Retail Banking Definition:
Retail Banking is the provision of consumer-oriented services to individual consumers. This does not include services to companies, corporations, entrepreneurs or other banks. Services offered include checking transactions and saving accounts, business debit cards, personal debit cards, international debit cards, business credit cards, personal credit cards, international credit cards, deposit plans, financial investments plans, personal wealth management, retirement plans, children plans, educational plans, mortgage loans, personal loans, business loans and other diversified types of loans. These services distinguish banking services from banking services like investment banking, commercial banking, etc. In some cases Investment banks, commercial banks or large banks persevere department of business relationship with retail customers as well.
Commercial banks in United State of America are also considered as Retail Banks and investment banks are limited to Investing capital in markets activities. This partition was cancelled in year 1990s and henceforth Commercial bank deals with loans and deposits from corporations or large businesses and Retail bank deals with loans and deposit from common individuals.
How Retail Banking works:
Retail banks offers services to common people. Retail refers to front shop for commercial banking services. Many commercial banks deals with retail banks for services and products as well.
Example of Retail Banking:
Jennifer goes to ICICI Bank with the intension to obtain personal banking services with Rs.10,000/- in hand. She deposit Rs.10,000 paycheck into saving account and meet bank representative for various schemes offered by bank. Bank representative explain him the retirement schemes, children education saving plan, home loan schemes, etc. After discussion she considered to apply for home loan. Jennifer was very much satisfied with bank services because at one place she was able to deposit money, plan for future and get best suitable scheme for her. customer satisfaction is one of the primary focus for retail banks.
How Retail Banking plays an important role in individual life:
Retail banking is a structure that allows products and services in one place and can be avail from any of the branch locations. Large retail banks are also termed as international retail banking where individual can obtain services worldwide. Now days, online banking provide individual product and services information on mobile retail banking over cell phone or online retail banking wrapped up in websites. Retail banking is mainly known for small business banking or personal banking.
Services Offered by Retail Bank:
- Current accounts
Home equity loans
Deposit Bills / Fixed deposits
Children Saving Schemes
Apart from this some banks offer specialised accounts such as:
– Sweep accounts
– Money market accounts
– Individual Retirement Accounts
- Tutorial Course - Basics of Banking and Financial Services for Beginners -
» e-Learning Chapter 1: What is Bank and Role of Bank in Economic Development.
» e-Learning Chapter 2: Different Types of Financial Services Provided by Banks.
» e-Learning Chapter 3: Different Types of Banking and Financial Institutions.
» Currently Reading: What is Retail Banking and Services provided by the Banks.
» e-Learning Chapter 5: What is Commercial Bank and Services offered by Banks.
» e-Learning Chapter 6: What is Private Banking and Services offered by Best Banks.
» e-Learning Chapter 7: What is Investment Banking and Services offered by Bankers.
» e-Learning Chapter 8: What is Investment and How to Start Systematic Investment Plan.
» e-Learning Chapter 9: What is Fixed Income Securities Market.
» e-Learning Chapter 10: What are Bond Funds and Difference between Stocks and Bonds.
» e-Learning Chapter 11: What is Stock Market and How to Invest in Stock Market.
» e-Learning Chapter 12: What is a Mutual Funds and Types of Mutual Funds with Examples.
» e-Learning Chapter 13: What is Futures Trading? Who, Where, How to Trade in Future Contracts.
» e-Learning Chapter 14: What is Options Trading and How does Options Trading Works.
» e-Learning Chapter 15: Banking Quiz – Basics of Banking and Financial Services for Beginners.