Tue Class (Retail Banking)

Harendra Singh Asst.
Professor
Concept of retail banking

Retail banking refers to banking in which banking
institutions execute transactions directly with consumers, rather than corporations or other banks. Services offered include: savings and transactional accounts, mortgages, personal loans, debit cards, credit cards, and so forth.
Broadly we can divide the services as Asset side and Liabilities side
Retail banking- Retail Lending schemes( Asset Focused segment)

Housing Finance
Consumer durable finance Vehicle finance
Personal loan
Advance against future lease rentals Mortgage Loan Pension Loan etc.
Interest rate:
The rate of interest is deregulated by the apex monetary authority which suggested that the interest offered by one bank for a retail lending scheme may not match with the one offered by other bank. The rate of interest is decided by individual bank.
Retail Banking- Liability focused segment( Deposits)
Saving fund account/saving bank account

Saving fund account may be opened by a properly introduced singly or
jointly, minors of the age 10 yr and above with under natural/legal guardianship. Saving fund account can not be opened in the name of and business concern whether proprietary/company/partnership or association. Savings fund account can not be opened in the name of: Government departments, municipal corporations, panchayat samitis, state housing boards, industrial development authorities, state electricity boards etc.
Minimum Balance/ Account Opening Requirements:

The min balance to be maintained in the account may differ from bank to bank since this area is deregulated by the apex monetary body, the Reserve Bank of India.
Interest rate:
the interest rate to be allowed by the bank is decided by the RBI and this area has not been so far deregulated. The rate of interest payable by bank on saving fund account is 3.5 % p.a. on half yearly basis and it is calculated on the min balance from 10th to the last day of the month.
Withdrawal:
by and large , banks do not permit withdrawals from a saving fund account during every half year, whether by cheque or otherwise for more than 50 occasions. However, there is no bar that the bank should allow more than 50 times
Transfer of Account: An account may be transferred from one

branch to another branch of the bank, generally free of charge on written request of the depositor.
Premature Closure of Account: In case the account is

closed within one year, except on account of death of account holder, banks levy certain charges as per the internal guidelines.
Joint accounts: when an account is opened in the name of two or more
persons, all of them must signed the account opening Form and affix their photograph. The account will be operated in accordance with the instructions contained therein. If such instructions are rescinded by one of the joint depositors, withdrawals will only be authorized by all of them. In case of joint account payable to either or survivor, if any depositor is dead, the balance will be payable to the survivor without any reference or representatives or heirs if the deceased person
Minor accounts: An account in the name of minor below the age

of 10 years may only be opened under the guardianship of his/her father or mother in case both are not alive, a guardian appointed through a will , deed or legislative act in force for the time being.
Blind customers account/Illiterates persons account

The account of such person may be opened when he/she come personally to the bank with one witness who is known both to the person and bank Normally no cheque book facility is provided for such savings bank account At the time of wthdrawals / deposit he/she should give the thumb impression in the presence of authorized officer who should verify the identity of the person
Current Account
A current account may be opened by individuals, singly or jointly, partnership firm, company, association, institution, trust, society, etc. According to the Indian bank associations model deposit policy, an illiterate or blind person cannot open a current account as per the practice of the banks. It is a running account in which customers are free to make any number of transactions subject to maintenance of minimum balance in the account. The target group of current account is one of the business segment
Code of conduct(KYC norms):

The bank branches are required to obtain a declaration from the prospective account holder in the following manner: that I/We/am/are not enjoying any credit facility with any other bank/any other branch of you bank and I/We undertake to inform you, on writing as soon as any credit facility is availed of by me/ us from any other bank/any other branch of your bank. Or that I/We/am/are enjoying any credit facility with other bank/other branch of your bank as per details given in the enclosed sheet. In case the account holder is enjoying any credit facility from any other bank, the concerned lending banks should be duly informed and get the No-Objection certificates from those banks
Minimum balance/Account Opening Requirements:

The min balance to be maintained in the account may differ from bank to bank. Withdrawl: there is no restrictions on number of withdrawals . However bank mentioned the amount below which the cheque shouldnot be drawn otherwise penalty will be levied.
Interest: no interest is allowed on Current Account Penal charges: the customers are supposed to maintain minimum
balance in the account as per the banks requirements. Other wise penal charges may be slapped on them
Term deposits
Banks may accept term deposits for a min period of 7
days and maximum period of 10 years Rate of interest: differ from one bank to another In case of decease depositor
Recurring deposits
As per the practice followed by the banks by and large, it can be opened
for an installment of Rs. 100/- or more or in multiples thereof for a period ranging from 6 months to 120 months in multiples of 3 months. Interest rate is deregulated.
Wholesale Banking
Banking services between merchant banks and other financial
institutions. Wholesale banking deals with larger institutions, where as retail banking would focus more on the individual or smaller business. Some services might include currency conversion, working capital financing and large trade transactions. of large corporate clients, mid-sized companies, real estate developers and investors, international trade finance businesses, institutional customers (such as pension funds and government entities/agencies), and services offered to other banks or other financial institutions. In essence, wholesale banking services usually involve high value transactions.
Wholesale banking is the provision of services by banks to the likes
Corporate Banking
Corporate Banking represents the wide range of banking and financial
services provided to domestic and international operations of large local corporate and local operations of multinationals corporations. Services include access to commercial banking products, including working capital facilities such as domestic and international trade operations and funding, channel financing, and overdrafts, as well as domestic and international payments, INR term loans (including external commercial borrowings in foreign currency), letters of guarantee etc.

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Harendra Singh Asst.

Concept of retail banking

Retail banking- Retail Lending schemes( Asset Focused segment)

Retail Banking- Liability focused segment( Deposits)

Saving fund account/saving bank account

Minimum Balance/ Account Opening Requirements:

Transfer of Account: An account may be transferred from one

Premature Closure of Account: In case the account is

Minor accounts: An account in the name of minor below the age

Blind customers account/Illiterates persons account

Code of conduct(KYC norms):

Minimum balance/Account Opening Requirements:

Wholesale banking is the provision of services by banks to the likes

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