The major difference between wholesale banking and retail banking is in the type of clientele. Retail banking, also known as consumer banking, refers to the offering of banking services to individuals and lower-tier businesses. Services offered in retail banking related both on deposits as well as loans and advances.
Deposit products avail retail customers are Savings Bank account, Recurring Deposits, Current Deposits, Term Deposits, Zero balance accounts, no frill accounts (BSBDA) for common man and senior citizen account etc.Retail deposits constitute low cost core deposits of the bank. These deposits are interest insensitive as there is less bargaining for additional interest from the depositors.
Loans products: Home loan to residents as well as non-residents), home improvement loan, consumer loan, vehicle loan, education loan, working capital and loans to retail traders , working capital and loans to small business , loans to self help groups (SHGs), working capital loans to MSME sector, loan to farmers for agricultural and allied activities, credit cards, and Kisan Credit cards etc. Retail segments is a good avenue for funds deployment as it involves minimum marketing efforts in a demand driven economy.The retail loans sector presumed to be of lower risk with less NPA ratios. Housing loan sector is lowest in NPAs. It results in better yields and improve bottom line of the banks.
In addition to above basic services retail banking include ancilliary services provided to individual customers like safe deposit lockers, safe deposit vaults, internet banking services, online funds transfer facilities, credit cards, debit cards, depository services, ATM kiosks, POS service at merchant establishments, selling insurance products ( bancassurance) and gold coins.