Retail Banking Products and Opportunities | JAIIB PPB

April 10, 2021
Retail Banking Products and Opportunities

Retail Banking term was coined around 1990s after economic reforms were initiated. Commercial Banks cater to different segments of customer. One such segment is Individual customer. Banking business with Individual customer is called Retail Banking

Retail Banking Products

The retail banking products are divided into three segments:

  1. Retail Deposit Products
  2. Retail Loan Products
  3. Miscellaneous Products

Retail Deposit Products

The retail deposit products offered by banks are:

  • Saving Account
  • Current Account
  • Term Deposit Account
  • Recurring Deposit Account
  • Basic Saving Bank Deposit Account (BSBDA)
  • Salary Account of Corporates

Retail Loan Products

The retail loan products offered by banks are:

  • Home loan for purchase of land and subsequent construction of house, repair and renovation of house
  • Auto loan for purchase of Car, Two-wheeler etc
  • Consumer loan for purchasing consumer durables like TV, Refrigerators etc
  • Education loan
  • Crop loan for agriculture and allied activities
  • Small business loan for setting up trade related activities and retail trading
  • Credit Cards

Retail Miscellaneous Products

The other retail products offered by banks are:

  • Lockers
  • Depository Services
  • Bancassurance Products
  • ATMs
  • Debit Cards
  • Internet Banking
  • Mobile Banking

Why Retail Banking an immense growth opportunity for banks

It provides immense business growth opportunity to banks owing to following reasons:

  • Ushering of Economic reforms lead to more purchasing power of population. Customer became more demanding.
  • Young population is more oriented toward consumer goods and has less aversion towards credit
  • Convenient banking products like Debit cards, Internet banking, Mobile banking etc
  • Lower interest rate
  • Gross NPA of retail segment is lowest. Specifically NPA of housing loan category is lowest. Thus Banks feel more comfortable while lending to retail segment of customer.
  • It provides opportunity to banks to diversify their risk portfolio and augment their profitability.

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