Good PPT on banks

1. STRATEGIES BY RETAIL BANK TO
VENTURE IN RURAL MARKET
A PRESENTATION

2. AGENDA
• INDIAN BANKING INDUSTRY
• RETAIL BANKING
• RURAL BANKING
• SUGGESTION &
RECOMMENDATIONS

3. INDIAN BANKING INDUSTRY

4. INDIAN BANKING SECTOR
• Focus on Customer service
• The hardening of bond yields will have negative impact on Q4FY10
results of banks especially PSU banks.
• Focus on KYC Norms
• Structural improvement in the CASA.
• New players in the banking sector .
• At end-March 2010, 50.6 million no-frills
accounts were opened by the banking system.

5. RETAIL BANKING IN INDIA

6. KEY FACTORS DRIVING THE
GROWTH OF RETAIL BANKING
• Focus on understanding customer needs or preferences
• Customer-specific products or offerings on a regular basis
• Improved processes and bundled product offering
• Any where, any time banking
• Faster service
• Customer-driven strategies

7. SCOPE FOR RETAIL BANKING IN
INDIA
• Increase in economic activity
• Increase in the purchasing power.
• India has 200 million households and 400 million middleclass
population
• Nuclear family concept is gaining much importance

8. STRATEGIES FOR INCREASING
RETAIL BANKING BUSINESS
• Constant product innovation
• Quality service and quickness in delivery
• Introduction of new delivery channels
• Tapping of unexploited potential
• Infrastructure outsourcing
• Detail market research
• Cross-selling of products
Future

9. RURAL BANKING –
THE CURRENT STATUS

10. THE CURRENT STATUS
• Started since the establishment of banking sector in India.
• Mainly focus upon Agro sector
• There are 32,528 rural bank offices and 20,771 semi-urban bank
offices in the country
• SBI and NABARD
• Rural population of about 780 million has limited access .
• Current demand for credit in rural India is around Rs. 1, 50,000 Cr.
• Commercial bank branches cover only 7 % of rural sector
and large market is still untapped.

11. SUGGESTIONS &
RECOMMENDATIONS

12. MARKET SEGMENTATION
• Geographic segmentation.
▫ Rural market
• Demographic segmentation.
▫ Male – Female
▫ 18 – 60 years
▫ Literate & Illiterate
• Psychographic Segmentation.
▫ People looking for savings
• Behavioural segmentation.
▫ Loans
▫ Financial help.

13. NEED OF THE RURAL MARKET

14. PORTER’S FIVE FORCE MODEL
Bargaining power
of customers Threat of new
entrants
Switching to another
product is simple High fixed costs
Customers are price Government
sensitive restrictions or
legislation
Customized products
Industry rivalry
Improving product
differentiation
Creatively using channel of
Bargaining power distribution
Threat of
of suppliers High Exit Barriers substitute product
The product is Microfinance
extremely important institution
to buyers
SHG’s
There are
no substitutes

15. WHAT IS NEEDED FROM THE BANKS?
• More financial inclusion
• Micro credit / SHG’s
• Use of technology
• Alternate Distribution channels
• To extend banking services at customers convenience
• Improvement in service levels in rural area

16. WHAT IS NEEDED FROM THE
GOVERNMENT?
• An authority for Rural Banking
• Road map
• Establish open standard for technology to be used
• Financial literacy and credit counselling.
• Strategic action plan for remittance facility for both
inter banking/ intra bank and post office

17. STEPS TO BE TAKEN
• Expand reach
▫ Tie up with India post.
▫ Partner with NGO/ MFI.
• Kiosk banking.....Offer convenience
▫ Banking services at mini branch.
▫ Making kiosk.
▫ The bio metric authentication.
▫ Improved business.

18. STEPS TO BE TAKEN
• Educate customers
• Be cost effective
▫ Low cost ATM.
▫ Costs just 1/ 10th that of the traditional ATM.
▫ Transfer of funds from NREGA.
▫ e – governance model
• Innovate and adopt technology
▫ Smart cards, biometrics scanning
▫ Improve the service delivery.

19. STEPS TO BE TAKEN
• Focus on microfinance
▫ 40% in priority sector lending
▫ MFI lending provides 10-14 % return as against 6-7 % in
government instruments