Wholesale Banking In India
Wholesale banking means the banking services given by banks to big customers. In simple words providing services to large corporates, real estate developers, mortgage brokers, International trading entity's.
The main focus of wholesale banking is large value transactions.
Wholesale Banking in India
presents a strong case for the expansion of wholesale banking because of continued globalisation of Indian companies, India being seen as a favourable investment destination, increase in infrastructure spending, stable government, robust markets, stable currency, low deficits, etc. Wholesale banking thus comprises a serious share of the banking revenues thanks to the above factors and also thanks to an increased inclination of the state towards mid-segment companies which have increasing banking requirements. In wholesale banking too, it's the company banking which comprises a lion’s share that is about 85%. Likewise, with the rebound of the economy and a positive outlook, the likelihood of growth in investment banking, M&A etc. is very likely.
The major advantage in wholesale banking is that a client can have easy and one-place access to all or any its finances and their details. This makes internal stock transfers, fund transfers, allocations and distributions simpler. It, however, it increases the danger it poses to the clients as all their funds are parked in one institution and therefore the businesses depend upon the financial health of the bank for a smooth run. In cases of economic downturns, if the banks crash, all the dependent businesses come to a standstill instantly. Thus, businesses usually diversify into several financial institutions to stay afloat during any crisis. the main Indian Banks which are involved in wholesale banking are-State Bank of India, Industrial Development Bank of India, Canara Bank, Bank of India, Bank of Baroda, financial institution of India etc.
Wholesale Banking Services
Specialised Finance
Loan Syndications
Structured Transactions
Securitisation
Credit Structuring
Public Sector Infrastructure financing
Advantages of Wholesale Banking
There is additional safety for depositors.
Lending to Government to hold out future projects with heavy investments.
Better Cash management
Massive capital requirement of huge businesses is often fulfilled.
Customers of wholesale banking have the advantage of getting lower transaction fees.
It will help companies have transactions on an outsized scale.
Disadvantages of Wholesale Banking
Interest Rates are very high.
Processing Fees also are very high.
Have to buy services albeit they're not availed.
It is expensive to take care of accounts and records.
Risk of huge scale loss if the bank closes down.