0When it comes to Banking, yes off course one of the India's growing industry consists of 26 public sector banks, 25 private sector banks, 43 foreign banks, 56 regional rural banks, 1,589 urban cooperative banks and 93,550 rural cooperative banks, As per the Reserve Bank of India (RBI), India’s banking sector is sufficiently capitalized and well regulated.
The financial and economic conditions in the country are far superior to any other country in the world, apart from the biggest merger of SBI with its concerns the central bank granted inprinciple approval to 11 payments banks and 10 small finance banks in FY 201516 so there is allot to come in to this industry. Standard & Poor’s estimates that credit growth in India’s banking sector would improve to 1113 per cent in FY17 from less than 10 per cent in the second half of CY16.
Whenever we talk about Banks, what strikes us is accepting deposits, lending money etc, but it is much more then what we think, a bank offers a number of services which are broadly categorized in to two segments: Corporate Banking & Retail Banking
Where the Retail Banking is one of which we are aware enough, it refers to the division of a bank that deals directly with retail customers. Also known as consumer banking or personal banking, retail banking is the visible face of banking to the general public, with bank branches located in abundance in most major cities. Services offered include savings and transactional accounts, mortgages, personal loans, debit cards, and credit cards.
The level of personalized retail banking services offered to a client depends on his or her income level and the extent of the individual’s dealings with the bank. While a client of modest means would generally be served by a teller or customer service representative, a high net worth individual who has an extensive relationship with the bank would typically have his or her banking requirements handled by an account manager or private banker.
Corporate banking, also known as business banking, refers to the aspect of banking that deals with corporate customers this segment of banks typically serves a diverse range of clients, ranging from small to midsized local businesses with a few millions in revenues to large corporate with billions in sales and offices across the country. Sometimes people get it similar to the investment banking, since corporate banking and investment banking services have been offered for many years under the same umbrella by most banks in the U.S. and elsewhere and in a general sense, corporate banking and investment banking aren't all that different.
Investment Banks raise capital for other companies through securities operations in the debt and equity markets. Investment bankers also help coordinate and execute mergers and acquisitions (M&A’s), offer advisory services to big clients and perform complex financial analysis.
Corporate finance is a catchall title for any business division that handles financial activities for a firm. This can make it a little tricky to differentiate it from investment banking because, depending on the context, investment banking might count as a type of corporate finance. An investment banking firm might have a corporate finance division.
However, there is a generally accepted distinction between corporate banking and investment banking: A corporate banker deals with day to day financial operations and handles shortand longterm business goals, while an investment banker focuses on raising capital, running private placements and conducting M&A deals. Put more simply, investment banking grows a company, and corporate banking manages a company.
Loans and other credit products Thisis typically the biggest area of business within corporate banking, and as noted earlier, one of the biggest sources of profit and risk for a bank, here the banker provides tailor made finances to the corporate, ranging from Term loans for Machineries and equipments to Cash credit limits/ Overdraft Limits for working capital requirements, the export houses can also avail Packing credit limits to finance each of their shipments at a interest rate which is as low as 7-8%p.a.
Treasury and cash management services – used by companies for managing their day to day activities (Working Capital) and currency conversion requirements.
Equipment lending – commercial banks structure customized loans and leases for a range of equipment used by companies in diverse sectors such as manufacturing, transportation and information technology.
Commercial real estates – services offered by banks in this area include real asset analysis, portfolio evaluation, debt and equity structuring.
Trade finance – involves letters of credit, bill collection, and factoring.
Employer services – services such as payroll and group retirement plans are typically offered by specialized affiliates of a bank.
