What is Retail Banking and Services provided by Banks to Customers


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.

Wiki Finance pedia - e-learning course on Banking wikipedia Chapter - What is Retail BankingExample 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:

  • Checking accounts

  • Traveller’s cheques

  • Credit cards

  • ATM cards

  • Debit cards

  • Savings accounts

  • Current accounts
  • Mortgages

  • Home equity loans

  • Personal loans

  • Educational Loans

  • Deposit Bills / Fixed deposits

  • Retirement Schemes

  • Children Saving Schemes

  • Apart from this some banks offer specialised accounts such as:

    – Sweep accounts

    – Money market accounts

    – Individual Retirement Accounts

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