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good job

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Its really helpful for banking beginners................

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RETAIL BANKING REVOLUTION IN INDIA Presented by : Ankan Debbarma Khalleq Vinay Ranjit Liju kaladhar Upendra Sagar

Way ahead:

Way ahead Introduction. Present scenario. Drivers of Retail Banking Growth. Industry response to the change. Emerging issues in Indian Retail Banking. Favorable role of RBI . Catalyst role of Government. Challenges faced by Indian Retail Banking. Strategies for increasing Indian retail business. Key players analyzed. Global scenario. What the industry has to offer? Future of indian retail banking. Conclusion. Sunday, April 10, 2011 2


Introduction Banking in India as old as from 19 th century. Drive towards building of large number of low value transactions. Multiple Products, channels of distribution, customer group. Rise of e-commerce in banking industry. Innovation with minimum branch dependence. Constitute “Low cost Funds” for banks. Sunday, April 10, 2011 3

Present scenario:

Present scenario According to FICCI survey the retail banking industry to grow at an average of 15-20%. Retail credit has been growing at an average of 30% CAGR and deposits @ 25%. Market transformation into “Sellers market” from “Buyers market”. A 21% CAGR of sharp rise in interest income came from bank lending in 2008 . Fierce competition has led to innovative customer centric products. Base rate system implementation by RBI to facilitate customers with more favorable rates. Corporate governance : The need of the hour. Over the last 5 years retail assets has crossed more than 1,89,000 cr and expected to touch 5,75,000 cr by 2010 end. Sunday, April 10, 2011 4

Drivers of Retail Banking Growth:

Drivers of Retail Banking Growth Behavioral factors Increased purchasing power of people. Available Tax benefits from govt. Increasing literacy levels and adaptability to technology. Nuclear families. “Buy and Pay” attitude rather than “Save and buy” attitude. Increased demand for dwelling units in urban areas. Macro economic factors Shift in the pattern of GDP from hitherto agriculture and manufacturing sector to services sector. Banks vying for housing finance.why? Growing proffessional investment opportunities in the market. Emergence of new sectors in economy. Sunday, April 10, 2011 5

Industry response to change:

Industry response to change “Any where”, “Any time” Banking Improved processes/Bundled product offerings Faster service/Reduced TATs Customer specific products/offerings on a regular basis ‘Bank’ customer has replaced ‘Branch’ customer Focus on understanding customer needs/ preferences Segmentation/Differentiation of customers Customer driven strategies Building relationships Sunday, April 10, 2011 6

Emerging issues in Indian Retail Banking:

Emerging issues in Indian Retail Banking KYC. Technology issues. Organizational alignment. Product Innovation. Price Bundling approach. Business process reengineering(BPR). Effective human resource. Rural orientation. Sunday, April 10, 2011 7

Favorable role of RBI:

Favorable role of RBI Inclusion of housing loans within priority sector. Reduction of risk weightage in case of housing loans from 100% to 50%. Reduction in CAR up to 9%. Introduction of base rate system to provide favorable rates to customers. Using CRR and SLR as tools to control bank credit. Sunday, April 10, 2011 8

Catalyst role of Govt:

Catalyst role of Govt Tax exemptions by govt for payment of interest on capital borrowed for housing loans. No TDS for Recurring deposits. Tax exemption under 80c in case of Life insurance premiums. MF investments under ELSS is also exempted from tax. Sunday, April 10, 2011 9

Challenges faced by Indian Retail banking:

Challenges faced by Indian Retail banking Issue of money laundering. Issue of outsourcing. Isn't KYC a big challenge? Sustaining customer loyalty. Technology induced threats. Acute shortage of manpower talent. NPA reduction. Avoiding “Debt Trap” for customers. Bringing rural masses into the purview of retail banking. Sunday, April 10, 2011 10

Strategies for increasing Retail banking Business:

Strategies for increasing Retail banking Business Constant product innovation. Quality service and reduction of TAT. Introduction of new delivery channels. Tapping of unexploited potential. Infrastructure outsourcing. Market research, cross sell and up sell. Tie ups to become “One stop financial supermarket”. TBTF organizations to be more big. Sunday, April 10, 2011 11

Key Players analyzed:

Key Players analyzed Robust growth shown by SBI and ICICI and major banks grew at a rate of 13.8%. Growth wise report shown in percentage. Sunday, April 10, 2011 12

Global scenario:

Global scenario Sunday, April 10, 2011 13

What the industry has to offer?:

Savings Bank A/c and Current A/c & FD A/c No Frills A/c Internet Banking. Phone Banking. Mobile Banking. Cheque Truncation system. Kiosks, POS Terminals. Demat services, MF distribution services, Insurance products. Consumer loans , Home loans, Vehicle loans. Loans against Shares, Insurance policies. What the industry has to offer? Sunday, April 10, 2011 14

Future of Indian retail Banking?:

Retail banking sector to grow at a rate of 30%. Direct agricultural loans of bank are worth Rs 17,239 cr towards end of March 2010. All banks are having an -5.02% growth rate in retail income due to inflation and recession effect. Share of retail income in total income of major banks. Future of Indian retail Banking? Sunday, April 10, 2011 15


Conclusion. Customers redefine the rules of the game. Universal banks and ultra focused niche players thrive. Changing workforce composition dictates new approaches. Regulatory burdens intensify. Technology improves inexorably to enable breakaway value. Sunday, April 10, 2011 16

Slide 17:

Sunday, April 10, 2011 17

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