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STRATEGY TO ENTER INDIAN BANKING SECTOR

STRATEGY TO ENTER INDIAN BANKING SECTOR Strategy submission by - Meghna Dubey Chandan Das Team name:

Strategy submission by - Meghna Dubey Chandan Das Team name: Finomaniac

STRATEGY TO ENTER INDIAN BANKING SECTOR Strategy submission by - Meghna Dubey Chandan Das Team name:

Market Analysis Of Credit Market Of India

The credit market for Indian Banking Industry was

of ₹ 86749 billion for FY2019.

Credit to industry rose by 6.4 per cent in May 2019 as compared with an increase of 1.4 per cent in May 2018.

Personal loans growth decelerated from18.6 per cent in May 2018 to 16.9 per cent in May 2019.

Credit to priority sector lending saw an uptrend

from 6.2 per cent in May 2018 to 9.9 per cent in

May 2019.

Credit to agriculture & allied activities increased by 7.8 per cent in May 2019 as compared with an increase of 6.4 per cent in May 2018.

Based on data most promising Industries for

credit lending is pharmaceuticals, automobile,

infrastructure, industries. `

According to CRISIL Report Bank credit growth to accelerate to ~13-14% over next 2Ys

Sector wise deployment of Gross Bank Credit And their y-o-y

35000 change 30000 25000 20000 15000 10000 5000 0 Food Credit Agriculture & Services Personal
35000
change
30000
25000
20000
15000
10000
5000
0
Food Credit
Agriculture &
Services
Personal Loans
Priority Sector
Allied Activities
Industry (Micro &
Small, Medium and
Large )
Mar.29, 2019
May.25, 2018 / May.26, 2017
May.24, 2019 / May.25, 2018
Industry wise y-o-y growth of gross credit

30.0

20.0

10.0

0.0

-10.0

-20.0

12000 10000 8000 6000 4000 2000 0 Mar.29, 2019 May.25, 2018 / May.26, 2017 %
12000
10000
8000
6000
4000
2000
0
Mar.29, 2019
May.25, 2018 / May.26, 2017 %
May.24, 2019 / May.25, 2018 %

Data Source: Data Releases on Sectoral deployment of bank credit, RBI

25.0

20.0

15.0

10.0

5.0

0.0

-5.0

-10.0

-15.0

-20.0

Sectoral Deployment Of Bank Credit

Distribution of Gross bank credit in service sector

5%

1% 1% 6% 23% 0% 8% 7% 9% 0% 0% 15% 1% 25% 10% 16%
1%
1%
6%
23%
0%
8%
7%
9%
0%
0%
15%
1%
25%
10%
16%
24%
8%

22%

18%

Distribution of gross bank credit of Priority sector

1%

0% 4% 4% 3% 0%
0%
4%
4%
3%
0%

28%

9%

Distribution of Gross bank credit in Personal loans

Transport Operators28% 9% Distribution of Gross bank credit in Personal loans Computer Software Tourism, Hotels & Restaurants

Computer Softwareof Gross bank credit in Personal loans Transport Operators Tourism, Hotels & Restaurants Shipping Professional

Tourism, Hotels & Restaurantsin Personal loans Transport Operators Computer Software Shipping Professional Services Trade Wholesale Trade (other

ShippingComputer Software Tourism, Hotels & Restaurants Professional Services Trade Wholesale Trade (other than food

Professional ServicesComputer Software Tourism, Hotels & Restaurants Shipping Trade Wholesale Trade (other than food procurement) Retail

TradeHotels & Restaurants Shipping Professional Services Wholesale Trade (other than food procurement) Retail Trade

Wholesale Trade (other than food procurement)& Restaurants Shipping Professional Services Trade Retail Trade Commercial Real Estate Non-Banking Financial

Retail TradeServices Trade Wholesale Trade (other than food procurement) Commercial Real Estate Non-Banking Financial Companies

Commercial Real EstateWholesale Trade (other than food procurement) Retail Trade Non-Banking Financial Companies (NBFCs) Consumer Durables

Non-Banking Financial Companies (NBFCs)than food procurement) Retail Trade Commercial Real Estate Consumer Durables Housing (Including Priority Sector

Consumer DurablesReal Estate Non-Banking Financial Companies (NBFCs) Housing (Including Priority Sector Housing) Advances against

Housing (Including Priority Sector Housing)Non-Banking Financial Companies (NBFCs) Consumer Durables Advances against Fixed Deposits (Including FCNR (B), NRNR

Advances against Fixed Deposits (Including FCNR (B), NRNR Deposits etc.)Durables Housing (Including Priority Sector Housing) Advances to Individuals against share, bonds, etc. Credit

Advances to Individuals against share, bonds, etc.Fixed Deposits (Including FCNR (B), NRNR Deposits etc.) Credit Card Outstanding Education Vehicle Loans Other

Credit Card Outstandingetc.) Advances to Individuals against share, bonds, etc. Education Vehicle Loans Other Personal Loans 52% Other

Educationagainst share, bonds, etc. Credit Card Outstanding Vehicle Loans Other Personal Loans 52% Other Services •

against share, bonds, etc. Credit Card Outstanding Education Vehicle Loans Other Personal Loans 52% Other Services

Vehicle Loans

Other Personal Loansbonds, etc. Credit Card Outstanding Education Vehicle Loans 52% Other Services • In priority sector lending,

52%

Outstanding Education Vehicle Loans Other Personal Loans 52% Other Services • In priority sector lending, majority

Other Services

In priority sector lending, majority share is hold by agriculture & allied activities, followed by micro small enterprises, services and housing.

