This a presentation on retail banking sector and a detail analysis of the same.

2.  Retail Banking refers to financial services
provided to private individuals / families as
opposed to Companies, Governments and
other financial entities like Banks, Insurance
companies, NBFCs.
 Also known as consumer banking , it is in the
context of the consumer being the customer
of the Bank.

3.  Multiple product/services to meet financial needs
of consumer
 Standardized products-” off the shelf”
 Inclined towards technology platforms
 Most visible interface with large customer base
 Most stable, low cost funding source for the Bank
 Large number of small value transactions
 Risk Management models (templated)
 Special significance in emerging markets
Increase in Disposable incomes of individuals
and GDP growth from Tier II & Tier III regions in
India- pillars of future growth
 Cross sell opportunity

4.  On Liability Side of the Bank
◦ Deposits
 Current
 Savings
 Term
 Recurring
 On asset side of the Bank
◦ Loans
 Personal
 Auto
 Housing
 Educational
 Property
◦ Credit Cards
◦ Agri Loans (PSL)
◦ MSME Loans (Individuals) (PSL)

5.  Other services
◦ Depository services
◦ Insurance
◦ Capital markets products

6.  Branches
 Telephone
 ATM
 Call Centre
 Internet banking
 Mobile Banking
 Business Correspondent
 Debit cards/Credits Cards
 Newer products like contactless cards
 Newer products AI/ML linked delivery channels
like Chatbots

7.  Efficient delivery of service, enhance consumer
delight
 Matching of products & services to customer Profile &
needs
 Transparency in charges levied
 Use of credit scoring models
 Regulatory Compliance
 Risk Management
 Degree of Financial Inclusion achieved
 Customise product offering to customer using
technology
 Reduce Paper work/time taken per transaction
 Partnerships with other entities like Payment banks to
enhance customer base

8.  Consumer Protection
 Inadequate MIS
 Compliance with KYC & AML
 Risk Management
 Bridge the gap in the consumers’ mind to
embrace technology
 Cost management for delivery channels
 Competition from Differentiated Banks like
Payments Banks, FinTech startups
 Data security

9.  Wholesale Banking refers to provision of
financial products and services to large and
mid size Firms/companies, government
institutions, other financial institutions,
Pension funds, large corporations
 This section provides specialised products
and services with a view to provide complete
banking solutions to cater to every financial
need of its clients.

10.  Customised product offering ; bouquet of
various services
 Large value sophisticated deals ; low volume
of transactions
 Risk Management – client wise with specific
focus on the industry
 Delivers volume of source of finance; but not
low cost
 Industry specific inputs
 Complex Regulatory requirements
 Capital Intensive banking

11.  On the asset side
◦ Working Capital finance
◦ Bill Discounting
◦ Export credit
◦ Short term Finance
◦ Structured Finance
◦ Term lending
◦ Supply chain Finance – dealer finance/vendor finance
◦ Loan to sensitive sectors
 Other services(Non Fund Based)
◦ Bank guarantees
◦ Letters of Credit
◦ Collection of documents
◦ Syndication services
◦ RTGS
◦ Cash management services

12. ◦ Channel Financing
◦ Forex Desk
◦ Money market desk
◦ Derivatives Desk
◦ Investment advisory
◦ Payment gateways
◦ Tax collection and Payments
◦ DP Accounts, Custodial service
◦ Services to Employee Trusts
 On the Liability side
Corporate Salary accounts
Reimbursement Account
Bankers to issue/Public Issue
Correspondent Banking

13.  Central pricing team that measures cost based
spread, market sensitivity factors, client
differentiation, Implied spread for the Bank
 Ability to provide industry specific inputs
 Use of Analytics and digital tools for RMs and
Clients
Clients- reduce TATs, improve operational
risk
RMs – Performance dashboard, Review
operating figures, Collaboration, Customer
Information, Pricing excellence, Product Knowledge

14.  Pressure on lending rates
 Mounting amount of Bad loans
 Increasing Frauds
 Inadequate level of digitalisation while
interaction with Banks
 Loss of opportunity due to corporates lending
from masses
 Data Security

15.  Retail deposits provide low cost stable source
of funding for the bank.
 Retail assets provide greater risk
diversification as compare to whole sale
assets for the bank.
 50 m:
◦ 20 m (Grp. prstn 10 m)
◦ Loan composition for whole/retail FY20-21/FY21-
22
◦ Calculate any 5 ratios for same bank for 2 yrs.
◦ 10 m test: bonds & derivatives