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Difference Between Retail Banking and Corporate Banking
Different types of banking options are available to us. Depending on the individual or company, banking services vary. The retail banking model is geared for the general public, with bank branches located across a city that deals with retail consumers on a daily basis. Corporate banking, on the other hand, assists firms in raising capital, giving credit, and providing guidance. It provides corporate houses with customized credit that is tailored to their individual demands. A bank can engage in a variety of activities, such as retail banking, corporate banking, merchant banking, investment banking, wealth management, credit management, and so on.
What is Retail Banking?
Retail banking is a type of financial service that is available to the general public. Consumer banking, also known as personal banking, allows customers to manage their money by providing them with basic banking services, credit, and financial counselling. Banking transforms the bank into a kiosk where customers may select and purchase the product or service they require to achieve their particular objectives. The basic banking and financial goods and services supplied by banks to customers are referred to as retail banking.
What is Corporate Banking?
It's aimed towards the business community. It's the business world on a smaller scale. It offers a wide range of services, including credit, treasury, fixed asset requirement finance, commercial services, and employer services, among others. It's a type of commercial bank that's more specialised. Corporate banking, also known as business banking, caters to a wide range of clients, from small to mid-sized local firms with a few million dollars in revenue to enormous conglomerates with billions in sales and offices all over the country.
Difference and Comparison
Difference and Comparison
| Comparison | RETAIL BANKING | CORPORATE BANKING |
| Definition | Retail Banking is a banking service provided to the general public or individual. | Corporate banking is a commercial banking facility which only deals with small or large companies and corporate bodies. |
| Products | Customers are the focus of retail banking products. | Corporate banking services are focused on the needs of businesses. |
| Clientele | The clientele of retail banking is extensive. | The customer of corporate banking is rather limited. |
| Processing cost | Low | Comparatively High |
| Transactions | Lower value of transactions | High value of transactions |
| Charges | Handling fees in retail banking are minimal. | Handling fees in business banking are greater than in retail banking |
| Loan size | Up to 5 crores | More than 5 crores |
Major Differences Between Retail and Corporate Banking
Retail Banking is a banking service provided to the general public or individual to regulate their funds in their saving account or fixed account and to perform various other day-to-day banking transactions like depositing money and opening bank account.
Corporate banking is a type of commercial banking that focuses on small and large businesses and corporations, offering services such as trade finance, derivatives, and other financial products.
Personal loans, vehicle loans, home loans, and other customer-oriented retail banking products are available.
Corporate banking is focused on the needs of businesses and can be adapted or adapted to meet specific needs, such as loan facilities.
When it comes to customer base, retail banking often attracts a huge number of customers, but corporate banking does not attract a significant number of customers but does attract affluent clients.
The processing cost in retail banking is low, whereas the processing cost in corporate banking is substantial.
Corporate banking is more profitable than the retail banking segment of the banks in terms of profitability.
Conclusion
Retail and corporate financial institutions are inextricably interconnected because of who they serve. Companies rely on consumers to purchase the products and services successfully, while customers rely on companies to meet the demand and/or solve a problem that cannot be simply solved by a person. Businesses and customers rely on one another to thrive, which means that retail banks and corporate banks, in theory, rely on one another to function properly.
