Banks As Financial Banks As Financial Supermarkets Supermarkets -B.V.Raghunandan, -B.V.Raghunandan, SVS College, Bantwal SVS College, Bantwal Karnataka Bank Staff Karnataka Bank Staff Training College, Training College, Mangalore Mangalore . . November 15, 2006 November 15, 2006
Financial services provided by Indian banks as presented by B.V.Raghunandan in a guest lecture delivered at Karnataka Bank Staff Training College, Mangalore on November 15, 2006
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Banks As Financial Banks As Financial SupermarketsSupermarkets
-B.V.Raghunandan,-B.V.Raghunandan,
SVS College, Bantwal SVS College, Bantwal
Karnataka Bank Staff Karnataka Bank Staff Training College, MangaloreTraining College, Mangalore..
November 15, 2006November 15, 2006
Nationalisation and its Nationalisation and its Impact on BanksImpact on Banks
• Network of BranchesNetwork of Branches• Universal AccessUniversal Access• Implicit Brand EquityImplicit Brand Equity• Professional EmployeesProfessional Employees• Coverage of Both Urban and Rural Coverage of Both Urban and Rural
AreasAreas
Problems CreatedProblems Created
• Non-Performing AssetsNon-Performing Assets• Asset-Liability MismatchAsset-Liability Mismatch• Capital InadequacyCapital Inadequacy• Limited Investment OptionsLimited Investment Options• Regulated Interest RegimeRegulated Interest Regime• Too Much Of Regulation Too Much Of Regulation • Impact of Political CompulsionsImpact of Political Compulsions
Events That Changed the Events That Changed the World of Indian BankingWorld of Indian Banking
• Financial Sector ReformsFinancial Sector Reforms• Opening Up of Insurance SectorOpening Up of Insurance Sector• IT Absorption by Indian BanksIT Absorption by Indian Banks• Money Market ReformsMoney Market Reforms• Reverse Merger of ICICI into ICICI BankReverse Merger of ICICI into ICICI Bank• Establishment of Clearing Corporation Establishment of Clearing Corporation
of Indiaof India• ATMs Emerging as a Business Model ATMs Emerging as a Business Model
RequirementRequirement
• Employee Oriented OrganisationEmployee Oriented Organisation• A Separate BPO ArmA Separate BPO Arm• Longer Business Hours with ShiftsLonger Business Hours with Shifts• Appointment of ProfessionalsAppointment of Professionals• Subsidiaries & Strategic Business UnitsSubsidiaries & Strategic Business Units• Comprehensive Training to Employees Comprehensive Training to Employees
on Financial Markets, Services and on Financial Markets, Services and Derivatives Derivatives
Requirement… Requirement… ContinuedContinued
• Economic ResearchEconomic Research• Changed Mindset for Seamless Changed Mindset for Seamless
Remittance FacilitiesRemittance Facilities• A Bigger and Better Lobby for A Bigger and Better Lobby for
Banking IndustryBanking Industry• More Freedom In Choosing ActivitiesMore Freedom In Choosing Activities• Long Term Profitability vis-a –vis Long Term Profitability vis-a –vis
• Housing FinanceHousing Finance• Sale Of Insurance ProductsSale Of Insurance Products• Sale of Mutual Fund Units & Exchange Sale of Mutual Fund Units & Exchange
Traded FundsTraded Funds• Depository ParticipationDepository Participation• Merchant Banking Merchant Banking • Venture Capital FinancingVenture Capital Financing• Sale of Pure Gold Coins & Custodianship of Sale of Pure Gold Coins & Custodianship of
Gold ETF Gold ETF • Factoring ServicesFactoring Services• Leasing FinanceLeasing Finance• ATM Enabled Business ATM Enabled Business
Corporate Clients’ NeedsCorporate Clients’ Needs
• Accessing Markets through Merchant Banker, Accessing Markets through Merchant Banker, Underwriter, Brokers, Banker To The IssueUnderwriter, Brokers, Banker To The Issue
Banks & Mutual Funds and Banks & Mutual Funds and ETFsETFs
• Fastest Growing MarketFastest Growing Market• Risk- Shy InvestorsRisk- Shy Investors• Tie-Up for Sale and RedemptionTie-Up for Sale and Redemption• Asset Management ServicesAsset Management Services• Network of Branches and ATMsNetwork of Branches and ATMs• Custodians of Gold ETFCustodians of Gold ETF
BancassuranceBancassurance
• Only a Distribution FunctionOnly a Distribution Function• Premium Collection Premium Collection • Investor CounsellingInvestor Counselling• Claim SettlementClaim Settlement• Customer RelationCustomer Relation• Almost Acting As a BPO ArmAlmost Acting As a BPO Arm• Avoidance of Opening of Branches Avoidance of Opening of Branches
by Insurance Companiesby Insurance Companies
ATMs-The Super Giant ATMs-The Super Giant BankerBanker
• All the Functions of a BankAll the Functions of a Bank• A Strategic ModelA Strategic Model• Universal Network SharingUniversal Network Sharing• Payment of Utility BillPayment of Utility Bill• Reservation of Every Kind Reservation of Every Kind • Subscription and Redemption of Mutual Subscription and Redemption of Mutual
Fund UnitsFund Units• Subscription to Money Market Instruments ?Subscription to Money Market Instruments ?• Subscription to Primary market issues ?Subscription to Primary market issues ?• Purchase and Sale of Shares ?Purchase and Sale of Shares ?
Retail BankingRetail Banking• Consumer FinanceConsumer Finance• Issue of Credit CardsIssue of Credit Cards• Sale of Mutual Fund UnitsSale of Mutual Fund Units• Sale Of Insurance Products & Settlement of Sale Of Insurance Products & Settlement of
ClaimsClaims• Payment of Every KindPayment of Every Kind• Reservations of Every KindReservations of Every Kind• Buying & Sale of Foreign ExchangeBuying & Sale of Foreign Exchange• Applying to Primary IssuesApplying to Primary Issues• Stock Broking Stock Broking
• Tax Planning & Tax Payment Tax Planning & Tax Payment • Investment CounsellingInvestment Counselling• Purchase & Sale of Government Purchase & Sale of Government
Bonds Bonds • Purchase & Sale of Money Market Purchase & Sale of Money Market
InstrumentsInstruments• Accreditation, if CIBIL takes it upAccreditation, if CIBIL takes it up
• Self Help Groups Self Help Groups • Micro CreditMicro Credit• Commercial AgricultureCommercial Agriculture• Organised RetailOrganised Retail• Distribution of Insurance ProductsDistribution of Insurance Products• Social Banking Social Banking
ChallengesChallenges
• HR ProblemsHR Problems• Alliance with Insurance Companies: Alliance with Insurance Companies:
Nature of AllianceNature of Alliance• Capital AdequacyCapital Adequacy• Change Management Change Management • Technology AbsorptionTechnology Absorption• Contradictions of RBI & Ministry of Contradictions of RBI & Ministry of
FinanceFinance
TrendsTrends
• Commoditisation of ServicesCommoditisation of Services• Mergers & Acquisitions for Scale of Mergers & Acquisitions for Scale of
OperationOperation• Tie-Ups: For ATMs, OIC, Bank of India & Tie-Ups: For ATMs, OIC, Bank of India &
Union Bank of India, Karnataka Banks’ Union Bank of India, Karnataka Banks’ AllianceAlliance
• Banks Emerging as a Giant Financial Banks Emerging as a Giant Financial Machine for the Entire CountryMachine for the Entire Country
• Impersonal Banking through Internet & Impersonal Banking through Internet & ATMs ATMs