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  • 1. 1Chapter 6Retail and Wholesale Banking
  • 2. Retail Banking In pre-liberalisation era, banks mainly focused onproviding credit to industries and business houses With the liberalisation of Indian economy, bank sawa emerging opportunities in terms of youngpopulation, increased incomes, purchasing powerand aspiration for better life style, quality productsand services This gave birth to ‘Retail Banking’……..2
  • 3. Contd…. Retail Banking is defined as doing business withindividuals by segmenting the individuals as aseparate business market In technical language, Retail Banking can be definedas dealing with individuals both on liabilities andassets side Key features of Retail Banking:- Multiple Products- Multiple Channels- Multiple Customer Groups 3
  • 4. Contd…. Commercial Banks offers Retail Deposit Products,Retail Loan Products and Retail Services Key Drivers for Retail Banking:- Economic Prosperity- Changing consumer demography- Rise of convenience banking- Low delinquency rate4
  • 5. Contd….Retail Banking Opportunities Contribution of retail loan to GDP stands at 6% ascompared to 15% in China and 24% in Thailand Housing Finance itself will require an estimated3,61,000 Cr to meet the shortfall of 25 millionhouses Opportunities lies in consumer finance and wealthmanagement5
  • 6. Wholesale Banking Wholesale Banking refers to conducting bankingbusiness with industrial and business entities. Thisincludes, corporates, trading houses, multinationalsand domestic companies etc. Key products under Wholesale Banking can beclassified as:- Fund-based services- Non-fund-based services- Value-added services and- Internet Banking services 6
  • 7. Contd…. Fund-based services- Term lending, Short-term Finance- Working Capital Finance, Bill discounting- Structured Finance, Export Credit Non-Fund-based services- Bank guarantee, Letter of credit- Collection of bills and documents Value-added Services- Cash management services,- Channel financing, vendor financing,- Real Time Gross Settlement, CSA etc…. 7
  • 8. Contd….Wholesale Banking Opportunities Commercial lending and small businesses areexpected to drive Wholesale banking Opportunities also lie in Investment banking andstructured finance Wholesale banking is highly profitable for topperforming banks contributing 35-40% to PBT8