Beyond Traditional Banking (BTB)?

Prof Chowdari Prasad, TAPMI, Manipal Recently, a new prefix to Banking interested me to think on all possible facets of banking in India and world over. This was Tissue Banking, a medical concept, of course. But, in the world of Commercial Banking, there have been several newer terms coming in from time to time. While most of these prefixes have technical meaning and have attained the world-wide acceptance in the banking and finance industry some popular terms have also been floating round like Any where banking, Any time banking and also Any How Banking! When we want to find out the various types of banks that are operating in India, the picture is always exhaustive and very big. Beginning with RBI, which was itself formed as a private entity in 1934, inheriting its functions and role from the Imperial Bank of India, and was nationalized in 1948, we have a host of banks viz., State Bank Group (State Bank of India and its five subsidiaries), 19 Public Sector Banks or Nationalised Banks (with two rounds of nationalization in 1969 and 1980), Old and New Generation Private Banks, Foreign Banks, Regional Rural Banks, Local Area Banks and Cooperative Banks operating country-wide for over a century. In the Indian Financial System, we have three more types of players to complete the picture. These are Development Financial Institutions (like IFCI, SIDBI, EXIM Bank, NABARD, etc), Non-Banking Financial Companies (including Lease / Hire Purchase companies, Chit Funds, Nidhis, Merchant Bankers, Insurance Companies, Mutual Funds, etc), and National Small Savings through Post Offices offering a wide range of products and services. Business World (Weekly) issue of October 17, 2011 had, under the heading In Depth Banking, published an interesting article with a caption Palm-Top Banking dealing with Micro-ATMs to increase the rural coverage. It aroused my curiosity to literally go in depth to find out more details about the new facility. Having spent about three decades in hands-on banking at branches and administrative units of three leading banks and teaching the subject for over a decade in two prominent B-Schools, I have been closely watching enormous changes during the reforms era with the advent of technology, my interest has gone up for more details. In fact, being a rural banker myself in remote backward areas in Andhra Pradesh as a Branch Manager of Agricultural Development Branches of SBI during eighties, I have also been researching on the current buzz words like Financial Inclusion, Self Help
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Groups, Micro Financing and Business Correspondents and Facilitators sometimes feeling jealous of the current generation banking fraternity for having modern facilities. ATMs have almost equaled the number of bank branches affording 24x7 services to the best satisfaction of customers of all types in all centers metro, urban or rural areas. Outsourcing is being permitted to be used by the banks in all sectors for business development and ensuring customer satisfaction.

(Source: Business World)

In recent times, electronic banking and innovative products and services in banking industry seem to have bridged the gap between the haves and
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have-nots as also the rural and urban clientele. It was in 1969 when the first nationalization of fourteen private sector banks was carried out and introduction of Lead Bank Scheme and Priority Sector lending norms were defined to take the banking services to the grass roots level with a condition that the per branch population served be brought down from the 65,000 to a challenging level of 15,000, the whole banking industry was put to the acid test of branch expansion, recruitment and training of staff, rendering of satisfactory customer service with productivity and profitability began. After experiencing several troubles and tribulations during the seventies and eighties, the industry was blamed to be inefficient and was exposed to the reforms with introduction of concepts like Prudential Norms, Capital Adequacy Ratio, Non-Performing Asset Management, de-regulation of interest rates, Asset Liability Management, Risk Management, Benchmark Prime Lending Rate, and so on. While technology has been playing a very dominant role in changing the face of banking industry in India, a whole gamut of new terminology in banking surfaced which are listed out in the table below. These comprise of both traditional and non-traditional banking concepts, co-existing in the twenty-first century. Table no.1. Many facets of Banking Today
01.Agricultu ral 06. Business 11. Corporate 16.Eco Friendly 21. Innovative 26. Inclusive 31. Online 36. Pigmy 02.Anywher e 07. Cooperative 12. Central 17.Ethical 22. Internationa l 03.Any Time 08. Commercial 13.Developm ental 18.Faceless 23. Internet 04. Barefoot 09.Conveni ence 14.Door Step 19. Girigiri 24.Investm ent 29. Mobile 34. less 05. Branch 10. Core 15. Banking 20. Green 25. Islamic e-

27. Lazy 28. Lombard Banking 32. Overseas 37. Priority 33. Palm Top 38. Private

30. Narrow

Paper 35. Personal 40. Relationship 3

39.Retail

41. SMS 46. Universal 51. Wholesale

42. Shadow 47. Unit 52. Womens World Banking

43. Sustainable 48. Video

44.Tele 49. Virtual

45.Transacti on 50. Village

The above terminology has been captured from Business Magazines, News Paper articles, and search engines like google.com, Wikipedia.com, etc. Concepts like Unit / Branch Banking, Central / Commercial / Corporate/ Cooperative / Developmental / International / Innovative / Investment / Lombard / Overseas / Personal / Pigmy / Priority Banking, etc form part of the traditional banking. Others like Anywhere / Any Time / Barefoot, Business, Convenience, Core, Door Step, e-Banking, Internet, Islamic / Inclusive / Lazy / Mobile / Narrow / Online / Palm Top / Paper less / Private / Retail / Relationship / SMS / Tele / Universal / Video / Virtual / Village / Womens World Banking etc have emerged in the post reforms era. And the remaining phrases like Eco-Friendly, Ethical, Faceless, Girigiri, Green, Shadow, Sustainable, Transaction have all emerged in recent times with entirely new dimensions and call for detailed study by all those who are deeply in to the field of banking in modern times.