Difference between Retail and Wholesale Banking

Those days are gone when banking referred to only one thing that is a place where savers can deposit money and borrower take loan when they are in need of funds, however nowadays banking has changed completely and it encompasses many things. Retail and wholesale banking are two of them; let’s look at some of the differences between retail and wholesale banking –

Retail and Wholesale Banking Differences


Retail banking refers to that banking which targets individuals and the main focus of such banks is retail customer whereas wholesale banking refers to that banking which targets corporate or big customers and their main focus is providing services to corporate clients.

Ticket Size of Loan

Ticket size of loans given in retail banking is low and due to it impact of NPA will be less pronounced due to diversification as compared to wholesale banking where ticket size of loan is very high and due to it impact of NPA is more pronounced.


Loans such as car, housing, educational, personal loans are some of the examples of loans given in retail banking whereas loans such as loan for setting industry, machinery advance, export credit are some of the examples of loans given in wholesale banking.

Monitoring and Recovery

Monitoring and recovery if the loan turn out to be NPA in retail banking is more difficult because customer base is wide whereas in case of wholesale banking due to low customer base it is easy to monitor as well recover the loan given to customers.

Interest Rates

Cost of deposit is low in retail banking because retail customers do not have the bargaining power due to less deposit with them whereas in case of corporate customers banks have to offer them high interest rates in order to attract funds from them.

Operational Costs

Retail banking requires large network of branches in order to cater to large customer base and hence it results in high operational costs while in case of wholesale banking small number of branches is sufficient to cater to corporate clients.

As one can see from the above that retail and wholesale banking are very different from each other and that is the reason why many banks have separate branches for retail business and wholesale business.

0 comments… add one

Leave a Comment

Related pages

what is a floating exchange rate systemdistinguish between job costing and process costingthe difference between accounts payable and accounts receivabletypes of elasticity of demand with examplesprofibility ratiofullform of impsmonopoly and oligopoly market structureshow to calculate national income by expenditure methodwhat is the difference between systematic risk and unsystematic riskslr crrfictitious assets examples wikipedialifo systemwho is a consignee and consignordirect indirect quotationpenetration skimmingwhat are different types of chequesdifferent types of liquidity ratiosdisadvantages of oligopolymerits and demerits of globalizationsole proprietorship features advantages and disadvantagescapital budgeting decisions examplesadvantages and disadvantages of oligopoly market structuredistinguish between micro and macro economicsdifference between cash credit and bank overdraftadvantages and disadvantages of skimming pricingdifference between revenue and capital expenditurebenefits of devaluing currencyauthorized shares vs outstanding shareswhat are the disadvantages of capitalismwhat is the difference between shares and debenturesdictatorship disadvantagesloan vs overdraftbenefits of specialisationtheory of absolute advantage by adam smithaccounting entries for purchasesdifference between retail and wholesale bankingbackward integration advantages and disadvantagesadvantages of perfect competitiondvr stockcentrally planned economy definitionwhen to use autocratic leadershipweakness of command economyadvantages of marketing segmentationdefinition of capital budgeting in financial managementmeaning of balance sheet in hindimonopoly price makerunearned revenue earned journal entryveblem goodsdisadvantages of planned economynestle advantages and disadvantagesadvantages of the payback methodjournal entry for salary paid to employeesdistinguish between job costing and process costingdiversifiable and nondiversifiable riskreasons for failure of mergers and acquisitionspros and cons of autocratic leadershipnormal good inferior goodadvantages of specialisation economicsadvantages and disadvantages of accounting rate of returnimpulse buying meaningwhat is conservatism conceptwhat are manufacturing overheadsadvantages of traditional economyrental income journal entryadvantages capitalismpenetration marketing strategy examplewhat is a derivative marketwhat is capm in financial managementwhat is the difference between accounts receivable and accounts payablestable dividend policy definitionprepayments journal entryjunk bonds advantagesunearned revenue in accountingadvantages and disadvantages of advertisementperfect competition market structure examplesdiscounting bills of exchangedisadvantages of specialization in economicshorizontal takeoveradvantages of socialismconglomerate company definitionperfect or pure competitionadvantages and limitations of marginal costingwhat is journal entry for prepaid expenses