The New Horizon for Banking Sector in India
Those of us who have been closely observing with as much keenness the developments in the banking sector in India, must not have failed the striking features of these developments heralded by the new policy pronouncements made towards making their operations viable, customers or clients- friendly and above all equipping them with all competitive edges in terms of designing customized products, greater professionalization. It is no wonder today to find some of our nationalized banks spreading wings to various parts of the globe and successfully spreading their operational bases in foreign lands.
In the new globalized regime these banks are moving away from the traditional concept of banking and making concentrated efforts to reach out to the customers with newly designed bouquet of products which is a welcome departure from the existing mindset that customers or clients would come on their own to these banks. In this backdrop it is appropriate to examine these innovative changes and their bearing on the large body of customers and clientèle.
In the days not too distant, a customer in need of a fund transfer used to face a lot of delays in this process and now things have truly changed beyond belief. It would be instantaneous ECS which stands for Electronic Clearing System effectively takes care of all our needs. Similarly ATM, Debit & Card Cards, payments of utility bills, Internet Banking, Mobile Banking have added an altogether different dimension to our banking experiences. Banks too have become more conscious in value addition to their services by casting away the traditional mould. These banking outfits are now offering free advisory services, selling insurance products and so on. It is time to delve a little more into these landmark features characterizing the types of banking:
e-Banking:
Perhaps nothing has caught the imagination of the people availing banking services more than this new and novel form of banking which is known as e-banking. This web-based banking has imparted the much-needed dynamism in the entire process by making transactions faster, convenient and cost efficient.
Core Banking Solution:
In the earlier run of things, a customer of a particular bank remained a customer of a particular branch of that bank. With the introduction of Core Banking Solution ( CBS ), a customer is truly the customer of that bank. He or she is advantageously placed to conduct the banking operation from any place irrespective of the fact that he or she is the customer of a particular branch of a bank. Almost all the banks have introduced this feature.
Corporate Banking:
Corporate Banking which is primarily focused on meeting the requirements and demands of the corporate sector, has been extended to new frontiers. Banks provide various loan facilities to corporate entities. These loans are of different kinds strictly keeping in mind the purposes these are put to like overdraft facilities to meet purely short term needs, cash credit facilities, working capital funds and long term and medium term loans to industries. Banks also provide various funds or non-funds based facilities like loan syndication, channel financing, letter of gurantee, letter of credit to the corporate sector. In recent years the multinationals and transnationals are setting up business in India and consequently Indian banks have been competing with foreign banks in bagging their accounts by providing much-improved, professional services in this regard.
Investment Banking:
Many Indian banks have been rendering this particular service both to the corporate as well as non-corporate customers in the matter of investments. The high net-worth individuals are served in their individual investment decisions in stocks, bonds and other instruments. Similarly corporate clients turn to these banks for professional advice for deals like, acquisition, merger etc.
Rural Banking:
As India is predominantly a rural economy and its peculiar banking needs should be properly addressed and catered to. Our banks strive to meet the various needs of rural India in the field of agriculture, Small Scale Industries, Cottage and Village industries, handicrafts etc. In recent times Kiosk Banking too has come into existence in various rural areas adding to the depth of banking services in rural India.
NRI Banking:
Banks are also alive to the special banking needs of the vast diaspora of non resident Indians who have have the world their home and making valuable contributions to the development of Indian economy by making regular remittances in foreign exchange of a substantial character. There are different kinds of NRI accounts like, NRE ( Non Resident External Account ), NRO ( Non Resident Ordinary Account ), FCNR ( Foreign Currency Non Resident Account ) etc.
Retail Banking:
This form of banking has been accounting for significant percentage of total income of many of banks in India. And the services rendered under this head comprises of Housing finance, Auto finance, Mortgage, Loan for White Goods, Personal loans, Educational loans etc.
It is evident that banks have not only been striving to new types of banking but remain engaged constantly to bing in new services and products by practicing the concept of Total Branch Automation, Any Branch Banking affording the facility of operation of accounts from any of the networked branches, balance enquiry, fund transfer, repayment of loan account etc. Almost all the bank have set up Automatic Teller Machines ( ATM ) in every nook and corner of the country to facilitate withdrawal of cash as well as depositing it. Mobile banking too is coming up in a big way to add further value to banking services. Some banks are entering into micro finance targeting low income households to assess their credit requirement and meeting the same. There are bank which have launched full-fledged broking services by registering themselves with SEBI as Depository Participants ( DPs ) or as Underwriters.
Thus it can be said that IT revolution has made its significant impact on the overall banking and banks which make effective use of new technologies with customers at the centre of their schemes would ultimately grow and survive and the coming years are like to witness more innovation in this particular sector.
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