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  • Branch and Unit Banking

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    Sheetal Thomas
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    Branch banking has several advantages over unit banking such as allowing for specialization of tasks, greater competition between branches, diversification of deposits and assets reducing risk, and more efficient use of financial resources. However, it also has some disadvantages like potential for mismanagement if power is too concentrated, and less operational freedom compared to unit banks. Unit banking has advantages such as faster decision-making since it is localized within one branch, but it also has drawbacks like lack of specialization since staff may not be as well-trained, potential for loans to be influenced by authority, and higher risk since funds are concentrated in one location.

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    its is part of banking course in MGU.

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    Branch banking has several advantages over unit banking such as allowing for specialization of tasks, greater competition between branches, diversification of deposits and assets reducing risk, and more efficient use of financial resources. However, it also has some disadvantages like potential for mismanagement if power is too concentrated, and less operational freedom compared to unit banks. Unit banking has advantages such as faster decision-making since it is localized within one branch, but it also has drawbacks like lack of specialization since staff may not be as well-trained, potential for loans to be influenced by authority, and higher risk since funds are concentrated in one location.

    Copyright:

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    349 views1 page

    Branch and Unit Banking

    Uploaded by

    Sheetal Thomas
    Branch banking has several advantages over unit banking such as allowing for specialization of tasks, greater competition between branches, diversification of deposits and assets reducing risk, and more efficient use of financial resources. However, it also has some disadvantages like potential for mismanagement if power is too concentrated, and less operational freedom compared to unit banks. Unit banking has advantages such as faster decision-making since it is localized within one branch, but it also has drawbacks like lack of specialization since staff may not be as well-trained, potential for loans to be influenced by authority, and higher risk since funds are concentrated in one location.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
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    of 1

    BRANCH BANKING Vs UNIT BANKING ( Module-1)

    Branch Banking Unit Banking


    Exists as improper use of power Proper checks are taken up.no
    Mismanagement:
    and authority exist misuse of Mismanagement
    Concentration of power in the hand of few
    Yes No
    people:
    Division of labour is possible Specialisation not possible due
    Specialisation: and hence specialisation to lack of trained staff and
    possible knowledge
    High competiton with the Less competition within the
    Competition:
    branches bank
    Shared by the bank with its Used for the development of
    Locality/Resources/Funds/Profits:
    branches the bank
    Not possible and hence bad Possible and less risk of bad
    Specialised knowledge of the local borrowers:
    debits are high debts
    Proper distribution of capital No proper distribution of
    Distribution of Capital:
    and power. capital and power.
    Rate of interest is uniformed and Rate of interest is not
    Rate of interest: specified by the head office or uniformed as the bank has own
    based on instructions from RBI. policies and rates.
    Deposits and assets are Deposits and assets are not
    Deposits and assets: diversified,scattered and hence diversified and are at one place,
    risk is spead at various places. hence risk is not spread.
    Operational freedom: Less Operational freedom. More Operational freedom.
    Loans and advances are based Loans and advances can be
    Loans and advances: on merit,irrespective of the influenced by authority and
    status . power.
    Less trained skilled and
    Staffing: Efficient,trained and supervised.
    supervised.
    Larger financial resources in Larger financial resources in
    Financial resources:
    each branch. one branch
    Delay in Decision-making as
    Time is saved as Decision-
    Decision-making: they have to depend on the head
    making is in the same branch.
    office.
    Funds are allocated in one
    Funds are transferred from one branch and no support of other
    branch to another. branches. During financial
    Funds: Underutilization of funds by a crisis, unit bank has to close
    branch would lead to regional down. hence lead to regional
    imbalances imbalances or no balance
    growth
    Cost of supervision: High Less

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