What are the Advantages of Retail Banking?


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ADVANTAGES
Retail banking has inherent advantages outweighing certain disadvantages. Advantages are analyzed from the resource angle and asset angle.

 

Resource Side

  • Retail deposits are stable and constitute core deposits.
  • They are interest insensitive and less bargaining for additional interest.
  • They constitute low cost funds for the banks.
  • Effective customer relationship management with the retail customers built a strong customer base.
  • Retail banking increases the subsidiary business of the banks.

 

ASSETS SIDE

  • Retail banking results in better yield and improved bottom line for a bank.
  • Retail segment is a good avenue for funds deployment.
  • Consumer loans are presumed to be of lower risk and NPA perception.
  • Helps economic revival of the nation through increased production activity.
  • Improves lifestyle and fulfils aspirations of the people through affordable credit.
  • Innovative product development credit.
  • Retail banking involves minimum marketing efforts in a demand –driven economy.
  • Diversified portfolio due to huge customer base enables bank to reduce their dependence on few or single borrower
  • Banks can earn good profits by providing non fund based or fee based services without deploying their funds.

 

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BMS Team

We, at BMS.co.in, believe in sharing knowledge and giving quality information to our BMS students. We are here to provide and update you with every details required by you BMSites! If you want to join us, please mail to contact@bms.co.in.

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