New Delhi, Feb. 13 -- Traditionally, a bank served only two types of customers: depositors, who were primarily individuals, and borrowers that were usually corporate entities. The bank courted both categories because it needed deposits for lending (after making allowances for statutory reserves and other risk mitigation measures) and the loans advanced allowed banks to make profits.

Over time, banks added other sources of income, such as treasury income earned by trading bonds or foreign exchange. Revenue streams were progressively diversified by including new services (issuing letters of credit, for example) and the sale of products from inhouse subsidiaries and even third-party providers. This helped hedge slowing credit demand during ...