Volume : 4, Issue : 1, January - 2015

STRATEGIES OF COMMERCIAL BANKS IN RETAIL FINANCING

Mr. Kulkarni Shashikant

Abstract :

<p>Retail banking is when a Bank executes transactions directly with consumers, rather than corporations or other banks.< /> Services offered include savings and transactional accounts ,mortgages , personal loans, debit cards, and cards. Today,< /> retail banking is being considered as one of the most innovative financial services provided by the various commercial< /> Public Sector Banks (PSBs), private sector and foreign banks. Retail banking has a huge potential considering the growing demand for its< /> products namely, term deposits, consumer durable loans, auto loans, debit card, credit cards, ATM facilities, insurance, online banking, etc. The< /> growing sector of retail lending has contributed significantly to the development of the economy. Like other developed countries, India too, has a< /> developed retail banking sector which accounts for one–fifth of all banks credit. Retail lending across the globe has been a showcase of innovative< /> services in the commercial banking sector. Countries, like China and India, have emerged as potential markets with changing investment< /> opportunities. The higher growth of retail lending in emerging economies can be attributed to the rapid growth of personal wealth, favorable< /> demographic profile, rapid development in information technology, the conducive macroeconomic environment, financial market reforms and< /> small micro–level supply side factors. The retail banking strategies of banks are undergoing a major transformation, as banks are beginning to< /> adopt a mix of strategies like organic growth acquisition and alliance formation. This has resulted in a paradigm shift in the marketing strategies< /> of the banks. PSBs are adopting aggressive strategies, leveraging their anch network to garner a large share of the retail market.</p>