Present Scenario

Indian retail banking has been showing

phenomenal growth
In 2004-05, 42% of credit growth came from
retail
Over the last 5 years CAGR has been over 35%
Retail credit levelcrossed Rs.189K Crore in
2004-05
Market has transformed into a buyers market
from a sellers market
Comprises of multiple products, channels of
distribution and multiple customer groups
Economy vs. Retail Banking
Retail assets are just 22% of the total banking
assets of India
Contribution of retail loans to GDP:
India 6% China 15 %,
Thailand 24% Taiwan 52%
Indian population below 35 yrs of Age 70 %
Reach of Formal Banking Channels 20-25%
of Indian population
Source: Cygnus Industry Insight
Auto
28%
Other personal
Loans
16%
Home
49%
Consumer
Durables
7%
Market Share: Retail Loan - 2005
Drivers Of Retail Growth
CHANGING CONSUMER DEMOGRAPHICS
Growing disposable incomes
Youngest population in the world
Increasing literacy levels
Higher adaptability to technology
Growing consumerism
Fiscal incentives for home loans
Changing mindsets-willingness to borrow/lend
Desire to improve lifestyles
Banks vying for higher market share
Industrys response to the change
Any where, Any time Banking
Improved processes/Bundled product offerings
Faster service/Reduced TATs
Customer specific products/offerings on a regular
basis
Bank customer has replaced Branch customer
Focus on understanding customer needs/
preferences
Segmentation/Differentiation of customers
Customer driven strategies
Building relationships
The accelerated retail growth has been on a historically
low base

Penetration continues to be significantly low compared
to global bench marks

Share of retail credit expected to grow from 22% to 36%

Retail credit expected to grow to Rs.575,000 crs by 2010
at an annual growth rate of 25%

Source: Cygnus industry insight

Future Of Retail Banking
Future of Retail Banking Contd.
Dramatic changes expected in the credit
portfolio of Banks in the next 5 years

Housing will continue to be the biggest
growth segment, followed by Auto loans

Banks need to expand and diversify by
focussing on non urban segment as well as
varied income and demographic groups

Rural areas offer tremendous potential too
which needs to be exploited
Strategic prerequisites.
Performance oriented leadership

Sophisticated marketing and sales

Efficient distribution channels

Process efficiency and ease of scalability

Superior credit policy, procedures and skills
Source: Mckinsey
Challenges
Sustaining Customer loyalty

NPA reduction & Fraud prevention

Avoiding Debt Trap for customers

Bringing Rural masses into mainstream banking

Strategies for Future
Reaching to masses : Need to customize
Customer segmentation/differentiation
Data mining/CRM based campaigns
Products per customer/loyalty
Promoting low risk retail lending products

Offer an array of products and financial advisory.

Strategies for Future Contd.
Cost effective expansion
Renewed emphasis on superior execution by
front-line employees
Grow through Alliances:
Hospitality Education
Retailers Automobiles
Consumer Durables Housing/Construction
The bank that best addresses and anticipates
customers needs, delivers consistently higher
quality service and connects to the customer
via their channel of choice wins
Y.Y.Chin, OCBC Bank
Winning Strategy
Thank You !