FINANCIAL SERVICES IN INDIA: AN OVERVIEW OF CHALLENGES AND

OPPORTUNITIES IN BANKS

INTRODUCTION

The financial services sector in India has undergone a complete and new face change
since 1990. The banking sector in India has experienced a rapid transformation. With the
opening up of an industry that’s tightly protected by regulations to private players has
introduced many challenges. The deregulatory efforts prompted many private financial
institutions and non financial institutions to enter the banking sector.

With the entry of private players into retail banking and with multi-nationals focusing on
individual consumer, the banking system underwent a phenomenal change. The major
trends triggering this change are commoditization of services, differentiation on features
of the products and competition from local and international industry entrants. In order
to meet these trends, the banks have changed the traditional line of business and
introduced the new financial products and services. Banks now rely on evolving long-
term association with customers for which they focus on sustaining profitable relation
with customers rather than attracting new customers. A shift from the conventional
interest based income structure to a more predictable and steady fee based income
structure suggests a change in the basic outlook of modern financial services.

OBJECTIVE

In this background it is proposed to carry out a detailed study which focuses on the rapid
transformation of the financial services sector in India in general and of Banks in
particular. The objective is to conduct a study of the different financial services rendered
by various banks and financial institution and a comparison of the approaches and pricing
of these services. The study will also include an analysis of the ‘customer taste’ on the
traditional business lines and the new technology based services provided by the financial
institutions.

The proposed study will be concentrated on certain nationalized banks( SBI, Syndicate
Bank, Canara Bank, Corporation Bank, Indian Overseas Bank etc,), scheduled banks
(Federal Bank, Karnataka bank etc,) and Private banks ( ICICI, HDFC, UTI, etc,).
[ Study of services rendered by Co-operative Banks and rural banks can also be
included.]

The study will focus on

(1) The reasons for the change in the financial service sector such as changing
customer needs, development of technology, competition etc.,

(2) Analysis of the various financial services and products

(3) The basis of pricing of these products and services.

METHODOLOGY

Primary data: It is planned to collect primary data on the basis of a Questionnaire and
personal interview of the officials of banks.

Secondary data: Details available on the website of the banks, Advertisements, articles
and publications based on studies conducted in this field in the past, journals and books
related to financial services.
USER GROUP

This study will enable the financial institutions to review their existing services and
products for improvements and introduction of new products and services.

This will also enable the customers to avail the maximum opportunities based on the
comparison of the different products.