In order to grow the private banking sector, banks are now aiming at the rich from smaller towns. The growth in these towns is much more since these markets are not so nicely penetrated though bigger cities continue to bring in volumes. During the recent years, banks have been focusing on their private banking business, a customized banking service targeting the upper end of retail banking. The services offered include investments, wealth management, estate management tax planning and concierge services.
The eligibility requirement for private banking services differ from bank to bank. Normally, a private banking client should have an investible excess ranging from Rs 1.5 crore to Rs 5 crore. The financial crisis has also opened a new gateway to few of the new generation private banks and foreign banks. Banks like HDFC Bank and Standard Chartered have seen a massive increase in their assets under management (AUMs) while others such as Kotak Mahindra Bank have seen an upsurge after the crisis.
However the problem is that it is difficult to get good, experienced senior managers to service the clients in these places. Not many would be ready to go there. An available option would be take a junior manager, but that would affect the quality of service.