Page 147 - DMGT303_BANKING_AND_INSURANCE

Banking and Insurance

Notes Customized and Wide ranging Products
Technology based banking
Thrust on Marketing/Relationship

Retail Lending vis-a-vis Retail Banking

In retail lending an attractive market segment like wholesale banking

Retail Banking has wider connotation; it also include designing, developing and marketing
of customized products/services
Wide and Customized products for both sides of B/S in retail lending.

Retail lending is one part of Retail Banking
Why Retail lending ?

Risk Dispersion
Good Recovery %
Increased competition: Untapped potential
Lower NPAs: Assured Income stream

Surplus deployable funds
Availability of Technology
Higher Spread (Risk vs Return)

Composition of Retail Lending

All round increase in Economic activity
Increase in Purchasing power

India has 200 million households and 400 million middle class population
More than 90% savings come from Household sector
Falling interest regime resulted in shift: Now people wants to save less

Scope for Retail Lending

Nuclear families concept gaining ground
Tax benefits available

Traditional lending to corporate sluggish/High NPA risk
Treasury profits losing shine
Only 18% of the potentials exploited so far; HL constitutes only 5.6%, personal loans 4.2%,
consumer loans 1.1% of total bank lending

Channels for Retail Lending

Premises banking
ATMs

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