Prospects and Problems in Retail Banking in India

Prasad, Chowdari and Mohanty, Biswajeet and Nazkani, Umesh (2005) Prospects and Problems in Retail Banking in India. TAPMI, Manipal.

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Abstract

Retail Banking has gained enormous momentum in the Indian Banking Scene during last five years. The reasons are : (1) Introduction of Technology, (2) increased competition among different types of banks, (3) opening of new generation private banks, (4) inviting of more foreign banks in post WTO era, (5) focus on productivity and profitability, (6) deregulation of interest rates, (7) drive towards low Non-Performing Assets, (8) tilt towards more consumerism and life style spending by working / middle class, (9) innovation of new products and services, (10) implementation of Prudential Norms, Risk Management and ALM mechanisms, (11) closure / re-locating of loss making branches, (12) Voluntary Retirement of surplus staff, (13) sourcing of cheaper funds by corporate clients from global markets and resultant excess liquidity, (14) revival of mutual fund market, (15) opening up of insurance market, (16) revitalizing of stock market, (17) increase in the life-span expectancy due to modern health care facilities, (18) increasing contribution (over 50 per cent) to GDP from the Services sector, (19) Change in Government policy towards FDI in retail sector, (20) thrust on Infrastructure Development, etc. While prospects have been mani-fold for such an explosion in Banks in India resorting to Retail Banking, they can not do away with problems in such a short span after having been in a regulated and directed / protected environment for over three decades. Not all the customer groups (like rural population) are fully techno-savvy and could afford to lead new life styles availing consumer, housing or auto-loans. Necessary back up in infrastructure like power, roads, communications and technology have not yet reached in full scale to non-Metro cities. Prompt loan repayment culture has not yet set in many sectors of society. Legal systems and laws like SARFAESI Act, 2002 are still in the process of stabilizing.

Item Type:	TAPMI Working Papers
Uncontrolled Keywords:	Retail Banking, Internet Banking, ATMs, Credit Cards, Customer Focus, Technology in Banking, Marketing of Financial Services and Segmentation of Bank Customers
Subjects:	Finance Finance > Banking Services
Divisions:	Finance and Strategy
Depositing User:	Ms. Vanitha K
Date Deposited:	16 Nov 2018 10:27
Last Modified:	21 Nov 2018 04:16
URI:	http://tapmi.informaticsglobal.com/id/eprint/348

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