Difference
between Retail Banking and Corporate Banking
Dear Apirants,
Welcome
to Mentor for Bank Exams. Here we are presenting you an important topic regarding Difference
Between Retail Banking and Corporate Banking. In simple and easy language
banking is an institution which deals with the activity of accepting deposits
from the clients and lending this money to the borrowers. To accept deposit and
lend it to the borrowers is a traditional activity along with this now a days
banks are doing different types of banking activity.
But, all in all the banking
is mainly divided two types i.e.
1. Retail Banking
2. Corporate Banking
Retail
Banking
- Retail banking is a part of bank
that directly deal with consumers or individuals, located in the nearby
city
- Retail banking is an activity
done by bank with the customers face to face.
- Retail banking is clear or
visible face to the consumer.
- Retail banking is also named as
Consumer banking or Personal banking.
- It includes the services like
savings account, current accounts, different types of loan, mortgages,
debit and credit card, retirement planning, certificate of deposit etc.
- For retail banking, customer
deposit is the most important source of fund.
- Retail bank makes profit from
the interest margin of the lender and borrower transaction.
Corporate
Banking
- Corporate banking only provide
services to the large business corporations and business groups.
- Corporate banking first used in
United States of America to differ it from the investment banking.
- Corporate banking is also known
as Business banking.
- In short corporate banking is a
one type of segment that caters service to the range of clients from big
corporate firm to mid-scale company.
- Corporate banking earn profit
from interest and fees they charge for services.
- Corporate banking provide
services like saving account, current account, loan facility like secured
and unsecured and credit facility to corporates.
- It also offer some more services
like Trade finance, Foreign exchange, Custody, and Derivatives.
- In short it offers a services
that are tailor-made to corporate firms.
Difference
between Retail Banking and Corporate Banking
Conclusion
Both types of banking
play an important role for the smooth functioning in an economy. Both offers
services related to the segment oriented. They design service keep in mind the
need of the clients.
