General Studies · Retail vs Wholesale Banking

A senior credit officer is evaluating a complex loan proposal and must distinguish between the operational frameworks of Retail and Wholesale banking. Statement 1: Retail banking operations are characterized by a 'Mass Market' approach where the bank focuses on a high volume of low-value transactions, necessitating a robust and extensive branch network or a highly scalable digital infrastructure to maintain customer touchpoints. Statement 2: Wholesale banking, conversely, operates on a 'Niche Market' principle where the relationship managers handle a limited number of high-profile corporate accounts, and the physical presence of branches is less critical than the bank's presence in major financial hubs. Statement 3: The credit risk in retail banking is analyzed using automated 'Credit Scoring Models' based on historical data and credit bureau reports, whereas wholesale banking requires a 'Judgmental Appraisal' involving detailed cash flow analysis and industry benchmarks. Statement 4: One of the primary advantages of retail banking is that the deposits are 'Granular' and 'Stable,' meaning they are less likely to be withdrawn in bulk during a market crisis compared to the 'Volatile' large-ticket deposits often found in corporate banking. Which of the following summaries accurately describes the statements provided above?