Retail Banking
December 2022 Examination
1. Securitization is the new buzzword in retail banking as it converts loans/assets into receivables. Banks need not wait for repayment of loans as sufficient funds are created to plough back as capital in the bank. Explain how securitization works and is treated as a credit risk mitigation tool. (10 Marks)
ANS 1.
INTRODUCTION:
Banks employ a selection of techniques to reduce the credit risks to which they are revealed. Exposures may be fully or partially secured with exceptional cases, money, or safeties; a potential debt direct exposure backed by a 3rd event, or a bank might purchase a credit by-product to neutralize various kinds of credit risk. Banks may also approve web car loans in exchange for deposits made by the same counterparty. The risk linked to specific properties’ failure is decreased using securitization as a risk management approach. Banks and other financial institutions use securitization
2. Retail banking in India, especially in the context of the growing economy and millennial young population is getting stronger day by day. Discuss retail banking as a simplification & diversification tool. (10 Marks)
ANS 2.
INTRODUCTION:
Customer and personal banking are standard terms for retail banking, which caters to private consumers instead of enterprises. Private clients can safely handle their funds, obtain credit, and make deposits, thanks to retail banking. Retail banks provide credit cards, certificates of deposit, home mortgages, personal car loans, and monitoring and savings accounts, to name a few financial services. It requires a person to have the ability to access their savings account, inspect their equilibrium, and manage their financial resources, and down payment cash safely and securely. This sort of banking has a great deal to use for trainees and customers who intend to move or research abroad. Several financial services companies try to provide their customers with a one-stop buy retail banking. Consumers anticipate retail banks to provide them with various core services, such as
3. Branchless banking is one step toward the Financial Inclusion Policy of the Government of India.
a. What is the vision of the Government in this regard? (5 Marks)
ANS 3A.
INTRODUCTION:
Financial inclusion is using financial and financial services for every cultural member with no discrimination. It aims to entail everybody in society by supplying every person access to essential financial services, regardless of their revenue or cost savings. In this context, branchless financial consists of various services such as quick money transfers, account questions, gravy train deposits and withdrawals, and loan administration.
THE VISION OF THE GOVERNMENT OF INDIA:
In India, many low-income homes do not have
b. Enumerate different technologies used in the banking sector to achieve the goal of bringing more people under the banking ambit. (5 Marks)
ANS 3B.
INTRODUCTION:
In the country’s banking discussion, technology and financial incorporation are the two most typical speaking factors. Financial incorporation drags technology development, and mobile banking is advancing quickly. Firms have an advantage over their competitors thanks to innovative technical options and a quick capability for adjustment. They are producing and using new technologies in a computed and aggressive initiative to interfere instead of being interfered with.
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