UNIT 2 RETAIL BANKING: ROLE WITHIN THE BANK
OPERATIONS
v
The business
models for retail banking show interesting revelations across types of banks.
The models adopted by banks vary among the public sector, private sector and
foreign banks. The main approaches are as follows:
(a)
Strategic
Business Unit (SBU) Approach,
(b)
Departmental
Approach,
(c)
Integrated
Approach (part of the overall business plan).
v
Public
Sector Banks in India generally have adopted the Departmental Approach as their
retail banking business model.
v
The business
model for retail banking is built as a part of the overall business plan and
not done as a separate departmental activity, leave alone SBU.
v
In new
generation private sector banks, the business model is very clear. They had set
up Strategic Business Units (SBU) to have clear focus and business objectives.
v
The
demarcation as a SBU is more a Management By Objectives (MBO) process wherein
the business model is dealt as a modular strategy for achieving targeted
profits with a provision to knockdown the module, if the retail plans are not
translated as per the objectives.
v
Banks
generally structure their retail banking models mainly on a positioning
platform.
v
Foreign
banks generally do not go by positioning objectives but purely on business
objectives.
