18-05-2012, 03:15 PM
“RETAIL BANKING AND RETAIL CREDIT”
RETAIL BANKING AND RETAIL CREDIT”.doc (Size: 1.41 MB / Downloads: 119)
ABSTRACT
The objective of the study undertaken is profit maximization of retail banking operations of Bank of India. The first research conducted in this work aims to understand the view of customers regarding retail banking products of Bank of India .The second research in this work determines views of customers of Bank of India, State Bank of India, ICICI Bank and Punjab National Bank who have availed home loan, education loan, personal loan and auto/vehicle loan.
To achieve the objective descriptive approach is adopted.Primary data is obtained with the help of questionnaire. Secondary data is obtained from company website, brochures (internal) and internet (external).
INTRODUCTION
“RETAIL BANKING AND RETAIL CREDIT”
Retail banking refers to banking in which banks undergo transactions directly with consumers, rather than corporations or other banks. With a jump in the Indian economy from a manufacturing sector, that never really took off, to a nascent service sector. Banking as a whole is undergoing a change. A larger option for the consumer is getting translated into a larger demand for financial products and customization of services is fast becoming the norm than a competitive advantage. Retail banking in India has fast emerged as one of the major drivers of the overall banking industry and has witnessed enormous growth in the recent past. In the present context of highly competitive banking scenario, retail banking constitutes the prime base for growth and resilience for any bank, be it global or local. Retail banking has been the axis of all successful banks. In a developing economy like India having a huge base of consume population with sustained growth in education and standard of living, the scope for enhanced retail banking is substantial. Intrinsic strength of the bank in terms of customer base, business volume, profitability and competitive edge in the market place. Retail segment is a segment where number matters. Larger the customer base in retail portfolio, greater is the volume of business and higher the fundamental strength.
The Retail Banking is a banking service that is geared primarily toward individual consumers. Retail banking is usually made available by commercial banks, as well as smaller community banks. Retail banking focuses strictly on consumer markets. Retail banking entities provide a wide range of personal banking services, including offering savings and checking accounts, bill paying services, as well as debit and credit cards. Through retail banking, consumers may also obtain mortgages and personal loans. Although retail banking is, for the most part, mass-market driven, many retail banking products may also extend to small and medium sized businesses.
HISTORY OF BANK OF INDIA
Bank of India was founded on 7th September, 1906 by a group of eminent businessmen from Mumbai. The Bank was under private ownership and control till July 1969 when it was nationalised along with 13 other banks. Beginning with one office in Mumbai, with a paid-up capital of Rs.50 lakh and 50 employees, the Bank has made a rapid growth over the years and blossomed into a mighty institution with a strong national presence and sizable international operations. In business volume, the Bank occupies a premier position among the nationalised banks. The Bank has 2644 branches in India spread over all states/ union territories including 93 specialised branches. These branches are controlled through There are 24 branches/ offices (including three representative offices) abroad. The Bank came out with its maiden public issue in 1997. Total number of shareholders as on 30/09/2006 is 2,25,704.
While firmly adhering to a policy of prudence and caution, the Bank has been in the forefront of introducing various innovative services and systems. Business has been conducted with the successful blend of traditional values and ethics and the most modern infrastructure. The Bank has been the first among the nationalised banks to establish a fully computerised branch and ATM facility at the Mahalaxmi Branch at Mumbai way back in 1989. The Bank is also a Founder Member of SWIFT in India. It pioneered the introduction of the Health Code System in 1982, for evaluating/ rating its credit portfolio. The Bank's association with the capital market goes back to 1921 when it entered into an agreement with the Bombay Stock Exchange (BSE) to manage the BSE Clearing House. It is an association that has blossomed into a joint venture with BSE, called the BOI Shareholding Ltd. to extend depository services to the stock broking community. Bank of India was the first Indian Bank to open a branch outside the country, at London, in 1946, and also the first to open a branch in Europe, Paris in 1974. The Bank has sizable presence abroad, with a network of 23 branches (including three representative office) at key banking and financial centres viz. London, New York, Paris, Tokyo, Hong-Kong, and Singapore. The international business accounts for around 20.10% of Bank's total business.
RETAIL BANKING PRODUCTS
DEPOSITS
“BOI SAVINGS PLUS SCHEME”
SALIENT FEATURES
BOI Savings Plus is a mix of Savings Bank Account and Term Deposit Account.
It aims at maximizing the earnings for the customer, without jeopardizing liquidity.
Minimum balance in SB portion is Rs.25,000/- and minimum balance in Term Deposit Portion is Rs.5,000/-.
Any amount in excess of Rs.25,000/- in the SB portion will be auto swept out into the SDR or DBD portion in multiples of Rs.5,000/- on daily basis.
In the SDR portion, monies can be invested for any period from 15 days to 179 days, as per the customer's choice. In the DBD portion, monies can be invested from 6 months upto and including 10 years, as per the customer's choice.
Upon maturity, the principal in the SDR/DBD portion would be auto-renewed for an equal period, while the interest would be credited to the SB portion on the concerned due date. The same, if not withdrawn can be swept back again into SDR/DBD for a period of the customer's choice.
In case the balance in the SB portion is short of the required level to meet cheques presented in the A/c., funds from SB Plus portion will be auto swept in, into the SB portion, in multiples of Rs.1,000/- on daily basis. Although this would amount to Payment before Maturity, no penalty would be charged. The latest SDR/DBD deposit would be closed before maturity (in multiples of Rs.1,000/-) to ensure that the customer does not have to bear higher loss (i.e. LIFO principle to apply).
Non-maintenance of minimum balance prescribed in the SB portion, will attract a penalty of Rs.200/- per quarter.
Rate of Interest on the SB portion would be 3.5% p.a., while the Rate of Interest on the SDR/DBD portion will depend on the tenure for which each deposit is placed, and at the ruling Interest Rate as on the date the deposit is placed or renewed.
TDS norms would apply as per extant rules.
CONCLUSION
On the basis of the observation made by the analysis, the following conclusions have been drawn for the first research of the 75 customers of Bank of India
28% for 10 – 20 years and 17.3 % have been Bank of India customers for above 20 years. This proves the loyalty of the customers towards the bank.
91% of the respondents have not availed any retail service (Safe Deposit vault, Safe custody services, Internet Banking, BOI Star e-pay, Remittances).Majority of the respondents have not availed any retail service from Bank of India.
74.7% of the respondents have not availed any card facility (Debit card, Gold card, Taj premium card, India card, Kisan card, Exporter’s gold card, Gold card International). Majority of the respondents have not availed any card facility from Bank of India.