Rural retail banking in India: Future trends; Scenario development based on a Delphi study approach

Abstract

Our study aims at creating awareness and fostering interaction between rural retail banking experts including executives of various retail and national banks, strategy consultants, academics and other interested parties to create an understanding of the state of the rural retail banking industry in India at present and especially to develop a clearer picture of the industry towards the end of this decade. The study was conducted in three stages; the first stage consisted of survey of literature on the state and emerging trends of rural retail banking in India. This survey laid the basis of creating projections for the survey of experts in the second stage based on the Delphi approach. In the survey, the experts were provided with list of 20 projections spanning the following areas: • Political environment. • Economic environment. • Social Environment. • Technological environment. The participants were asked to assess each of these projections in terms of their probability of occurrence, their impact on the Indian rural retail banking industry and of course the desirability of occurrence of these projections. They were also encouraged to justify their responses by providing comments. The third phase involved analyzing the experts’ opinions to develop a picture of the industry over this decade and then identifying the key opportunities. For each of the projections, the likelihood & desirability has been analysed and recorded below. The likely scenario that has emerged can be summarised as a low-frill, technology intensive model that will enable low cost per transaction for banks, convenience for customers and security through extensive consumer identity and credit databases.