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Can Traditional banking meet the needs of growing market in India??

Created by : Adrija , Assistant manager finance , HDFC Bank  | 09 17 2010 10:15:37 +0000
Industry : BankingFunctional Area : India(Markets)
Keywords : indian banks banking in india banking system indian banking system growing market in india traditional banking
Activity:  635 views;  last activity : 01 03 2011 18:11:22 +0000

Around 41% Indians do not have access to bank accounts. India represents such a big opportunity to delive banking to large numbers of people.  The footprint of traditional banking is small when compared to the number of cities in India - 600,000 towns and villages, but there are less than 100,000 bank branches. So, what do you think people, can traditional banking meet the needs of growing market in India??

  
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Yes I agree with you. But I remember SBI posting a advertisement two days back, for Business Associates inviting former bank employees, retired personnel, NGOs to apply. The Business Associate will act as a Branch for that particular village providing all the services a Bank can provide. Good Idea, Right ?

If this is implemented, it is a good news to all villagers. 
By Suryanarayan Murthy, Asst Vice President (Corporate Finance), A Hydro Power Project  09 17 2010 10:54:34 +0000
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Yes, I fully support your views. Traditional banking is still prevalent due to babusahi of most of the employees working there
By shashi b prasad, Accounts & Finance Manager, I & S Communique P Ltd.  | 09 18 2010 05:58:42 +0000
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I think they can, what we need is more branches spread out all across India, and we need stronger banks which can do this for India, RBI should give more licenses so that more and more banks are coming up in India..
By Anjaneyula Reddy, Construction-Heavy, DLF  | 09 17 2010 14:12:36 +0000
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TO PENETRATE RURAL MARKET BANKS CAN GO FOR ANY AGGRESSIVE MARKET STRATEGY BUT AT THE END OF THE DAY RETURN OF LOAN IS MAIN CONCERN, HENCE TO REDUCE DEFAULT RATE BANKS SHOULD COME OUT OF THE SHELL AND SHOULD START CSR PROGRAMS AND SERVICES TO PROVIDE INFORMATION AND GUIDANCE FOR THE PURPOSE THEY ARE TAKING LOAN,IF HIS PROJECT IS SUCCESSFUL BANK NOT ONLY GET ITS LOAN BANK BUT WILL GET ALOYAL CUSTOMER ALSO
By Rahul , MBA/PGDM student, Indian Institute of Management,Raipur  | 01 03 2011 18:11:22 +0000
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I don't think traditional banking can solve the problem . Basically in rural areas its loan first and savings then . Thats the reason they fall a prey to the money lenders to whom they pledge the produce of the land and dont get the market or regulated price . The only solution is co-operatives at village level , district level and then at town level . Micro finance is a hit at Bangladesh where the miserties have been mitigated . In Tamilnadu in many districts there have been women welfare group who have funded small projects , encouraged production and helped market the same . Yes it all starts from lending first . Only micro finance and village level co-ordination and awareness can bring change . Traditional bankers are not bred on that line since they follow set policies .
By S. Jayaraman, Freelancer, FMCG/Foods/Beverage  | 09 18 2010 15:19:47 +0000
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Yes. Good initiatives from SBI to start and energize and build confidence to other Banks. 
By M.K. Madhavan, Company Secretary, Kanishk Steel Industries Limited  | 09 17 2010 11:58:50 +0000
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"The banking system at present is so healthy and sound in delivering good performance but failed to bank to Rural. It was observed that only 30% of the bank branches operate in the rural areas that house 72.2% of the country’s population. Further, rural India accounts for just 9% of total deposits, 7% of total credit, 10% of life insurance and 0.6% of nonlife business. As our Finance minister pointed out in Financial Inclusion Summit (19/07/2010)- "Although the banking network has rapidly expanded over the years, the key challenge is to extend the banking coverage to include the large population living in 6 lakh villages in the country". Hence the Banking System should come out of the traditional approach and banks to adopt strong and urgent measures to reach the unbanked segment of society and unlock their savings and investment potential." Therefore- Banks shall come out with new format to make good platform between people and Market that enable us to inclusive Growth and sustainable development of the Country,"
By M.K. Madhavan, Company Secretary, Kanishk Steel Industries Limited  | 09 17 2010 11:30:07 +0000
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I really don't think so, India represents such a big opportunity and I don't think Traditional banking can meet the needs of growing market in India, and provide banking solutions to large number of people, still many people in India are not under a financial umbrella. I think Mobile banking should enter India right now, the time is right, in 2007 there was only 100 million mobile phone connections, but now its more than 600 million connections, Infact Nokia as a mobile handset maker which has a footprint three times larger than all the bank branches put together.  If a mobile payment system is incorporated then many people will come  under a banking system, and I don't see traditional banking meeting the needs of growing market in India.....
By Adrija , Assistant manager finance , HDFC Bank  | 09 17 2010 10:15:37 +0000
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