Disadvantages Of Retail Banking

Figure 6: Percentage growth of debit and credit cards

A new trend has been found by Credit cards. In a nation regulated by hard currency for business these modern piece of plastic cards are gaining foothold. It is forecasted that outside US market the next largest market for credit card will be in India. Figure 7: Growth of credit card in India

1.1 RETAIL BANKING ADVANTAGES: Retail banking is a type of banking, where individual consumer’ needs are met at the primary level i.e. by offering numerous products. This has become practical by the development of banking system and computerisation of banking process.
Following are the advantages of retail banking:
• Retail deposits constitutes core deposit and are stable.
• Additional

• Banking bottom line and yield can be improved with retail banking. All other business division of the bank improves with retail banking.
• Retail banking can be a good source for fund deployment.
• NPA perception and consumer loans are presumed to be of lower risk.
• Affordable credit line from retail banking has helped in improving the lifestyle of the people and has helped in fulfilling the aspirations.
• Innovative banking products according to different customer segment are being developed by bank because retail banking is providing that opportunity.
• In the high demand based area, the marketing effort needed for retail banking is minimum. Huge customer base helps bank to avoid dependence on few or single borrower because of diversified business segments of the bank.
• Without deploying the funds, banks can earn huge profit by providing fee based on non-fund based services to the customers.
• As loan amount is small or not that huge, the credit risks with the consumer loan tends to be well

Yet, despite the emergence of new competitors and models, we believe the traditional bank has a bright future – the fundamental concept of a trusted institution acting as a store of value, a source of finance and as a facilitator of transactions is not about to change. However, much of the landscape will change significantly in response to the evolving forces of customer expectations, regulatory requirements, technology, demographics, new competitors and shifting economics.
Banks need to choose what posture to adopt against this change – whether to be a shaper of the future, a fast follower, or to manage defensively, putting off change. Staying the same is not an option. We believe that the winners in 2020 will not only execute relentlessly against today’s imperatives, but will also innovate and transform themselves to prepare for the future. This future will require institutions to be agile and open, ready to explore different options in an uncertain