PRESENTATION ON

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• RETAIL LENDING BUSINESS IMPORTANCE STRATEGIES
  FOR MAINTAINING GROWTH
• PRESENTED BY
• Mr. Dhananjay Puthran,
• Mr. Indir Motwani, Mr. Preeth S,
• Mr. Madhukar S Kamath.

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• In a recent book,
• Retail banking has been described as hotter
  than vindaloo
• Considering the fact that vindaloo, the
  Indian-English innovative curry available in
  umpteen numbers of restaurants of London, is
  indeed very hot and spicy, it seems that retail
  banking is perceived to be the in-thing in
  todays world of banking.

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Introduction

• The issue of retail banking is extremely
  important and topical.
• Retail banking is quite broad in nature - it
  refers to the dealing of commercial banks with
  individual customers, both on liabilities and
  assets sides of the balance sheet. Fixed, current
  / savings accounts on the liabilities side and
  loans e.g., personal, housing, car, and
  educational, on the assets side are the more
  important of the products offered by banks.
  Related ancillary services include credit cards,
  or depository services.

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Characteristics

• Todays retail banking sector is
  characterized
• by three main basic characteristics
• -Multiple products (deposits, credit cards,
• insurance, investments and securities)
• -Multiple channels of distribution (call
• centre, branch, Internet and kiosk) and
• -Multiple customer groups (consumer,
• small business, and corporate).

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Current Scenario

• Across the globe, retail lending has been a
  spectacular innovation in the commercial banking
  sector in recent years. The growth of retail
  lending, especially, in emerging economies like
  India, is attributable to the rapid advances in
  information technology, the evolving macro-
  economic environment, financial market reform,
  several micro-level demand and supply side
  factors.

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• India too experienced a surge in retail
  banking. There are various pointers towards
  this.
• Retail loan is estimated to have accounted for
  nearly one-fifth of all bank credit.
• Housing sector is experiencing a boom in its
  credit.
• The retail loan market has decisively got
  transformed from a sellers market to a buyers
  market. Gone are the days where getting a retail
  loan was somewhat cumbersome.

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Reasons contributing to this retail growth

• Economic prosperity and the consequent increase
  in purchasing power has given a fillip to a
  consumer boom. India's economy grew at an average
  rate of 7-8 percent and continues to grow almost
  at the same rate not many countries in the
  world match this performance.
• Changing consumer demographics indicate vast
  potential for growth in consumption both
  qualitatively and quantitatively. India is one of
  the countries having highest proportion (70) of
  the population below 35 years of age. The BRIC
  report of the Goldman-Sachs, which predicted a
  bright future for Brazil, Russia, India and
  China, mentioned Indian demographic advantage as
  an important positive factor for India.
• 
  contd

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• Reasons contributing to this retail growth..
• The Treasury income of the banks, which had
  strengthened the bottom lines of banks for the
  past few years, has been on the decline during
  the last two years. In such a scenario, retail
  business provides a good vehicle of profit
  maximisation.
• Considering the fact that retails share in
  impaired assets is far lower than the overall
  bank loans and advances, retail loans have put
  comparatively less provisioning burden on banks
  apart from diversifying their income streams.
• Decline in interest rates have also contributed
  to the growth of retail credit by generating the
  demand for such credit.

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PNB SCHEMES

• The loans are marketed under attractive brand
  names to differentiate the products offered by
  different banks. As the Report on Trend and
  Progress of India, has shown that the loan values
  of these retail lending typically range between
  Rs.20,000 to Rs.200 lakh. The loans are generally
  for a of duration of five to seven years with
  housing loans granted for a longer duration of 25
  years. Credit card is another rapidly growing
  sub-segment of this product group.

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• PNB SCHEMES..
• The products offered in our bank are
• Housing loans (Public / NRI )
• OD for existing Housing Loan borrowers
• Conveyance Loan Car 2 wheeler
• PNB Vidya Lakshyapurti (Educational loan)
• PNB Baghban (Reverse Mortgage)
• Scheme for financing Traders.
• 
  Contd

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• PNB SCHEMES
• Scheme for financing Property Owners Against
  Future Lease Rentals
• Scheme for financing professional Medical
  Practitioners
• Scheme for financing training/ skill up-
  gradation of construction workers
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  Contd

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• PNB SCHEMES.
• Personal Loan Scheme for Pensioners Public
• PNB Doctor Loan scheme (Gramin Chikitsak)
• Gold Jewellary Advance
• Consumer Loan
• PNB Credit Card
• 
  

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Challenges

• Sustaining Customer Loyalty
• NPA reduction
• Fraud Prevention
• Avoid Debt Trap for Customers
• Competition from New Generation Banks
• Bringing Rural masses into mainstream banking
• Improving quality of Retail Credit

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Future Prospects-Reasons to Cheer

• 720 million Indians to join consuming age by 2010
  
• More than 32 rise in urbanisation by 2010
• 10 annual growth in Retail market since 2000
• 7 of the population is engaged in retail sector
• 5.5 retail outlets per 1000 population, highest
  in the world
• 25-30 annual growth in retail loans and credit
  cards
• Organized Retail is predicted to capture
• 15 20 market share by 2010

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Strategies for Future

• Performance oriented Leadership
• Sophisticated marketing Sales
• Efficient distribution Channels
• Superior Credit Policy, Procedures Skills
• Reaching to Masses- Higher penetration
• Customer segmentation/ differentiation
• Promoting LOW RISK retail lending products
• Offer an array of products financial advisory
• Renewed emphasis on superior execution
• by front-line employees

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• Suggestions..
• Tie-ups with Gymkhanas/clubs such as Bombay
  Gymkhana, Lions club, Rotary club for their
  members to avail various popular schemes at
  concessional rate.
• Tie-ups with major industrial houses for
  encouraging PNB Retail loans.
• Tie-ups with reputed Builders such as M/s Ravi
  Developers, Raheja, Hiranandani for Housing loan.
• 
  Contd

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• Suggestions
• Cycle/Moped loans to Secondary school/ college
  going students of economically weaker sections
  at DRI/concessional rate in rural/ semi urban
  areas.
• There should be an increased focus on retail
  lending where the risk is spread over a number of
  borrowers and there is a higher interest rate
  margin.
• 
  

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Guiding Principles of The uncrowned King of
Indian Industry, Jehangir Ratanji Dadabhoy
Tata (JRD to the world )

• Nothing worthwhile is ever achieved without deep
  thought and hard work
• One must forever strive for excellence, or even
  perfection, in any task however small, and never
  be satisfied with the second best
• No success or achievement in material terms is
  worthwhile unless it serves the needs or
  interests of the country and its people and is
  achieved by fair and honest means
• Good human relations not only bring great
  personal rewards but also are essential to the
  success of any enterprise.

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Thank You! Wish You All the Best May God Bless
You