“RETAIL BANKING SYSTEM IN INDIA” NCRD’S STERLING INSTITUTE OF MANAGEMENT STUDIES

PRESENTED BY:

VARSHA GOLEKAR

MMS-II (FINANCE)

A-18

Overview Of Bank Performance In Last Five Years

AS IS / BEFORE

TO BE /NOW

PRIORITY Credit & Risk Customers & retailing

APPROACH Secure & conventional

location for financial

transactions

(Banks dictate terms)

Customer centric retail

banking

(Customer is King)

CUSTOMER BASE Corporation & other banks Retail consumers,

corporate clients, other

banks

FORMATS Single Entity Multi-location, multi

branch

MORE EMPHASIS

ON

Improving transactional

efficiency

Providing service and

value to consumers

CUSTOMIZATION Rarely there Highly customized

Retail Banking in Retail Stores Way…

RETAIL BANKING SYSTEM

Product leader

Utility Processor Distributor

RETAIL BANK OF TODAY – COMPLEX BANK RETAIL BANK OF FUTURE – LEAN BANK

“LEADERS”

Retail banks needs

to identify their

focus area and build

capability in one or

two only.

P

U D

Retail banks,

continuing to

pursue “ a doing

everything

approach” will not

be able to build

strong capability in

all models.

P

U D

“LAGGARDS”

PATH FORWARD FOR RETAIL BANKS

Retail Banking Product Portfolio

Deposit Loans & Advances Services

Fixed deposit

Saving account

Current Account

Recurring Account

NRI Account

Corporate Salary

Account

Demat Account

Minor Account

Senior Citizenship

Account

Housing Loan (Sadasavli

Housing Loan)

Personal Loan

Vehicle Loan (Auto-

Finance Loan)

Education Loan

Professional Loan

Loan against share

And securities

Swayam siddha loan

Kalpataru Consumer

finance

Travel Now

Credit card

Debit card

Net bankingMobile

banking

Phone banking

ATM

Smart card

24*7 cheque issuance

facility

INCORPORATION: 1972

BRANCHES: 64

PROJECT PLACE: CENTRALIZED RETAIL BANKING CELL (CRBC) , NAUPADA.

Techno-savvy Bank

Multiple delivery channels such as ATM, Internet, Mobile

First Bank in Co-operative sector to install Cheque Depository Machines and Automated

Cheque Issuance Machine at 63 branches, which are operational 24 X 7

Bancassurance: Agent for Max New York Life Insurance Co. Ltd. for Life Insurance products

and with The Oriental Insurance Co. Ltd. for General Insurance

MULTI-STATE SCHEDULED CO-OPERATIVE BANK

Processing Model

Stand Alone Model

Centralised Model

Refers to processing of retail loans independently at the branch level. Branch will market the retail loans and process and sanction the loans based on the eligibility of the applicants.

Refers to processing of loans at a centralised place depending upon the geography of branches.

PROCESSING OF RETAIL LOANS

Receipt of application and details from the

branch Process the application

Verification check and arrive at credit score

The valuation (wherever applicable)

through the panel valuer

Obtain the Encumbrance Certificate and legal opinion from

lawyer

Arrive at the quantum of finance based on

type of loan

Advising the sanction of the loan to the

borrower/branch with the terms and

conditions

Receiving acceptance for the terms and

conditions

Execution of documents for the loan and also

completing the mortgage formalities (wherever applicable)

Release of the loan to the borrower

Verification of end use by the borrower

Auditing is done by auditors on weekly

basis sometime daily basis.

WORKFLOW OF CENTRALIZED RETAIL BANKING CELL, TJSB

A secured loan is held against your property

Disbursement time of bank

It can cost you to pay back the loan early

You may not be offered the rate you see advertised

The longer the term, the more interest you'll pay

A credit card may be a better option for short term lending

The best rates are available to those with the best credit

scores

There may be other hidden fees

Service , processing charges, private equity, franking

charges, insurance charges

Your repayments may be variable – Fixed or Floating

You don't have to buy PPI when you take out a loan

IMPORTANT THINGS YOU NEED TO KNOW BEFORE APPLYING FOR

LOAN

GENERAL DOCUMENTS REQUIRED FOR LOAN APPRAISAL PROCESS

GEN

ERA

L D

OC

UM

ENTS

1. Promissory note

2. Term loan agreement

3. Deed of guarantee

4. Section 60 – Borrower, Guarantor

5.Letter of Lien and set off

6. Post dated cheques

Housing loan

1. Society NOC

2. Sale deed

3. Title Deed

4. Valuation Report

5. Credit Report

6. Non encumbrance certificate

7. Mortgage deed

Other supporting documents

Personal Loan

1. End use declairation

Supporting Doucuments

Education Loan

1. Institute fees structure

2. Fee receipt

3.Educational Certificates

Other supporting document

RETAIL BANKING RISK

• Change in Market Price

• Processing Failures & Frauds

• Regulatory Compliance

• Customer Fall to Pay

• Losing Money

• Wrong Strategy

BUSINESS RISK

CREDIT RISK

MARKET RISK

OPERATING RISK

Recovery Policy clauses - Approaches to recovery of loan, general guidelines

Giving notice to Borrowers- Written communication, telephonic reminders or visits by TJSB bank recovery agent

Repossession of security- To recover dues and not to deprive the borrower, realisation of security after notice to borrower

Valuation and Sale of property- Sale of repossessed property by TJSB bank - opportunity for borrower to repurchase the property

RECOVERY OF LOAN

DATA ANALYSIS AND INTERPRETATION OF

TJSB SAHAKARI BANK LTD.

• TJSB’s deposits has increased by 25.16% - shows opportunities for further growth.

• Advances has increased by 32.55% in 2012, shows retail segment growth

• Gross NPA has decreased and CRAR has also decreased by 0.61%. It also reflects the efficacy of banks’ credit risk management and the recovery environment.

Outcome Here

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

Deposits Advances Net Profit Gross N.P.A

C.R.A.R

% Increase/Decrease 25.16% 32.55% 21.20% -0.79% -0.61%

% Increase/Decrease

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