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(Special
Issue -- Retail Banking)
Emerging
Trends
--V Raghunathan, President, The Vysya Bank Ltd. and K Ravi,
Economist at ING Vysya Bank
Following
globalization in India, retail banking has made strong inroads
into Indian banking. Every bank, small or big, new or old,
private or foreign is chanting the retail mantra. Since retail
banking is evolving at a faster pace, the players are
redrawing their strategies to optimize on the business
potential.
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Technological
Divide and Future of (R)etail Banking --
Dr.
Ganti Subrahmanyam, Chair Professor, GITAM Institute of Foreign
Trade Internet
can provide customers a seamless route to access retail
financial services with low transaction cost. But still it is
popular only in a few parts of the world. With the growing use
of Internet and other electronic channels in India, scope for
retailing through these channels is increasing.
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ICICI
Bank: The Technology Edge
--Anup
Bagchi, Senior Vice-President, ICICI Bank
ICICI
Bank is trying to become the number one financial supermarket
with strong customer focus and retail strategies of product,
channels and processes. The bank is innovatively integrating
the customer services standards and contemporary technology.
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Canara
Bank: The Retail Focus
--
RV Shastri, Chairman and Managing Director, Canara Bank
Post-nationalization
banks have expanded their branches and business aggressively.
However, only during the last two to three years retail assets
gained focus. Canara Bank is setting excellent standards in
the realm of retail banking.
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Technology-led
Customer Service : The Secret of Success --
Ajay Bimbhet, Country Head _ Retail Bank, IDBI Bank
A
clear trend in the banking sector in the last few years is an
increased focus on customers. The stance by banks to use
technology as a tool to satisfy customers is of course a good
attempt. But, there is no point in having high-tech
environment if it complicates things for customers. Banks that
have integrated technology to their system, have all prospered
well. But the known fact is that service standards cannot be
duplicated by competition.
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The
Panacea for Banking Illness
--
AL Chandramouli, General Manager, Indian Overseas Bank
The
advantages that a bank can reap by going retail are lower NPAs,
lower risk weight in certain segments like housing loan,
better yield, low cost funds, strong customer base etc. If
banks handle it effectively and efficiently, it could be the
panacea for all banking illness.
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A
New Business Opportunity
--
AK Jagannathan, General Manager (Credit), State Bank of
Hyderabad
Banks
are mobilizing more and more savings accounts to get the low
cost funds. Banks are earning higher profits by lending hard
core portion of these deposits to retail borrowers. That is
why new generation banks who wanted to be known for their
corporate banking portfolio are now chanting the retail
banking mantra. From the risk management perspective also
banks are turning towards retail.
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A
Safe Passage -- K Rathnakar Hegde,
General Manager (Credit and Central Accounts), Vijaya Bank
Indian
banking has undergone a sea change in the last decade. Due to
the problems associated with bulk lending, banks are stressing
on retail segment. The retail banking has now become a
sustainable business model.
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New
Strategic Need -- Dr. VA Deshpande,
Assistant General Manager, Planning and Chief Public Relations
Officer, Bank of Maharashtra and DR Shrivastava, Manager,
Economic Research Cell, Bank of Maharashtra
Indian
banking has undergone a total metamorphosis after the
introduction of financial sector reforms in 1992. The
environment in which the banks are operating has drastically
changed. Indian banks are trying to attain international
banking standards and practices. The implementation of
second-generation reforms in this sector has supported these
efforts.
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The
New Focus -- N Ramachandran, Principal,
Staff Training College, Karur Vysya Bank
Higher
middle class, rising disposable income, changing life
style/aspirations, willingness to spend more for luxuries are
some of the factors attracting the banks to enter the retail
segment in a big way.
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A
New Prospect -- Dr. AS Harish, Manager,
Vysya Bank
Slow
credit demand from corporates, low interest rates and
prudential norms are forcing the banks to move towards new
avenues. Also the scope for substantial deployment of funds,
which offer better risk-return trade-off and a well
diversified credit portfolio are the imperatives that
literally led the banks to go retail.
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Banks
Become Customer-centric -- M Jayadev,
Associate Professor, IIM-Lucknow
The
major reasons for the recent radical changes in banking
industry's asset portfolio are competition, consolidation,
information technology and the need to be customer-centric.
Banks could improve the profitability by adopting strategies
like market segmentation, innovation, price bundling and
relationship. Technology has a major role to play in retail
banking, but its role is complementary to customer service
initiatives.
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Micro-credit
and Women's Empowerment -- Rasheeda
Bhagat, Deputy Editor, Business Line
Until
recently banks had largely ignored micro-credit to rural women
and rural Non-Government Organizations (NGO). But the success
stories of these NGOs, lower chances of default and higher
return from them are forcing the banks to provide finance to
such organizations.
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SME
Lending: Gaining Momentum -- Katuri
Nageswara Rao, Principal, IMC
Banks
the world over are realizing that financing SME sector could
be profitable. It has the potential to generate national
wealth much faster than corporate sector. Entrepreneurship of
the borrower and the bankability of the venture are more
important than availability of collateral. Citibank has
successfully tapped this opportunity in Germany and Japan.
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Customer
is the King -- Parmod Gupta, Officer,
The Bank of Rajasthan Limted
Banks
offer innovative, customized products to attract the smaller
borrowers. Most of the banks are trying to enhance the
percentage of credit to retail customer in their total credit
portfolio. In such a scenario, customers are getting the
benefits in terms of lower interest rate, easy access to loan
funds etc.
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Housing
Sector: A Macro Perspective --
Abhishek Narang, Faculty Associate, IBS Gurgaon
Banks
are aggressively marketing their housing loan product due to
its attractiveness like lower risk weight in calculation of
CAR, backed by mortgage, lower default rate etc. The customers
are also equally benefitted with tax shelter on interest
payment and easy access. Due to its strong impact on other
industries it could lead the economy from recession to boom.
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