Retail & wholesale banking done

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Chapter 6
Retail and Wholesale Banking

2. Retail Banking
In pre-liberalisation era, banks mainly focused on
providing credit to industries and business houses
With the liberalisation of Indian economy, bank saw
a emerging opportunities in terms of young
population, increased incomes, purchasing power
and aspiration for better life style, quality products
and services
This gave birth to ‘Retail Banking’……..
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3. Contd….
Retail Banking is defined as doing business with
individuals by segmenting the individuals as a
separate business market
 In technical language, Retail Banking can be defined
as dealing with individuals both on liabilities and
assets side
Key features of Retail Banking:
- Multiple Products
- Multiple Channels
- Multiple Customer Groups
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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 rate
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5. Contd….
Retail Banking Opportunities
 Contribution of retail loan to GDP stands at 6% as
compared to 15% in China and 24% in Thailand
Housing Finance itself will require an estimated
3,61,000 Cr to meet the shortfall of 25 million
houses
Opportunities lies in consumer finance and wealth
management
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6. Wholesale Banking
Wholesale Banking refers to conducting banking
business with industrial and business entities. This
includes, corporates, trading houses, multinationals
and domestic companies etc.
Key products under Wholesale Banking can be
classified as:
- Fund-based services
- Non-fund-based services
- Value-added services and
- Internet Banking services
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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….
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8. Contd….
Wholesale Banking Opportunities
Commercial lending and small businesses are
expected to drive Wholesale banking
Opportunities also lie in Investment banking and
structured finance
Wholesale banking is highly profitable for top
performing banks contributing 35-40% to PBT
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