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BANKING

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DEFINITION:
The business activity of accepting and

safeguarding money owned by other


individuals and entities, and then lending
out this money in order to earn a profit.

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CHARACTERICTICS OF BANKING SERVICES

 They are intangible.

 Services are inseparable from the service provider.

 Overdraft and loan facilities are provided to individual

customers.
 High involvement of decision.

 Customers loyalty to the bank.

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FUNCTIONS OF THE BANK

Accepting deposits from public

Providing loan to public

Remittances

Acting as trustee

Keeping valuables in safe custody

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TYPES OF BANKING SERVICES:
Retail banking

Corporate banking

Investment banking

Private banking

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RETAIL BANKING

Retail banking provides general banking

services to the mass public such as savings,


loans, payments, mortgages and credit
cards.

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CORPORATE BANKING
Corporate banking involves the development of

business products for corporate customers and


manages relationship with them.
Positions may include Lending Officer who controls

credit; Relationship Manager who establishes and


maintains good working relationship with the
corporate customers.
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INVESTEMENT BANKING
Investment banking helps their corporate clients to

raise capital through the issuance of stocks and bonds,


underwrites securities and arranges mergers, disposals,
acquisitions, reconstructions and floatations.
Sound knowledge in finance and strong analytical

skills are required since it is one of the most


demanding and lucrative aspects of financial services.

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PRIVATE BANKING
Private Banking serves the bank’s high net worth

personal customers to retain, build up and manage


their assets. Working experience is usually required for
positions such as Relationship Manager.

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BANKING IN INDIA
Banking in India started from vedic period.

During Mogul period,indegenous bankers played a very


important role in lending money and financing trade.
The first banks were The General Bank of India, which started in

1786, and Bank of Hindustan, which started in 1790.The oldest


bank in existence in India is the State Bank of India, which
originated in the Bank of Calcutta in June 1806, which almost
immediately became the Bank of Bengal.

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BANKING IN INDIA…
This was one of the three presidency banks, the other two

being the Bank of Bombay and the Bank of Madras, all


three of which were established under charters from the
British East India Company. For many years the
Presidency banks acted as quasi-central banks.The three
banks merged in 1921 to form the Imperial Bank of
India, which, upon India's independence, became the State
Bank of India.

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BANKING IN INDIA…
The Reserve bank of India was created in 1935 by

passing the Reserve Bank India Act 1934.


In the Swadeshi Movement many Banks like Punjab

National Bank Ltd, Indian Bank Ltd, Bank of Baroda


Ltd ,Canara Bank Ltd, etc were formed.

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ISSUES IN BANKING:
The issue of consolidation

The second issue is that of management of costs.

Another related challenge is in reducing the cost of

funds of the banking sector.


The fourth issue is the management of sticky assets.

The fifth issue concerns the management of risks.

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MARKETING MIX OF BANKING SERVICES

PRODUCT : it is the various features and the


accompanying services provided by the bank.
CORE PRODUCT : It’s the fundamental benefit the

customer buys from the bank.They define what kind if


business the banks e.g., Accepting deposits and
lending money.The customer does not buy the product,
they only buy the “BENEFIT”.

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MARKETING MIX OF BANKING SERVICES…

AUGMENTED PRODUCTS : This is the basic


product with ancillary attached to it.
The bank must offer multidimensional product to

satisfy customers needs.


For example Tele banking, Online Banking etc.

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PRICE
Pricing relates to the interest rates paid by the

banker on deposits, interest charged by the


banker on loans,charges for various types of
transactions and fees for certain services like
demand drafts.
Pricing can also be used as a tool for
marketing strategy.
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PROMOTION
All promotion tools –advertisements,publicity,sales

promotion, personal selling are essential in bank marketing


mix.
Advertisements is done though televisions, radio,

newspapers magazines and hoardings

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PROMOTION…
Publicity is a major strength as the customers tend to

believe a news item rather than an advertisements.


Word of mouth promotion is also another promotion
tool for banks.
Banks also use sales promotion devices such as

brochures and advertisements specialties like


pens,calenders ,diaries etc.

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PLACE
Place deals with making the banking services available

and accessible to the customers.


The decision of place mainly deals with the selection

of a suitable location for the branch.


The location should have adequate transportation,

communication, electricity and other necessary


facilities for the smooth functioning of the branch.

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PEOPLE
 Banking products cannot be separated from the people who market

them.
 The products and the seller constitute the banking product.

 In designing these products the sane degree of care and attention needs

to be paid to both the product and the seller.


 Banking services can be implemented only through people.

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PROCESS
It involves all activities right from product conception

stage to product designing and development down to its


marketing at the branch level.
It also includes the accounting procedures for the

transaction.
Banks have shifted from activity oriented services to

customer oriented services due to technological changes.

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PHYSICAL EVIDENCE
Banking products are intangible and physical evidence

focuses the banker’s attention on this aspect. Attractive


logos, brand names, symbols etc ,add to the customer’s
perception of service quality.
Imaginative design of bank brochures, flashy cheques

books with the name of account holder printed on the


leaves, statements of accounts with details of transaction
are physical evidence.

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