Trends of Banks towards universal
Banking
-By
Ms. Pinki Singh
Lecturer, Institute of
Management & Research, Ghaziabad
Most of us have heard the
saying ,“ A JOURNEY OF THOUSAND MILES BEGINS WITH A SINGLE
STEP” but I would like to modify the statement a little
bit, “A JOURNEY OF THOUSAND MILES BEGINS WITH A BABY STEP”
This is what the banks are right now step by step they have
moved from simple bank to universal bank.
“A universal bank is a
financial super market offering multifarious products under
one roof “- It is one stop shopping for a customer to deal
in several financial products like Insurance Product, MF,
Advisory Services, ATM etc.
This concept is not new to
the countries like Switzerland, France, Italy, Germany and
USA. During 1930’s, US banned Universal banking activities
with an idea to mitigate risky behavior of commercial banks
in forgetting the main business of deposits and lending.
Universal banking adapts,
adopts and achieves the basic objectives of business through
technology. In this process, the ultimate beneficiary is the
customer, who reaps the benefits of world class banking
products and financial services.
As all banks are marching
towards universal banking and the distinction in the
operation of co-operative banks, development banks and
NBFC’s is gradually blurring, the main objective of
Universalisation is to earn as much as profit of way of
interest, fees based income and commission through various
diversified activities.
The most popular examples
are:
(a)
ING Vyasya Bank Ltd. Is old
private sector bank in India is selling both general and
life insurance policies of their counterparts.
(b)
ICICI Bank started selling
insurance with direct strategic alliance with Lombard &
Prudential Life of UK for Non-life and Life insurance
respectively.
(c)
Birla Sunlife Insurance Co. Ltd.
with foreign partner called Sunlife Insurance of Canada is
strategic Alliance with DCB.
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