Sustainable Financial Practice and Non-Fund Business in India: An Empirical Evidence

Abstract

Non-Fund Business (NFB) is one of the major emerging business trends of the Scheduled Commercial Banks (SCBs) and Financial Institutions (FIs) of India in the recent time. SCBs and FIs have created the necessary space in their business strategies and involved in non-fund business by marketing the financial products of other financial institutions, as a sustainable financial practice. The NFB, in fact and of late has been given significant thrust for the effective use of existing human resources of the institutions, to earn non-fund income. This research has captured the ground perspectives of the Cross Marketing of Financial Products (CMFP) as a NFB, along with the method and tools employed for the same, by the Public Sector Banks (PSBs) in one of the major urban setups of the southern part of the country. It has also highlighted the various challenges in the “so called” sustainable business practice. It is imperative that the banks have undertaken the non-fund business at the cost of their own financial products and by relegating core banking functions for the paltry gains. The process has also pushed their workforce into work related stress. At the same time, the fear of losing existing customer from the bank operations is evident due to change in business strategies and gradually distancing the customers’ interest of core banking activities. The research has offered number of policy implications to strengthen to create the win-win situation with strong bank-customers’ business relationship.