ijbm
http://.www.em.wikipedia.org/wiki/file:scheduled_structure_in_india. 72
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Dissertation Report

Impact of Reserve Bank Policies on Retail Banking

(Post Graduate Diploma in Management) IILM- COLLEGE OF MANAGEMENT STUDIES,

Submitted To Prof. Inderpreet

Submitted By Akash Goyal

IILM COLLEGE OF MANAGEMENT STUDIES

of Reserve Bank Policies on

Retail Banking is the bonafide work of Akash Goyal

HEAD OF THE DEPARTMENT

Impact Of Reserve Bank Policies On Retail Banking.

Impact Of Reserve Bank Policies On Retail Banking.

Banking Structure In India Indian Banking System

Impact Of Reserve Bank Policies On Retail Banking.

10. 11. 12.

Impact Of Reserve Bank Policies On Retail Banking.

Impact Of Reserve Bank Policies On Retail Banking.

OBJECTIVES OF THE STUDY

Impact Of Reserve Bank Policies On Retail Banking.

Type of the Research

Conclusion & Recommendation.

Type Of The Research

Impact Of Reserve Bank Policies On Retail Banking.

Interpretation & Recommendation

SCOPE OF THE PROJECT

Impact Of Reserve Bank Policies On Retail Banking.

LIMITATIONS OF THE STUDY

considered as primary data. Time constraint.

According to Official Secret Act banks not provided important data.

Impact Of Reserve Bank Policies On Retail Banking.

Impact Of Reserve Bank Policies On Retail Banking.

Impact Of Reserve Bank Policies On Retail Banking.

Impact Of Reserve Bank Policies On Retail Banking.

Impact Of Reserve Bank Policies On Retail Banking.

HISTORY OF BANKING IN INDIA

Impact Of Reserve Bank Policies On Retail Banking.

Post Liberalization Era.

Impact Of Reserve Bank Policies On Retail Banking.

Impact Of Reserve Bank Policies On Retail Banking.

Impact Of Reserve Bank Policies On Retail Banking.

3) Post-Liberalization Era--Thrust on Quality and Profitability

Impact Of Reserve Bank Policies On Retail Banking.

Impact Of Reserve Bank Policies On Retail Banking.

BANKING STRUCTURE IN INDIA

Impact Of Reserve Bank Policies On Retail Banking.

INDIAN BANKING SYSTEM

State co-op Banks

Central co-op Banks and Primary Cr. Societies

Impact Of Reserve Bank Policies On Retail Banking.

Public Sector Banks

Private Sector Banks

HDFC, ICICI etc.

State Bank of India and its Subsidiaries

Other Nationalized Banks

Regional Rural Banks

BROAD CLASSIFICATION OF BANKS IN INDIA

1) Public Sector Banks:

Impact Of Reserve Bank Policies On Retail Banking.

Impact Of Reserve Bank Policies On Retail Banking.

Impact Of Reserve Bank Policies On Retail Banking.

RESERVE BANK OF INDIA

The Bank was constituted to:

Impact Of Reserve Bank Policies On Retail Banking.