universal banking

UNIVERSAL BANKING:

UNIVERSAL BANKING Universal Banking is a multi-purpose and multi-functional financial supermarket (a company offering a wide range of financial services e.g. stock, insurance and real-estate brokerage ) providing both banking and financial services through a single window . As per the World Bank," In Universal Banking, large banks operate extensive network of branches, provide many different services, hold several claims on firms (including equity and debt) and participate directly in the Corporate Governance of firms that rely on the banks for funding or as insurance underwriters."

UNIVERSAL BANKING:

UNIVERSAL BANKING Presented by Denish Vekariya

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It includes not only services related to savings and loans but also investment. However in practice the term 'Universal Banking' refers to those banks that offer wide range of financial services beyond the commercial banking functions like Mutual Funds, Merchant Banking, Factoring, Insurance, Credit Cards, Retail loans, Housing Finance, Auto Loans, etc . A Universal Banking is a superstore for financial products, under one roof. Corporates can get loans and avail of other handy services, while individuals can bank and borrow.

Empirical background of Universal Banking:

Empirical background of Universal Banking Since the early 1990s, structural changes of profound magnitude came to be witnessed in global banking systems. Large scale mergers, amalgamations and acquisitions among the banks and financial institutions resulted in the growth in size and competitive strengths of the merged entities . The issue of universal banking resurfaced in Year 2000, when ICICI gave a presentation to RBI to discuss the time frame and possible options for transforming itself into an universal bank.

Advantages of Universal Banking:

Advantages of Universal Banking Economies Of Scale - greater economic efficiency in the form of lower cost, higher output and better products. - A bank can reduce average costs and thereby improve spreads if it expands its scale of operations and diversifying activities . Profitable Diversions - By diversifying the activities , the bank can use its existing expertise in one type of financial service in providing other types - one entity instead of separate bodies.

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Resource Utilization - A data collection about the market trends, risk and returns associated with portfolios of Mutual Funds, diversifiable and non diversifiable risk analysis , etc are useful for other clients and information seekers. Easy marketing on the foundation a of Brand name - a bank can reach the remotest client without having to take recourse to an agent because it has an existing network of branches. One stop shopping - saves a lot of transaction costs and increases the speed of economic activities.

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Investor friendly activities - A bank's equity holding in a borrower firm, acts as a signal for other investors on to the health of the firm , since the lending bank is in a better position to monitor the firm's activities.

Products in Universal Banking:

Products in Universal Banking Accounts. Loans Cards Insurance Investment Wealth management Online banking

A universal banking powerhouse...:

9 Retail Financial Services Corporate Financial Services Term Loans Project Finance Commercial Bank Investment Bank Venture Capital Genl. Insurance IT Services Car Loans Mortgages Credit Cards Personal loans Deposits Life Insurance Mutual funds A universal banking powerhouse...

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