What is Retail Banking?

Retail banking is typical mass-market banking where individual customers use local branches of larger commercial banks. Services offered include: savings and checking accounts, mortgages, personal loans, debit cards, credit cards, and so forth. Types of retail banks: 1. Commercial bank has two possible meanings: a) Commercial bank is the term used for a normal bank to distinguish it from an investment bank. The banks only engage in banking activities, whereas investment banks were limited to capital markets activities. This separation is no longer mandatory. b) Commercial bank can also refer to a bank or a division of a bank that mostly deals with deposits and loans from corporations or large businesses, as opposed to normal individual members of the public (retail banking). 2. Community development bank are regulated banks that provide financial services and credit to underserved markets or populations. 3. Private banks manage the assets of high net worth individuals. 4. Offshore banks are banks located in jurisdictions with low taxation and regulation. Many offshore banks are essentially private banks. 5. Savings bank accepts savings deposits. 6. Postal savings banks are savings banks associated with national postal systems. Services Relating to Retail Banking Provided by NCBs in Bangladesh. Savings and Checking Accounts: Savings accounts relates to the fixed deposit accounts, deposit for a specific period and Temporary deposit accounts. According to the encyclopedia a check means the order of transfer money. Checking accounts is the current accounts for withdraws of money at any time, Debt accounts and the others accounts which is relates to providing service for a individuals to get money by drawing check from the bank. For example today many organizations provide their employees bills from the bank through the checking accounts. Mortgages: Mortgage is the asendation of property and taking money against the property. In Bangladesh more or less all the nationalized commercial and private banks provides loan against the mortgage property. The mortgage property are likely to be land, buildings, business assets and so on. In recently many private banks provide loans against the persons job contract. Personal Loans: Through meeting some categories many banks provides loans to the individual persons. Where there is no others personal asset to the persons the banks provides micro credit to them and trained them to utilized the fund and return back the debt. The Grameen Bank, Bangladesh Krishi Bank, Sonali Bank, Janata Bank, Agrani Bank, Dutch Bangla Bank and a number of NGOs provide these types of services to the poor and grass root level. Micro Credit: The concept of micro credit is innovated by prof. Dr. younus is becoming get the nobel peace prize. This concept have an practical and lifelong effect to the grassroot level to poverty alleviation and national economics stability. This micro credit is given to the grassroot level poor to becoming the economic unit for the nation. Prof. Younis is the man introduced this theme to the world first. Today all the world use this tool as poverty reduction and enhancing development. Many national and international organization working in Bangladesh introduce this technique.

 Agricultural Credit: Agricultural credit is provided by the nationalized commercial and development banks to stable the agriculture sector. Bangladesh Krishi Bank is mainly provided the agricultural credit to the poor as a agricultural support. These credit are mainly given on the basis of a minimum rate of interest. Moreover the govt. sometimes withdrawals all the principle amount to it as a agricultural incentives to them and the economy. Credit Card: The 'credit card', though a new phenomenon in business and transaction arena which had already won the hearts of millions across the globe, has set its foot in this part of the world with its magical power and becoming a way of life here by offering its handy feature and usefulness. In the advent of Information Technology and globalization, now shoppers need not worry about money, all they need is willingness and a credit card to buy anything they want at any places across the 'Global Village'. Worldwide access, acceptability and popularity as well of credit cards have rose to such an extent that it is now posing a threat to theory of old 'hard-cash' possession of currencies amid growing sense of insecurity worldwide. The forward march of 'plastic money', the other name of the credit card, is so rapid that the whole concept of monetary system needs immediate review as it has put a question mark in the very existence of paper money. A credit card is a great financial tool. It can be more convenient to use and carry than cash, and they offer valuable consumer protections. Paper money and coin are risky and burdensome for carrying. One can avoid the toll of finger-counting changes in this system. Dollars, Pounds or Taka can be plundered, lost or stolen. But there is no such fear for card. The cardholder is given a code number called PIN (Personal Identification Number) without which the card cannot be used at sales or services points where the PIN is required. Only the owner of the card will be entitled to use it. In case the card is stolen or lost the clients' bank will issue a fresh card. History of credit card: The card facility was first introduced in the United States in the beginning of the 20th century. Western Union, a US money transfer company, started issuing an embossed metal plate to its preferred customers in 1914. The cardholder had to pay an annual subscription to join the club. This was the beginning of the charge card. In the 1920s, a shopper's plate - a "buy now, pay later" system - was introduced in the USA. It could only be used in the shops which issued it. In 1950, Diners Club and American Express launched their charge cards in the USA, the first "plastic money". In 1951, Diners Club issued the first credit card to 200 customers who could use it at 27 restaurants in New York. But it was only until the establishment of standards for the magnetic strip in 1970 that the credit card became part of the information age. 1958 American Express Bank, like Dinner Club, started card on travel and entertainment. By 1959 the system evolved in great magnitude. A cardholder was allowed to pay off the full amount at the end of the month or to spread payment to suit his or her requirements. The customer's monthly payment included a finance charge on the unpaid balance. In 1960 Bank of America introduced its own card, the Bank Americacard and offered license to other banks in 1966 that brought this system into world arena. A good number of banks across the world bought the license and marketed credit cards. On the other hand, in 1967 four California banks changed their name from the California Bankcard Association to Western State Bankcard Association (WSBA). WSBA opened its license to other financial institutions. Its bankcard product was known as Master Charge. Numerous financial institutions became Master Charge members to compete with Bank Americard. In 1977 Bank Americard was renamed as Visa USA/Visa International and in 1979 master Charge changed its name to Master Card maintaining the lofty standard to meet up the customers' expanded needs. Automated Teller Machines (ATM): Allow customers 24 hours access to their checking accounts. They can pay bills as well as withdraw cash from the ATM booths. In addition, if the banks ATMs are part of a bank network (such as, CIRRUS, PLUS or HONOR), retail depositors can gain direct nationwide-and in many cases international-access to their deposit accounts by using the ATMs of other banks in the network to draw on their accounts. Point-of-Sale Debit (POS) Cards: Allow customers who choose not to use cash checks, or credit cards for

