The
operations of any banking unit are divided into two
broad categories, viz., wholesale banking or corporate
banking and retail banking. The wholesale banking covers
the financial needs of corporate houses, financial institutions,
trusts etc., and the size of the account is quite large.
Retail banking, on the other hand, is not a new phenomenon.
It has always been rampant in diverse forms. But, it
has become synonymous with main stream banking for many
banks lately. Typically, it refers to dealing with individual
consumers both on the liabilities and asset side of
the balance sheet. On the liabilities side, in the form
of deposits such as fixed, current, saving account.
Whereas on the asset side, in the form of various loans
such as personal loans, housing loan, auto loan, educational
loans, etc. Besides this, the retail banking also provides
various ancillary services such as mobile-banking, phone-banking,
internet-banking, depository services, etc.
The
emergence of retail lending has more to do with economic
prosperity improving consumer purchasing power, increasing
penetration of middle to high income households, changing
consumer demographics (India is one of the country having
70% of the population below 35 years of the age), technology
advancements, developments of the software industry,
increase in treasury income of the banks, decline in
interest rates, etc. A report released by AK Kearney,
a global management consultant firm, which recently
identified that, "India as the second most attractive
retail banking destination of 30 emerging markets",
and in reality, India has witnessed a shift from wholesale
lending to retail lending especially private sector
banks. |
