The banking sector has come a long way. It has grown by leaps and bounds in a short span of time due to factors including:
1) Widespread usage of information technology.
2) Increased urbanization
3) Ever rising rural awareness and higher participation.
4) Strong and vibrant industry regulator
5) Enhancement of its product portfolio
6) Higher service standards.
Modern day banking
In the last two decades banking services have evolved from largely managing accounts which include deposits and loans to issue of credit and debit cards, offering demat services , ATM machines, Real Time Gross Settlements (RTGS), net banking consumer finances etc.
In fact, investment banking (a particular form of banking which finances capital requirements of enterprises) has also become a specialized and niche field in banking. Some of the core services offered include underwriting acting as an intermediary between an issuer of securities and the investing public, facilitating mergers and other corporate re-organization etc. It also provides financial advice to investors and serves them by assisting in purchasing securities managing financial assets and trading securities.
Going forward the growth will continue due to various reasons such as:
1) Increased number of products and services under the banking umbrella.
2) Scope to increase market penetration in semi-urban and rural India.
3) Higher economic growth.
The world extolled the virtues of the Indian banking sector in the wake of the global financial crisis. Its caution its regulatory rectitude, its abidance with best practices.. But what seemed to have gone unnoticed was that fact that despite towing the line, they have excelled in terms of services.
In fact, PSU banks the stalwarts of the Indian banking sector, offer services that are second to none, the world over.
There is a niggling feeling with customers that the more automated a bank gets, the poorer the customer service becomes. While tech savvy banks may offer 24 hour help lines, it all boils down to communicating with an interactive recorded voice machine or speaking to a green behind the years call center executive. Neither of these leave the consumer with the satisfaction that interacting with banking professionals can.
PSU banks with their widespread network of branches offer you the right blend of physical and virtual banking. You have the option to either step around the corner to nearby branch or just log on to their websites or call a customer executive, depending on what suits you best, irrespective of whether you are looking for a summary of your accounts status, term deposits, loan accounts or of you have queries on your transactions or If you would like to undertake fund transfers or give standing instructions or even request a simple cheque book.
In addition, to offering you traditional banking products like loans for every reason and every season and deposits with numerous variants, PSU banks have tied up with insurance companies to offer their customers insurance products as well, since as far back as the beginning of this century.
Mutual fund and equity broking
For those who thought that banking products were for the faint hearted think again. Today, banks give their customers access to equity linked products such as mutual funds, structured products and even stock broking itself. While mutual fund houses distribute their products through the bank’s network, banks themselves create structured products which comprise of various debt and equity market instruments for their high net worth customers. Several PSU banks have tied up with broking houses to offer online trading services where usually the broking firms provide the trading platform and that bank provides the savings and demat accounts.
Broking outfits, insurance companies and mutual fund houses benefit from the PSU bank’s network of customers while the banks benefits from fee based incomes and additional business form existing customers. But most importantly the customer benefits from access to a wide range of financial planning products at the friendly neighborhood PSU bank.