Retail Banking (Loans) Industry
A Sindhuja (12PGP001)
Rohan Kumar (12PGP036)
Karan Jenaw (12PGP020)
Rajarshi Saha (12PGP088)
Avishek Mondal (12PGP066)
Rupkamal Rabha (12PGP114)
Classification of Services:
1. Tangible/Intangible: Loan retail banking mainly provides services that are intangible, the services provided by the loan retail bank cannot be inventoried that is they cannot be stored and used in future when demand is high as in case of products, if the bank is not providing services now then this time is wasted completely. Also the services provided by the retail loan bank cannot be easily patented because they are intangibles, unlike tangible products which can be verified easily, services are never the same and therefore not easily patented. Services in the banking industry cannot be easily displayed and communicated and therefore its intangible, a bank cannot show customers that it’s providing the best service; customers have to test the service of other banks to understand the same. 2. Standardized/Heterogeneous: Loan retail banking provides services that are mainly heterogeneous, though now a day many standardized processes are being followed in this industry. This industry is heterogeneous because even though services are bit standardized and there are set procedures for them, the service delivery and customer satisfaction depends on employee and customer actions. There is no sure method to check that the services delivered matches to what was promised and planned. Service quality depends on many uncontrollable factors and thus heterogeneous. 3. Production and consumption: Retail loan banking services are produced and consumed simultaneously, that is the customer participates in and affect the transaction, a customer always involves in the loan process. The customers affect each other too in this industry by referencing and acting as op inion leaders about the service of the bank. Mass production is almost impossible in this industry and decentralization is necessary. Also the employees affect the service outcome. 4. Perishable/Non-perishable: Loan retail banking provides services which are perishable, the services as such of providing loan ones done cannot be resold or returned, it is difficult to synchronise supply and demand with services of bank. During admission time there is a sudden urge for education loans and it becomes difficult to supply with the same employee strength. 5. Membership/Non-membership: Loan retail banking is that type of service industry that requires its customers to have mandatory membership of the bank in the sense that they have to open an account with that bank and only then they can get the loan. Many services like a barber does not require customers to be a member but retail loan banking industry deals with money and so it requires faith n trust from customers which it gets it from customers through membership. 6. Continuous/Discrete: Loan retail banking services are discrete, the retail loan cannot be provided continuously and that easily. Lot of search about the customers has to be done and a standard set of processes is followed for that, all the documents have to furnish properly and in many cases the time taken for giving the loan is different. Also if one loan is given to a customer, it’s not necessary that he will qualify for other loan also.
7P’s of Retail Banking (Loans):
In retail banking of loans, the company sells services of various loans and therefore services are their product. In India, various products under loans are housing loan, car loan, educational loan, personal loan, Loan for pensioners, loan against mortgage of property, loan against shares and debentures, etc. PRICING
With a view of influencing the prospects the formulation of pricing strategy in retail banking of loans becomes significant. The pricing in loans is in the form of premium interest rates. The three main factors...
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