(from Unit 3 of your IIBF Book)
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📚 Retail Banking – An Overview
Retail banking = Banking services for individuals (not corporates or governments).
Examples: Savings accounts, home loans, credit cards, lockers, etc.
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🧠 What is Retail Banking?
Feature Explanation
Definition Banking services directly offered to individuals
Scope Covers both deposits and loans
Customer Individual persons (not businesses)
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🧾 Retail Deposit Products:
Product Details
Savings Account For salaried individuals, earns interest
Current Account For businesses, no interest, high transaction volume
Term Deposits Fixed period investment with higher interest
Recurring Deposits Monthly deposits + lump sum on maturity
No Frills / Zero Balance A/c Basic accounts for financial inclusion
Senior Citizen Schemes Extra interest for senior citizens
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🏠 Retail Loan Products:
Product Usage
Home Loan To buy/build/renovate a house
Auto Loan Buy 2W or 4W vehicles
Personal Loan For marriage, education, etc. (unsecured)
Education Loan Study in India or abroad
Consumer Loans Buy electronics/furniture
Credit Cards Short-term, unsecured credit
Crop Loans For farmers’ cultivation expenses
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📈 Why Retail Banking is Growing in India (Growth Drivers):
1. Young Population: 70% below 35 yrs
2. Higher Incomes → More purchasing power
3. Urbanisation → Lifestyle loans in demand
4. Credit Culture: Earlier stigma of “loans = bad” is fading
5. Tech Convenience: UPI, Net Banking, Cards, ATMs
6. Bank Diversification: Retail loans are less risky (lower NPA)
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🌟 Opportunities in Retail Banking:
Middle-class & salaried people = huge market
Govt support via Financial Inclusion
CIBIL helps in assessing borrower creditworthiness
Housing loans = lowest NPAs among retail loans
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❓ MCQs to Test Yourself:
1. Retail banking deals with:
a) Industrial units
b) Government departments
c) Individual customers ✅
d) NGOs
2. Which account is designed for low-income groups?
a) Current Account
b) Recurring Deposit
c) No Frills Account ✅
d) Fixed Deposit
3. Which of the following is not a retail loan?
a) Housing Loan
b) Working Capital Loan ✅
c) Personal Loan
d) Education Loan
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✅ Task for Today:
Identify 5 retail products you handle at your branch.
Ask yourself how your bank uses them to cross-sell.
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