3banking and allied activities under one roof.
Such allied activities may include creditcards, asset management,
housing finance and insurance, all of which are runconcurrently with core banking operations. A universal bank is
a supermarket forfinancial products. Under one roof, corporate can get loans and avail of other handyservices,
while individuals can bank and borrow.For increasing customer base and retention of the existing cliental universal
bankingapproach is effective strategy. Universal banking offers number of benefits to customersas well as the
banks. For instance, economies of scale arise in multi-product firmsbecause costs of offering various activities by
different units are greater than the costswhen they are offered together. The wide range of financial products and
services offeredholds a greater appeal for the customer than specialized banks due to the comprehensiveservice
provided by a universal bank. This is one of the major factors which is useful forany bank to face competition
successfully and increase their market share. Modernbanking is heavily depending upon retail banking. To attract
retail customer this approachis ideal. Empirical study clearly shows that all most all banks are taking retail
customersseriously and focusing their marketing strategy towards them. Universal banking withfocus on retail
customers made the ICICI banks to acquire first position in Indian bankingsector. Other banks of India are also
adopting ICICI model for growth.Universal banking approach is beneficial to bank also.
For banks economies of scalerelate to cost-savings through sharing of overheads and improving technology by
jointlyproviding generically similar groups of services. Since universal banking basicallyprovides financial
services, the inputs like manpower, infrastructure is more or less same.Necessary changes in the inputs can be
made easily. For instance training can be given tostaff for providing different financial services to customers.
Moreover the most importantbenefit for the bank is that it is useful to increase the fee based income of the
bank.Financial sector passing from lower interest rate regime at present and added to this theprocess of
disintermediation is affecting the main and the traditional source of income forthe banks i.e. interest income. All
banks are striving hard to increase their fee basedincome to improve their bottom line. Universal banking can help
the banks herepositively.
4
Marketing approach for rural areas
Prior to nationalization of banks in 1969, the rural areas were virtually without bankingfacility. At that time
unorganized sector was dominating in the rural finance. Afternationalization of banks in 1969 branches of the
banks were started gradually in the ruralareas also. To day more than 50 percent branches of the banks are found in
the ruralareas. However, the distribution of banks in the rural areas is highly uneven. In differentstate the extent of
rural banking is different. Though some of the states have goodperformance in the rural banking but in spite of that
unorganized sector is still dominatingin the rural banking. It means here the nature of competition is different. Here
banks haveto face competition with the unorganized sector. Moreover the rural banking is highlyregularized
activity by the Government in India. Lending as well as interest rate isregularized. Thus under such
environment different marketing approach is required. Foreffective rural marketing product development,
promotion and communication isimportant. All these parameters banks have to balance with socio-economic
factorsprevailing in the rural areas. Here bank need to innovate product that could attract thedepositors. Various
loan schemes that are suitable for them for getting funds at right timeand also they find convenient to repay. For
instance traditional saving bank account maybe given a fixed deposit concept that once a particular limit of balance
is reached thefunds from saving account is automatically converted into fixed deposit attracting higherinterest rate.
Same way giving more liquidity status to fixed deposit account. In some of the states of India there is considerable
amount of NRI deposits. Banks need to developsome scheme which would attract them to bank with. For loans
and advances productswhich are suitable to farmers, small traders, small scale agro based rural industries
arealready in existence. Banks need to see that how value addition can be made to theseexisting schemes. Banks
also needs to tie up with Non Government Organisations andvarious Self Help Groups for different types of loans,
micro financing etc. This will helpthe bank for building good image and reputation in the rural areas over and
above thebusiness. Another potential area which can be explored by the banks in the rural area isretail banking.
With the steady increase in the income of the rural people there is amplescope for retail loan products like housing
loans and loans for consumer durables.
5Marketing through customer services in rural areas is different from that of urban areas.Here personalized
banking is the success
mantra
for banks. Because of high level of illiteracy people prefer to undertake banking transaction themselves. They
hesitate todepend upon technology based service. For effective marketing in rural areas bank shouldhave staff with
right soft skill like concern for customers problem, positive attitude,good communication and negotiation skill. At
every level of dealing with the customerbank need to educate them for banking activities and processes. To attract
the customersfrom the unorganized sector most important factor is to provide the borrower the requiredfinance of
right amount and at right time.
Conclusion
Banking sector has undergone various changes after the new economic policy based onprivatization, globalization
and liberalization adopted by Government of India.Introduction of asset classification and prudential accounting
norms, deregulation of interest rate and opening up of the financial sector made Indian banking sectorcompetitive.
Encouragement to foreign banks and private sector banks increasedcompetition for all operators in banking sector.
Banks in India prior to adoption of neweconomic policy was protected by Government and was having assured
market due toalmost state monopoly in banking sector. However, under the new environment, Indianbanks needs
to reinvent the marketing strategy for growth. In India geographicaldevelopment is not even throughout the
country, there are full fledged urban areascovering the metropolitan cities and other big cities. On the other hand
there areunderdeveloped rural areas too. For effective bank marketing different approach fordifferent areas is
required. In urban areas customer service is of paramount importance asthe level of literacy and therefore
awareness of the people is more. Also technology basedmarketing would have higher degree of success due to
typical urban life style of thepeople. Universal banking providing all financial services under one roof will have
moresuccess in urban areas. In the rural areas for bank marketing personalized banking will goin long way. Also
banks need to offer innovative tailor made deposits and advancesproducts to suit individual customers. Delivery of
advances of right amount and at righttime is essential in rural marketing
