Retail banking is an issue related to the commercial banking sector. The products of retail banking are credit loans, housing loans, and cash credit loans. The growth of retail lending and many of the emerging economics is dependent on the advanced development in information technology. The increasing microeconomics environment, financial market reform, and several other micro-level demand supply-side factors. India has experienced a certain increase in retail banking. The retail loans are accounted for one-fifth of total loan credit. The housing sector has seen an increase in credit loans. The retail loan market has got transformed from the sellers’ market.
What is the reason for the increase in retail banking?
1. Increasing Purchase Power:-
The increase of the purchasing power is given by the retail banking to the Indian people. The approval of the short term credit loan is given by retail banking. The affordable interest rate and increasing demand for a short-term loan have given rise to retail banking.
2. Increase in Literacy Level:-
The increase in literacy has given the rise to the technical banking aspect. It has given the large demand for retail activities for retail banking.
3. Higher Adaptability and literacy:-
Convenience banking in the form of debit and internet banking has given rise to technical ease. The contribution of the credit/ debit card, ATM’s, direct debit, and phone banking has given rise to retail banking in India.
4. Competition in retail banking:-
Access to the new generation of private banks has increased the competition. The retail segment which was unnoticed got the most investment.
What are the challenges in retail banking in India?
The challenges in retail banking are the regulatory pressure, low-interest rate, and shift towards the digital transaction. The focus is on the trust and loyalty of the customer. There are many of the customer the centricity schemes in the banking. The keen competition in the bank is increasing because of the private sector player in the banking sector. The high cost of the transaction is required due to security measures. An increasing number of non-performing assets. It is required to perform the employee productivity. The continuous increase in the operational cost of the bank. The increasing consumer-centric method will increase the operational cost.
The use of computer and information technology will increase the cost of the banking sector in India. The Indian banking sector is full of the player like as the public sector, private sector, and foreign bank. Retail banking in India is looking for an increase in business policy.
What are retail banking products available in India?
The main product of retail banking in India.
1. The Deposit of the product such as the flexible deposits.
2. The loan product such as housing, auto, education, and personal loan.
3. The card product such as credit card.
4. The traveler’s product such as the traveler cheques.
5. retail banking in India is increasing its reach to home loans, internet banking, mobile banking, ATM cards, and many more.
6. Retail banking provides the bank opportunity to do selling and provide ancillary service.
7. retail banking offers the promise of low transaction costs. The more sale of productivity and more convenience in the business. The older bank with the vast network enters the market makes a disadvantage against the established. Hence the retail banking allows the customer base with the optimum leverage of resources.
What are the opportunities available in retail banking in the future?
The management of the central system is on the existing customer relationship. Many banks have a lack of understanding of individual customer behavior. The best practice having a single customer view for the understanding of the behavior of the client.
Retail banking towards social media is the area of aggressive competition. The technological base with the efficiency in the operation must give preference with a comparative edge. The prime importance has to give to the consumer’s interest. The customer database with the bank is the best source for demography and financial information. The banks must come up with a new product in the area of security, mutual fund, and insurance. Banks must train the staff to provide advice and enhance customer experience is also a priority. The future retail strategy will focus on deposit gathering, cross-selling to the existing client. The acquisition and developing relative profitability. The cross-selling of products and the advantage of having a wide network of the branches has allowed selling the third party product. The business process outsourcing will help to concentrate on the core business area. Banks can give more time to marketing, customer service, and brand building.
Retail banking in India depends on consumer interest. There are lots of opportunities available for new ideas and technology. Retail banking is used for the short term loan to medium-term loans. The retail banking is mostly use in agriculture, small business and industries services.