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Banking Industry and Sustainability of Business

In: Business and Management

Submitted By tamasik
Words 2329
Pages 10
Marketing Approach to Promoting Banking Services
Biswa N Bhattacharyay

In recent years, banks in India have not been able to mobilize surplus funds owing to the rapid emergence of competitive non-banking financial institutions. Non-fund based banking services have been underutilized by customers because of low awareness and this has affected banks' profitability. In this article, Bhattacharyay presents a marketing approach to promoting banking services and mobilizing deposits. Using primary data obtained from a country-wide survey of 19,000 households, Bhattacharyay has identified different segments of the customers which could be tapped by identifying their current and future needs and providing an appropriate range of services.
Biswa N Bhattacharyay is Professor at the National Institute of Bank Management, Pune.

After nationalization, banks in India have largely succeeded in mobilizing surplus funds in the Indian economy. Of late, however, the rate of growth of deposit mobilization has reduced considerably with the emergence of non-banking institutions and growth of competitive financial instruments. Banks have also failed to keep pace with the growth of surplus investible funds. If this present trend continues, banks may find it rather difficult to meet credit.obligations. At the same time, usage by customers of nonfund based miscellaneous banking services is quite low and has affected the profitability of the banking industry. There is also a sense of dissatisfaction with banking services in general. Being in the buyers' market because of the presence of other agencies, the banking industry has to adopt a marketing approach-towards deposit mobilization and promotion of banking services.

What is Marketing Approach?
Banking is a personalized service oriented industry and hence should provide services which satisfy the customer's needs. To meet these needs,

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