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The Impact of Third-Party Financial Products on the Consumer Loan Services Market in the Banking Sector: An Analysis of Sales Progress and Consumer Behavior

Author

Listed:
  • Narendra Singh Ranawat

    (Operations Management, Axis bank Limited)

  • Ayon Chakraborty

    (Federation University)

Abstract

Certain predominant Banks astride across India stayed esoterically stable while graphing nascent opportunities in retail banking sectors to intensify their financial values. And concomitantly, Money lending facilities i.e., Consumer Loan services are one of those offerings which are supposed to meet the customer’s needs and requirements. But due to a lack of proper ‘customer education’, customers are made to purchase third-party financial products like mutual funds or insurance policies as mandatory at the time of disbursement of loans by the bank officials, which results in financial losses to the customers. The study is carried out to explore various loan facilities provided by major banks so that customers can avail of the loan facilities as per their requirements. We have studied and surveyed all consumer loan services available, and on the basis of certain parameters such as Interest Rates, Equated Monthly Installment (EMI), Processing Fee, Pre- Payment Charges, Charges for Late Payments of EMI, Cheques/ Electronic Clearing Service (ECS) Return Charges, Mandate Life Insurance Policies, etc. The study concluded that customers should be exposed to all types of terms and conditions regarding third-party financial products at the time of loan disbursement so that every customer can be protected from mis-selling third-party financial products. Therefore, this study will enhance the literature towards’ customer education’ and will spread awareness of certain terms and conditions to the customer at the time of disbursement of loans in their account.

Suggested Citation

  • Narendra Singh Ranawat & Ayon Chakraborty, 2024. "The Impact of Third-Party Financial Products on the Consumer Loan Services Market in the Banking Sector: An Analysis of Sales Progress and Consumer Behavior," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 31(2), pages 367-387, June.
    • Handle: RePEc:kap:apfinm:v:31:y:2024:i:2:d:10.1007_s10690-023-09419-6
    DOI: 10.1007/s10690-023-09419-6
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