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Branch Banking

Retail banking models adopted by banks vary depending on whether they are public sector, private sector, or foreign banks. The main approaches to retail banking models are the strategic business unit approach, departmental approach, and integrated approach. Banks structure their retail banking models to be among the top three players compared to their peer group or all banks. Public sector banks aim to be among the top three retail players across all banks or among their peer group specifically. Branch banking and extension counters are the main retail banking channels, with branches serving as the central location for all banking services and extension counters functioning as mini-branches within large organizations.

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279 views2 pages

Branch Banking

Retail banking models adopted by banks vary depending on whether they are public sector, private sector, or foreign banks. The main approaches to retail banking models are the strategic business unit approach, departmental approach, and integrated approach. Banks structure their retail banking models to be among the top three players compared to their peer group or all banks. Public sector banks aim to be among the top three retail players across all banks or among their peer group specifically. Branch banking and extension counters are the main retail banking channels, with branches serving as the central location for all banking services and extension counters functioning as mini-branches within large organizations.

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beena antu
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Retail Banking: Role within the Bank Operations

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:

• Strategic Business Unit (SBU) Approach,

• Departmental Approach,

• Integrated Approach (part of the overall business plan).

Business Model

• Banks generally structure their retail banking models mainly on a positioning


platform and to be the best/top three among the peer group players or across
players. Strategies are based on the positioning objectives and vary from bank to
bank depending on the importance attached to the business model.

• Among the public sector banks, some banks aim for a place among the top three
retail players across banks including peer group banks while some other public
sector aim for a space in the top three among the peer group. But the strategy
adopted by these banks was a part of the overall strategy based on the business
mix. projections and corporate objectives of the bank.

Retail Banking channels

Channel # 1. Branch Banking:

A branch of a bank is a place, office, unit where all banking operations are
done under the single roof. People go to the branch for their banking
requirements. This is the most popular and therefore most important channel of
the Bank.

It is a place where customers can visit personally and can make use of different
kind of services and banking products in one place. In case of any difficulty the
customers are able to seek advise of the bank staff, remove their all doubts, get
their all clarifications about banking operations.
Branch in fact is a place that serves as a channel of sales and services and bank
employees can play vital role of customer satisfaction with smile. The branch is
a channel that can boost the image of the entire bank by developing personal
relations with customers and enhancing the customer relationship management
of the bank.

Extension Counters:

The Extension Counter is a part of Branch Banking. Whenever any Branch


deals with some huge Business House, A big Institution or Organization may
be Government or Private it has to perform banking transactions in Bulk. In
addition to keeping the accounts of such big houses, branch has to provide
banking services to the staff of these organizations which may run in thousands
in number. Other ancillary services are also required to be provided by the
branch.

In case such organizations are not located very near to the branch the dealing
branch opens a counter in the premises of such organization to facilitate the
easy access to banking requirements and deploys some staff on such Extension
Counters. The business conducted by these extension counters is always on
behalf of the main branch and is taken into the account of the branch itself.

In other words the counter functions like a mini branch and provides all
banking services either on the counter itself or through the main Branch.
Previously banks were required to obtain license from RBI for opening
extension counters now RBI has permitted all banks without obtaining its
permission.

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