Enhancement of Retail Banking Operation of Commercial Banks in Bangladesh FARJANA YESHMIN1 MAHMUDA NASRIN2
People are always concerned about the improvement of their standard of living. In respect of this awareness, financial institutions of Bangladesh specially banking sectors are trying to expand their service net. And in this regard banking sector is playing a tremendous role through Retail Banking (RB). Toward the community development, RB has further enlarged its’ position as a major channel of business. RB has taken the foremost funding responsibility as well as commitment to give fast forwarding service to the community through increasing branche, alternative delivery channels, premier banking services. In this study the authors have selected 28 listed banks which covered 59.57% of listed financial institutions in stock exchange. The study has revealed that during the period of 2006-2008 the sample banks have offered different types of retail products (deposits increased by 88.18%, loan products increased by 48.50%, and cards service by 21.15%) by increasing number of branches by 19.28%.The authors have segmented the article into four parts Firstly an overview of RB, secondly,review of previous studies done in this area, thirdly a comparative analysis of data and itss findings and finally conclusive remarks and policy implications.
Keywords: Retail banking, Deposit Scheme, Loan, Card service, Delivery channels. RETAIL BANKING–AN OVERVIEW
As a driving force of modern economic development, as a pioneer of financial institutions bank is extending its activities from traditional banking toward community oriented services. Now-a-days people are very much concerned about enhancement of their standard of living with their limited earnings. By considering 1
Assistant Professor, Department of Business Administration (Accounting), Stamford University Bangladesh, 51, Siddeswari Road, Dhaka-1217. Lecturer, Department of Business Administration (Accounting), Stamford University Bangladesh, 744 Satmasjid Road, Dhanmondi, Dhaka-1209
Yeshmin & Nasrin: Enhancement of Retail Banking Operation of Commercial Banks
this behaviour pattern of people, banking sector especially private one is expanding their services horizon toward community based services through Retail Banking (RB). Retail banking is the banking services that are offered to individual customers through local branches of the bank. Examples of retail banking services include checking and savings accounts, credit cards, personal lines of credit, mortgages, and so forth. Some retail banks offer basic brokerage services, though this is not always the case. Retail banking contrasts with commercial banking, which primarily offers services to businesses [http://financial-dictionary.the freedictionary.com/Retail+ Banking]. Retail banking is the cluster of products and services that banks provide to consumers and small businesses through branches, the Internet, and other channels. Consumers and small businesses are typically the core retail banking customers. The key retail banking products are consumer credit and small business loans. Consumer credit includes credit cards, mortgages, home equity lending, auto loans, education loans, and other personal loans. Although loans and deposits are the primary products, retail banking units provide a range of other financial services to consumers and small businesses. Consumers and small businesses constitute a coherent customer group largely because of commonalities in the financial products and services they use. Furthermore, consumers and small businesses are both well served through the branch network [Clark et.al.,2007]. Stability of retail-related activities is typically attributed to several factors. Firstly, retail banking is fundamentally a consumer-based business. The resilience of the consumer sector in recent years has almost certainly...