The Banks activity includes Lending and Borrowing of Money to and from customers. The customer has come to realize somewhat belatedly that he is the king. The customer’s choice of one entity over another as his principal bank is determined by considerations of service quality rather than any other factor. He wants competitive loan rates but at the same time also wants his loan or credit card application processed in double quick time. He insists that he be promptly informed of changes in deposit rates and service charges and he bristles with ‘customary rage’ if his bank is slow to redress any grievance he may have. He cherishes the convenience of impersonal net banking but during his occasional visits to the branch he also wants the comfort of personalized human interactions and facilities that make his banking experience pleasurable. In short he wants financial house that will more than just clear his cheque and updates his passbook: he wants a bank that cares and provides great services.


Retail banking is, however, quite broad in nature – it refers to the dealing of commercial banks with individual customers, both on liabilities and assets sides of the balance sheet. Fixed, current / savings accounts on the liabilities side; and mortgages, loans (e.g., personal, housing, auto, and educational) on the assets side, are the more important of the products offered by banks. Related ancillary services include credit cards, or depository services. Today’s retail banking sector is characterized by three basic characteristics:
• multiple products (deposits, credit cards, insurance, investments and securities);
• multiple channels of distribution (branch, internet); and
• multiple customer groups (consumer, small business, and corporate).

Drivers of banking business in India

Some of the basic reasons which led to the retail banking growth are as follows:

• First, economic prosperity and the consequent increase in purchasing power have given a fillip to a consumer boom. During the 10 years after 1992, India’s economy grew at an average rate of 6.8 percent and continues to grow at almost the same rate – not many countries in the world match this performance.
❖ Second, changing consumer demographics indicate vast potential for growth in consumption both qualitatively and quantitatively. India is one of the countries having highest proportion (70%) of the population below 35 years of age (young population). The BRIC report of the Goldman-Sachs, which predicted a bright future for Brazil, Russia, India


The services offered by Banks are Lending (Assets) and Borrowing (Liabilities),

❖ Liabilities
> Savings Bank A/C
> Current A/C
> Fixed Deposit
> Term Deposit
> Recurring Deposit
> Monthly Income Deposit
> Liquid Deposit

❖ Assets
> Two wheeler Loans
> Personal Loans
> Commercial Vehicles Loans
> Construction Equipment Loans
> Others (Mutual Fund and Insurance)