Indian retail banking industry: Opportunities & challenges

Banks play a vital role in spearheading the economic development of the nation and are the main stimulus of the economic progress. The highly regulated and directed banking system has transformed itself into one characterized by openness, competition and prudence. This development conforms to the liberalization and globalization needs of the Indian economy. As gradual up gradation of skills and technology and restructuring and re-engineering processes are attempted by both foreign and private sector banks, public sector banks in India face new challenges. The need to become highly customer focused has forced the slow-moving public sector banks to adopt a fast track approach. The unleashing of products and services through the net has galvanized players at all levels of the banking and financial institutions market grid to look new at their existing portfolio offering. Further, due to exposure to global trends after information explosion led by internet, customers demand better services from their banks. There is shift from mass banking products to class banking with an introduction of value added and customized products. Banks, privately owned or in the public sector have all jumped into retail band wagon. The nimble footed new generation private sector banks have taken a lead on this front and the public sector banks are trying to play catch up. In this context, an attempt is made in this paper to ascertain the extent of the customer's awareness and their level of satisfaction regarding retail banking. The study concludes that while retail banking offers phenomenal opportunities for growth, the challenges are equally daunting. How far the retail banking is able to lead growth of the banking industry in future would depend upon the capacity building of the banks to meet the challenges and make use of the opportunities profitably.