Not all persons are equal. Neither are our financial needs. Yet all of us need banking services – from the very basic to the more complicated commercial needs.

For a migrant labour living outside there is a need to send money back home to his family. He needs a bank to keep his money and send across to his family. The family also needs an account to receive the money. The basic purpose here is send and receive money.

Previously, the same service used to be delivered through the postal department. The instrument of transfer then was money order. With the evolution of the banking services and with the availability of modern technology this mode though exists has transmuted into eMO or electronic money order. One can still send money orders but they have to be between Rs1000 and Rs50000. But it cannot be sent from any post to any post office unlike previously.

However, for those with remittance needs, a savings account ought to be the preferred route, be that in bank or post offices for the simple reason that one doesn’t need to keep cash at home in excess of need anymore. The same account can also serve the needs of a piggy bank and to deposit and transfer there is no need to visit banks anymore as all the basic needs can be satisfied by pushing a few buttons on the mobile.

But banks cannot survive on the remittances alone. And as we start going up the ladder our financial needs also expand. Loans, the primary earning instrument for the banks – they take money from us as savings and lend the same out against higher interest with the difference remaining as their primary source of income, are our second most important needs with the growth in income.

As we climb the ladder of prosperity we need to own houses, cars or even loans for other consumptions. This society survives on credit. We spend now only to make it up from our expected future stream of income. We also save alongside to cover the needs that may arise in future and may need to be covered not through loans but with own assets. The banks are the primary destination for our rising and spreading financial needs.

We need to remember that the bouquet of services that we now get from banks has not been there always. For example, banks are now selling insurance. But this was something that we couldn’t even imagine a few years back. Neither could we think of buying mutual funds, which incidentally are also of very recent (recent as in few decades of existence if we discount UTI products) origin, directly online within a specific bank’s online operational environment.

The same is true for banks’ engagement spectrum with businesses of various hues. From basic current account related operations, overdrafts or LCs to consortium lending and many other services, banks engagement spectrum with the business entities is no longer just a handful. It’s a huge spread.

While the banks have grown in response to the ever spreading needs of the customers, the regulators have also been facing challenges to anticipate the needs and place control mechanism in place lest events should overbear the legal bounds of operations.

It has long been in discussion whether banks can have similar focus for all types of customers or different formats of banks catering to different needs of the pyramid. But this is a different discussion.