In personal loans majority stake is of housing.

In service sector lending, the top borrowers are NBFCs and Traders.

sector lending, the top borrowers are NBFCs and Traders. Agriculture & Allied Activities Micro & Small

Agriculture & Allied Activitiessector lending, the top borrowers are NBFCs and Traders. Micro & Small Enterprises Manufacturing Services Housing

Micro & Small Enterprisesare NBFCs and Traders. Agriculture & Allied Activities Manufacturing Services Housing Micro-Credit Education Loans

Manufacturing& Allied Activities Micro & Small Enterprises Services Housing Micro-Credit Education Loans

ServicesActivities Micro & Small Enterprises Manufacturing Housing Micro-Credit Education Loans State-Sponsored Orgs.

HousingMicro & Small Enterprises Manufacturing Services Micro-Credit Education Loans State-Sponsored Orgs. for SC/ST

Micro-CreditMicro & Small Enterprises Manufacturing Services Housing Education Loans State-Sponsored Orgs. for SC/ST Weaker

Education LoansEnterprises Manufacturing Services Housing Micro-Credit State-Sponsored Orgs. for SC/ST Weaker Sections Export Credit

State-Sponsored Orgs. for SC/STMicro & Small Enterprises Manufacturing Services Housing Micro-Credit Education Loans Weaker Sections Export Credit

Weaker SectionsEnterprises Manufacturing Services Housing Micro-Credit Education Loans State-Sponsored Orgs. for SC/ST Export Credit

Export Credit

• Steady growth in housing & non housing fields. • Zero processing charges & interest
• Steady growth in housing & non
housing fields.
• Zero processing charges & interest
rate for home loan as low as 6.5%
depending upon customer profile.
• Attractive Interest rates for personal
loans for self-employed individuals &
entrepreneurs.
• Minimal paper work & quick loan
disbursal.
• Flexi EMI options that cater customer
requirements, budget and timeline.
• Attractive offers on the regular
interval.
Retail

Product Diversification

• Strong demand from NBFCs/ HFCs • Flexibility of choosing fixed or floating interest rates,
• Strong demand from NBFCs/ HFCs
• Flexibility of choosing fixed or
floating interest rates, or combine
both.
• Available in USD and other
currencies, so that the loan matches
to overseas income, reducing the
need for foreign exchange risk
management.
• LIBOR denominated rates for Trade
Finance lines.
Services
• Growth due to increase in working capital requirement. • Varying interest rate depending upon
• Growth due to increase in working
capital requirement.
• Varying interest rate depending upon
the size & nature of the industry.
• Flexibility of choosing from fixed or
floating interest rates, or combine
both.
• Attractive “Green Loan” for the
environment friendly industry model.
1% less interest rate than standard
rate.
Industry
“Green Loan” for the environment friendly industry model. 1% less interest rate than standard rate. Industry

Product Leadership

The retail focused banks have outperformed in recent past.

As Diwali is approaching, one of the most auspicious festival of Indians. Tie up with automobile companies and e-commerce platforms for providing loans and EMI payment option at competitive prices for promotion of the bank.

For a year, keep processing fee for loans as 0% in case of home loans, personal loans, agriculture and allied. As the bank has strong parent company and deep pockets, therefore can take up such expense.

100% paper free, Online processing filing and processing of loans.

• Customer’s having account with the bank will receive extra benefit of reduced interest rate like benefits received by employees of the bank.

• Market’s lowest interest charges and highest rate on savings/current account.

Easy online switching of account and passing of balance loan to the east coast bank.

Market competitive prices

Online Processing 100% paperless

0% processing charges

of balance loan to the east coast bank. Market competitive prices Online Processing 100% paperless 0%

Roadmap for the bank

Apply with RBI Central Office for approval.

for the bank Apply with RBI Central Office for approval. Adhere to RBI guidelines as mandated.

Adhere to RBI guidelines as mandated. Location selection

based on possibility

of revenue

generation. Including 25% Tier 5 and Tier 6 locations.

generation. Including 25% Tier 5 and Tier 6 locations. Do a lot of promotions before entering

Do a lot of

promotions before entering the market through all media channels.

promotions before entering the market through all media channels. Proper advertising for highlighting product benefits.

Proper advertising for highlighting product benefits.

promotions before entering the market through all media channels. Proper advertising for highlighting product benefits.

Thank you

Presentation will be refined further on basis of ongoing research.

Thank you Presentation will be refined further on basis of ongoing research.