Retail banking is generally refers to offering financial services, products related to deposits and assets to individual customers for

personal consumption. Banks concentrate on various segments like professional, housewives, pensioner, children, salaried class etc. Different types of product like recurring deposit, saving bank deposits, F.D, credit cards, housing & consumer loans are offered by bands of the above mentioned market segments

Current Scenario
Across the globe, retail lending has been a spectacular innovation in the commercial banking sector in recent years. The growth of retail lending, especially, in emerging economies like India, is attributable to the rapid advances in information technology, the evolving macroeconomic environment, financial market reform, several micro-level demand and supply side factors.

Reasons contributing to this retail growth

Economic prosperity and the consequent increase in purchasing power has given a fillip to a consumer boom. India's economy grew at an average rate of 7-8 percent and continues to grow almost at the same rate not many countries in the world match this performance. Changing consumer demographics indicate vast potential for growth in consumption both qualitatively and quantitatively. India is one of the countries having highest proportion (70%) of the population below 35 years of age. The BRIC report of the Goldman-Sachs, which predicted a bright future for Brazil, Russia, India and China, mentioned Indian demographic advantage as an important positive factor for India. contd

Reasons contributing to this retail growth..

The Treasury income of the banks, which had strengthened the bottom lines of banks for the past few years, has been on the decline during the last two years. In such a scenario, retail business provides a good vehicle of profit maximisation. Considering the fact that retails share in impaired assets is far lower than the overall bank loans and advances, retail loans have put comparatively less provisioning burden on banks apart from diversifying their income streams. Decline in interest rates have also contributed to the growth of retail credit by generating the demand for such credit.

PNB SCHEMES
The loans are marketed under attractive brand names to differentiate the products offered by different banks. As the Report on Trend and Progress of India, has shown that the loan values of these retail lending typically range between Rs.20,000 to Rs.200 lakh. The loans are generally for a of duration of five to seven years with housing loans granted for a longer duration of 25 years. Credit card is another rapidly growing sub-segment of this product group.

PNB SCHEMES..
The products offered in our bank are: Housing loans (Public / NRI ) OD for existing Housing Loan borrowers Conveyance Loan Car & 2 wheeler PNB Vidya Lakshyapurti (Educational loan) PNB Baghban (Reverse Mortgage) Scheme for financing Traders. Contd

PNB SCHEMES
Scheme for financing Property Owners Against Future Lease Rentals Scheme for financing professional Medical Practitioners Scheme for financing training/ skill up- gradation of construction workers
Contd

PNB SCHEMES.
Personal Loan Scheme for Pensioners & Public PNB Doctor Loan scheme (Gramin Chikitsak) Gold & Jewellary Advance Consumer Loan PNB Credit Card

Challenges
Sustaining Customer Loyalty NPA reduction Fraud Prevention Avoid Debt Trap for Customers Competition from New Generation Banks Bringing Rural masses into mainstream banking Improving quality of Retail Credit

Strategies for Future

Performance oriented Leadership Sophisticated marketing & Sales Efficient distribution Channels Superior Credit Policy, Procedures & Skills Reaching to Masses- Higher penetration Customer segmentation/ differentiation Promoting LOW RISK retail lending products Offer an array of products & financial advisory Renewed emphasis on superior execution by front-line employees

Suggestions..
Tie-ups with Gymkhanas/clubs such as Bombay Gymkhana, Lions club, Rotary club for their members to avail various popular schemes at concessional rate. Tie-ups with major industrial houses for encouraging PNB Retail loans. Tie-ups with reputed Builders such as M/s Ravi Developers, Raheja, Hiranandani for Housing loan. Contd

Suggestions
Cycle/Moped loans to Secondary school/ college going students of economically weaker sections at DRI/concessional rate in rural/ semi urban areas. There should be an increased focus on retail lending where the risk is spread over a number of borrowers and there is a higher interest rate margin.

Liability products
Customers deposit savings with bank>liability on banks side Customer deposit->an ac open->pre decided interest paid->pre decided intervals Liability products-saving & current ac , time (fixed &recurring) & demand deposits(saving bank ac,no frills &current ac)
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 According to KYC norms banks segregate customers low, medium & high risk categories In India all customer deposit ac are insured by Deposit Insurance and Credit Guarantee corporation(DICGC) If ban liquidated each customer dposit in that bankis repaid upto Rs100000.
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Savings Account
Customer deposit or withdraw. ATMs instant cash withdrawals &balance enquiry Debit cards for cashless transaction shopping or purchasing Banks invest >avenues-> pay modest interest to customers Examples-ICICI Young stars ac
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No Frills Account
Saving ac with zero balance or low minimum balance facilty->for financial inclusion of poor people in financial system Ex:-Allahabad bank & UCO introduced >mandate Rs. 5 as minimum balance For ATM & cheque book facility they charge Rs250
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Current account
Maintain a minimum balance ->bank pays no interest on amount deposited->allows user to make unlimited transactions in a day Used to pay rents, taxes, utility bills, Insurance premiums etc.

