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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

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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.

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Data sharing is not applicable to this article as no datasets were generated or analyzed during the current study.

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Acknowledgements

We thank the anonymous referees for their useful suggestions.

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Authors and Affiliations

  1. Operations Management, Axis bank Limited, Mumbai, India

    Narendra Singh Ranawat

  2. Engineering and mathematics, School of Engineering, IT and Physical Sciences, Federation University, Ballarat, VIC, Australia

    Ayon Chakraborty

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  1. Narendra Singh Ranawat
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  2. Ayon Chakraborty
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Contributions

All authors contributed to the study conception and design. Material preparation, data collection and analysis were performed by *1Narendra Singh Ranawat, 2Ayon Chakraborty. The first draft of the manuscript was written by *1Narendra Singh Ranawatand all authors commented on previous versions of the manuscript.

All authors read and approved the final manuscript.

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Correspondence to Narendra Singh Ranawat.

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Ranawat, N.S., Chakraborty, A. 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-Pac Financ Markets (2023). https://doi.org/10.1007/s10690-023-09419-6

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