NEWS & ADVICE : CREDIT CARDS
Banks record growth in retail fees to compensate for decline in corporate fees
By Ankit Sharma
Nov 15, 2012
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The increased expenditure by credit cards, boost in third-party products sales and growth in demand for retail loans have helped banks to curtail the effect of decline in fee income from corporate segment.

Leading private sector banks have recorded an increase in fee income from retail segment even though the fee income from corporate sector has decreased. India's third largest private sector bank, Axis Bank, has recorded 43 percent year on year increase in fees from the retail segment in the second quarter of this year. In the corporate loans space, the bank recorded 15 percent growth in fee income. Fee income from other segments, such as agricultural banking fee and SME sector fee have increased by 17 percent in the same quarter.

On the matter, a senior executive of Axis Bank said that the bank considers retail segment fees as its strength. The biggest reason for the increase in retail fees can be attributed to growth in consumer loans and credit card spending. He further added that the sale of third party products like life insurance policies etc is expected to increase further in January.   

It is to be noted that fee income from the retail segment for banks consist of commission from the sale of third party products such as insurance policies, mutual funds, transaction charges from savings accounts and current accounts, processing fees from credit cards and retail loans and fees from foreign exchange remittances.


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