in today ’ s world of banking. retail banking in india retail banking in india is not a new phenomenon. it has always been prevalent in india in various forms. for the last few years it has become synonymous with mainstream banking for many banks. the typical products offered in the indian retail banking segment are housing loans, consumption loans for purchase of durables, auto loans, credit cards and educational loans. the loans are marketed under attractive brand names to differentiate the products offered by different banks. as the report on trend and progress of india, 2003 - 04 has shown that the loan values of these retail lending typically range between rs. 20, 000 to rs. 100 lakh. the loans are generally for duration of five to seven years with housing loans granted for a longer duration of 15 years. credit card is another rapidly growing sub - segment of this product group. in recent past retail lending has turned out to be a key profit driver for banks with retail portfolio constituting 21. 5 per cent of total outstanding advances as on march 2004. the overall impairment of the retail loan portfolio worked out much less then the gross npa ratio for the entire loan portfolio. divanna, joseph a. ( 2004 ) : the future of retail banking, new york : palgrave macmillan. within the retail segment, the housing loans had the least gross asset impairment. in fact, retailing make ample business sense in the banking sector. while new generation private sector banks have been able to create a niche in this regard, the public sector banks have not lagged behind. leveraging their vast branch network and outreach, public sector banks have aggressively forayed to garner a larger slice of the retail pie. by international standards, however, there is still much scope for retail banking in india. after all, retail loans constitute less than seven per cent of gdp in india vis - a - vis about 35 per cent for other asian economies - south korea ( 55 per cent ), taiwan ( 52 per cent ), malaysia ( 33 per cent ) and thailand ( 18 per cent ). as retail banking in india is still growing from modest base, there is a likelihood that the growth numbers seem to get somewhat exaggerated. one, thus, has to exercise caution is interpreting the growth of retail banking in india. drivers of retail business in india what has contributed to this retail growth? let me briefly highlight some of the basic reasons. first, economic prosperity and the consequent increase in purchasing power has given a fillip to a

challenge that may arise is that of proxy disintermediation, with the attendant risks of financial activities taking place outside the regulatory perimeter. the recent guideline on digital lending is an attempt to have an enabling framework, balancing competing considerations. most of the innovations in the delivery of financial services have an inherent aspect of conduct – the choice between exploitative vs responsible conduct. it is important to establish a common denominator of what is'responsible '. this dimension has a lot more subjectivity while seeking to address the issue. ethical and responsible banking, being sensitive to the needs of people we are serving, being inclusive in our approach to vulnerable sections of the society, taking prudent financial decisions - these all are the choices which are always available to each one of us engaged in the financial sector. banking fraternity being the trust bearer of the society owes it to people and the country, to be sensitive, inclusive, responsible, and prudent. our financial institutions have navigated and will continue to navigate through these choices. adopting unfair means, oblivious to the consequences may push top line in the short run but will potentially harm organisation in the long run. after all, financial institutions are not in this business for few years but for a long haul. hence, purely from a business point of view, it makes a lot of sense to act in the interest of all stakeholders. all aspects - affordability, accessibility, and especially the appropriateness should, therefore, be adhered whenever we design a financial product or deliver it. breaching any of the above cannot be a choice at all. vi. concluding remarks i have tried to briefly highlight the critical dualities of indian financial system. as mentioned earlier, i do not intend to judge any of these categories. the only intention to bring forth these dualities is to emphasize the largely organic evolution of indian financial system in response to our growing economy and highlight that the regulatory 6 / 8 bis - central bankers'speeches frameworks of rbi have facilitated meeting the ever - changing needs of the country. at every juncture of growth in financial system, at every kink, there are innumerable policy choices for a regulator. the decisions we make today have the potential to shape the present and future of our economy and our nation. but sometimes, we can wonder on what could have been the counterfactual and answering such a counterfactual is difficult. but it can be most certainly stated that the depth, size, and resilience