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Fixed deposit/Term deposit

Is a time deposit->deposits for pre decided time->interest on->at pre decided intervals Money withdrawn after maturity->but bank pays less interest Some banks allow partial witdrawal at ATM machines Are also link to safe deposit locker facility.
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Recurring deposit
Allow customer to save small amount of money every month. Aimed at those ->having high expenditure during month yet would save money for future Banks pays modest interest for amount saved quaterly , half yearly Ex:-June 2006 SBI was 6.00% ICICI 6.25%
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ASSET PRODUCTS

 An asset is something that bank holds in terms of credit given to customer. The interest rate charged are different for different products. Fixed Floating Customers are protected against variations in case of fixed rates.

Types of Asset Products

Housing Loan Personal Loan Education Loan Gold Loan Property and Mortgage Loan Vehicle Loan Agricultural Loan

Housing Loan
It forms the majority of asset portfolio for a retail bank. It gives financial assistance to customers to construct a house/land. Bank considers many factors such as customer age ,qualification and asset owned etc. Many bank prefers floating rates.

Personal Loan
Bank gives Personal loans to customer to help them meet personal exigencies like marriage , travel, medical etc. Personal loan given depends on customers creditability and repayment ability. Bank considers customer information like age, income, stability, track record etc. Interest charged is generally fixed rate.

Property loan/Mortgage Loan

It is traditional banking Product. It is generally offered by public sector banks. Property assets like land, building, vehicles,gold etc are mortgaged. Bank decides the amount of loan given against security. Interest rates are fixed based on market rates.

Agricultural Loan
It includes crop loan, farm equipment loan, term loan etc. Other includes land purchase loan, land development loan, irrigation loans. Certain Property is mortgaged/Hypothecated against the loan. Many banks provides loan cards for farmers to access the funds. Banks that give this loan include SBI and ICICI etc.

Vehicle Loans
Bank provides loans for purchase of two wheelers, four wheelers and commercial vehicles. Vehicle loans are usually financed up to 85-90% of total invoice amount. Repayment is usually done through EMI. Period ranges from 6 months to 7 years.

Credit cards and debit cards

Credit card and debit card are another product offered by bank which do not fall under asset or liability product. Credit cards allow a facility of buy now and pay later. Debit card holder does not need to pay any interest since the amount id debited directly when swiped and credited in merchants account It is now known as pay now enjoy later.

Investment products
Investment products are a new category of retail banking products in addition with assets and liability products. They include insurance products, mutual funds and pension funds. Investment products are much marketed by the retail managers because it provides bank with additional liquidity.

Types of investment products

Insurances life insurance non life insurance Mutual funds Pension schemas

Non life insurance

Insurance is a form of risk management primarily used to hedge against the risk of contingent, uncertain losses. Non life insurance is a one year contract that can be renewed. It includes mainly motor vehicle insurance personal accident insurance

Continue..
health insurance householders insurance corporate products in non life insurance group health insurance cargo insurance industrial insurance fire insurance

Life insurance
Individual products in life insurance term policy whole life insurance endowment policy money back policy Group products in life insurance group term

group gratuity plan group insurance in lieu postal life insurance

Mutual funds
In a mutual fund scheme, funds are obtained from a large number of investor and invested in a portfolio of investment avenues like equities, debt instruments and money market instruments. A mutual fun unit is the smallest part of the share that an investor can buy/hold in the mutual fund.

Conclusion
Retail banking offers opportunities to banks to cross sell various other retail products like credit card, insurance, mutual fund product and demat facilities to the depositor. Before the reforms, most of the products offered by banks were multiple, which the customer had no option except to accept or leave them. Retail banking has become the buzzword in banking. It is the flavor of the year. A critical assessment of the foregoing scenario indicates that retail banking is, at present, the only shortcoming left with banks is to survive in this era of falling interest. Banking is undergoing rapid changes worldwide and India is no exception. The financial sector reforms aimed at deregulation, liberalization and globalization of Indian banking has changed the entire scenario of Indian banking. Satisfaction to customers in banking has given way to innovative

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