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.



  • 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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