purchase to buy merchandise using debit card/point of sale (POS) terminals. The merchant avoids the check float and any delay in payment associated with credit card receivables since the bank offering the debit card/POS service immediately and directly transfers funds from the customers deposit account to the merchants deposit accounts at the time of card use. Unlike check or credit card purchases the use of a debit card results in an immediate transfers of funds from the customers account the merchants accounts. Many of our NCBs provide the POS service to their retail customers. The Standard Chartered Bank, Bank Al-Falah, Dhaka Bank, Premier Bank, Prime Bank, Agrani Bank, HSBC Bank and Janata Bank. Electronic-Banking: Connects all the customers in a network of internet. The customers or account holders can make payment from the home through electronic money transfer and so on. Today in Bangladesh many of the electronic money transfer is made on the sector of telephone bill, water bill, cell phone bill and electric bill payment. Many of the foreign money transfer is made through the electronic money transfer system. The standard chartered bank, HSBC Bank and American Express Bank was first introducing the Electronic Banking in Bangladesh. Later many of our national Banks like, Islami Bank, Prime Bank, Dutch Bangla Bank, Al-Falah Bank are using this system.

Retail banking ppt Presentation Transcript

1. RETAILBANKINGBy Amit kumar saini Retail banking is typical mass-market banking where individual customers use local branches of larger commercial banks. Services offered include: savings and checking accounts, mortgages, personal loans, debit cards, credit cards, and so2. INTRODUCTION

By the last quarter of 19th century banks were consolidating their branch networks so that they could operate in a more integrated manner. Organized banking services started in 15th and 16 century Europe, when banks began opening branches in commercial areas of large cities3. HISTORY

Multiple customer groups Multiple channels of distribution Multiple products4. Todays retail banking sector ischaracterized

Over the last 5 years CAGR has been over 35% In 2004-05, 42% of credit growth came from retail Indian retail banking has been showing phenomenal growth5. The future of retail banking:A global perspective

Rural areas offer tremendous potential too which needs to be exploited6. Thebank you are familiar with and which knows you can also offer you a wide range of other services, such as mortgages and insurance. Your money is much more secure than in a box under your bed and you can buy goods, be paid, and sell things without cash changing hands7. Advantages

RetailBanking focuses on individual and small units Retailbanks offer a variety of ways you can access your account and manage your money8.

Customize and wide ranging products are available Surplus deployable funds can be put into use by the banks The risk is spread and the recovery is good9. Banksare a business, and they need to make money from looking after yours. If the bank decides to apply charges to your account (within the terms of the account), you may only find out about it afterwardsfor example if you accidentally go overdrawn without permission. If you disagree with a charge, you will need to contest it to recover the money.10. Disadvantages

Theobjective of the Retail Bank is to provide its target market customers a full range of financial products and banking services, giving the customer a one-stop window for all his/her banking requirements11. Retail Banking services

12. Accounts & Mobile Banking Internet Banking Fixed Deposits Trading accounts Current Accounts Savings Accounts ATMDeposits

Education loan Loans against Securities Commercial Vehicle Loans Car Loans Personal Loans Home Loans13. Loans