The SBU model treats Retail Banking as a semi-autonomous unit (Profit Center). It has defined targets, dedicated resources, and separate P&L accountability, allowing for focused growth strategies independent of other bank divisions.

Horizontal organization breaks product silos. Instead of separate departments for Loans, Cards, and Deposits acting blindly, customer data is shared horizontally to enable cross-selling and better relationship management.

In a vertical model, each product line operates independently with its own P&L. While this allows specialization, it often creates silos where one department doesn't know the customer's relationship with another department, hindering a unified customer experience.

Private banks leveraged technology (ATMs, Internet) early to offer superior service and convenience, targeting the profitable urban salaried class, unlike PSBs which had a broader social mandate.

This is a traditional model where retail is just another department alongside others. It typically lacks the focus and agility of the SBU model and is often used by smaller or older public sector banks.

Synergy between Corporate and Retail banking is a major growth driver. A bank holding a corporate account can easily tap into the retail business of that corporate's thousands of employees (B2B2C model).

This diversification is the biggest strength. Unlike a corporate loan where one default can wipe out profits, retail defaults are usually small and statistically predictable.

In this model, branches focus only on sales and customer service. All operational tasks (account opening, loan sanctioning, clearing) are moved to a Centralized Processing Unit to improve efficiency and standardize risk.

Horizontal structures break down silos, allowing data and processes to flow across product lines. This enables the bank to see the "whole customer" and offer relevant products (e.g., offering a home loan to a savings account customer).

BPR involves rethinking workflows from scratch (e.g., implementing Centralized Processing Units for loans) to eliminate redundancies and improve customer turnaround time (TAT).

Most PSBs still follow the departmental approach where retail is one division within the general banking framework, though many are slowly moving towards the SBU model for better focus.

While banks can outsource support functions like marketing, recovery, or IT maintenance, the core decision-making function of Sanctioning Loans (taking credit risk) must remain with the bank's own officers.

Since the SBU is an independent profit center, its head has autonomy and direct accountability to the top leadership for the unit's performance.

CPUs take the burden of processing, documentation, and sanctioning away from branches. This allows branches to focus on sales while specialists at CPU ensure uniform risk assessment and faster sanctions.

Home loans are secured by the mortgage of the property being financed. Personal loans and credit card debt are generally unsecured. Education loans up to ?4 Lakh are collateral-free.

With millions of transactions, the risk of system failure, fraud, human error, and cyber attacks (Operational Risk) is significant in retail banking.

CKYCR stores KYC records centrally. A customer with a CKYC identifier can open accounts with other banks/insurers/mutual funds without submitting physical documents again.

A horizontal structure integrates data across products, giving the bank a 360-degree view of the customer's total relationship (savings + loans + cards), enabling better service and cross-selling.