Branch Banking vs Unit Banking

[Edit Comparison Table]

Branch Banking
Proper distribution of capital Distribution of Capital: and power. Rate of interest is uniformed and specified by the head Rate of interest:

Unit Banking
No proper distribution of capital and power. Rate of interest is not uniformed as the bank

Hide All hide

hide office or based on instructions has own policies and from RBI. Deposits and assets are diversified,scattered and rates. Deposits and assets are nt diversified and are at hide hence risk is spead at various one place,hence risk is places. not spread. More Operational hide freedom. Loans and advances are Loans and advances can hide

Deposits and assets:

Operational freedom:

Less Operational freedom.

Loans and advances:

based on merit,irrespective of be influenced by the status . Efficient,trained and authority and power. Less trained skilled and

Staffing: supervised. Larger financial resources in Financial resources: each branch. Delay in Decision-making as Decision-making: they have to depend on the head office. Funds are transferred from one branch and no one branch to support of other Funds: another.Underutilisation of branches.During financial funds by a branch would lead crisis,unit bank has to to regional imbalances close down.hence lead to resources in one branch Time is saved as Decision-making is in the same branch. Funds are allocated in supervised. Larger financial

hide

hide

hide

hide

Unit banking operate one full banking services. Branching laws in most states have been eased in the last several years.Branch Banking Unit Banking regional imbalances or no balance growth Hide All Cost of supervision: High Exists as improper use of Less Proper checks are taken hide Mismanagement: power and authority exist up. Restrictive branching laws encourage large numbers of small. branches were housed in imposing buildings. e. Branch banking center or financial center refers to a single bank which operates through various branches in a city or in diferent locations or out of the cities. State Bank of India. and large multibank holding companies owning numerous unit banks. often in a neoclassical .g.no misuse of Mismanagement hide Concentration of power in the Yes hand of few people: Specialisation not Division of labour is possible possible due to lack of Specialisation: and hence specialisation trained staff and possible knowledge High competiton with the Competition: branches Shared by the bank with its Locality/Resources/Funds/Profits: branches Specialised knowledge of the local Not possible and hence bad borrowers: debits are high development of the bank Possible and less risk of bad debts the bank Used for the hide Less competition within hide hide No hide Differences in Definition Unit banking refers to a single bank which renders services and operates without any branches anywhere. It offers a wide array of face to face service to its customers. independently owned state banks. permitting geographic expansion and branch banking .Historically. This kind of banking system is common in India. This kind of banking system is common in the USA.

An example of a unit bank is a community bank. or operation of more than one full-service banking office. such as a shopping mall. unit banking banking system in several states that prohibits branching. independently owned state banks. Branch banking networks are gradually evolving into multi-state financial services networks where depositors can access their accounts from any banking office. Due to Reserve Bank of India guidelines. are sometimes referred to as unit banks. branch banking multi-office banking. Most states passed laws enabling interstate branching prior to that date. Banks in India have traditionally offered mass banking products. Its importance in the banking system has declined since the late 1980s with the rapid growth of interstate banking and. generally defined as accepting deposits or making loans at facilities away from a bank's home office. In the 1990s. Bankers Cheque and Internal Transfer . branches may also take the form of smaller offices within a larger complex. Most common deposit products being Savings Bank. were finally lifted. Branch banking has gone through significant changes since the 1980s as banks responded to a more competitive nationwide financial services market. Further. Banks operating in these states. Today. more often than not. Banks have had little to do besides accepting deposits at rates fixed by Reserve Bank of India and lend amount arrived by the formula stipulated by Reserve Bank of India at rates prescribed by the latter.Other financial institutions reduce their costs by having no branches and are sometimes known as virtual banks. chain banking control of three or more independently chartered banks by a few individuals. or open new ones. PLR (Prime lending rate) was the benchmark for interest on the lending products. or multioffice banking within a single institution and group banking by affiliate banks within a bank holding company. remittance products were limited to issuance of Drafts. Restrictive branching laws. usually through stock ownership or interlocking directorates. insurance sales (where it is allowed by law). in several states. most prevalent in the Midwest and the Southwest.architecture style. Financial innovation such as internet banking will also influence the future of "bricks and mortar" banking by potentially reducing the need to maintain extensive branch networks to service consumers. bureau de change. and large multibank holding companies owning numerous unit banks. safe deposit box rentals. The Riegle-Neal Interstate Banking & Branching Efficiency Act of 1994 authorized well-capitalized banks to acquire branch offices. encouraged chartering of large numbers of small. Branching laws in most states have been eased in the last several years. more liberalized branching laws. But PLR itself was.Services provided by a branch include cash withdrawals and deposits from a demand account with a bank teller. Chain banking differs from branch banking. 1997. regulatory limitations on bank branching. Term deposit Account and lending products being Cash Credit and Term Loans. anywhere in the United States outside their home state after June 1. Current Account. permitting geographic expansion and branch banking networks across the United States. Telegraphic Transfers. such as the 1920s era mcfadden act that restricted branching to a bank's home state. located principally in the Midwest. financial advice through a specialist. is a local bank operating just as a single branch. etc. dictated by RBI.

Direct Selling Agents (DSAs) of various Banks go out and sell their products.2000 has further facilitated the entry of banks in this sector. Certificates of deposit. banking industry has been deregulated and made competitive. Public Sector Banks like SBI have also started focusing on this area. Home banking has already become common. Banks are also changing with time and are trying to become one-stop financial supermarkets. financing against gold. products like interest rate swaps and forward rate agreements for foreign exchange. Corporates are also deriving benefit from the increased variety of products and competition among the banks. Eventually. Citibank has been offering net banking to its Suvidha program to customers. flexi deposits. Further. They make house calls to get the application form filled in properly and also take your passport-sized photo. called Infinity. consumer durable loans. ICICI bank was the first among the new private banks to launch its net banking service. SBI plans to open 100 new branches called Personal Banking Branches (PBB) this year. Cash Management services. due to exposure to global trends after Information explosion led by Internet. request cheque books and stop payment. SGL II accounts. the Banks plan to market bonds and debentures. personal loans. redefined the role and structure of banking in India. in fact. New distribution channels are being used. Rapid strides in information technology have. Financial market has turned into a buyer's market. Products like debit cards. when allowed. As part of the economic reforms. Investment products and Tax Advisory services. car loans. The PBBs will also market SBI's entire spectrum of loan products: housing loans. A few foreign & private sector banks have already introduced customised banking products like Investment Advisory Services. In view of several developments in the 1990s. Insurance peddling by Banks will be a reality soon.both Individuals and Corporates . . housing loans and vehicle loans have been introduced by a number of banks. It allows the user to access account information over a secure line. and even transfer funds between ICICI Bank accounts. market has also seen major developments in treasury advisory services. The recent Credit Policy of RBI announced on 27. Non-convertible Debentures (NCDs) that can be traded in the secondary market are gaining popularity. personal loans including consumer loans. education loans. The list is growing. New players have added to the competition. Banks also offer advisory services termed as 'private banking' to "high relationship .of funds. Market focus is shifting from mass banking products to class banking with introduction of value added and customised products. loans against share. Photo-credit cards. Recently. With the introduction of Rupee floating rates for deposits as well as advances. the entire banking products structure has undergone a major change.4. ATM cards. Commercial papers. IT revolution has made it possible to provide ease and flexibility in operations to customers. Credit card business.value" clients. where you can order a draft or cash over phone/internet and have it delivered home. risk management products like forward contract.are now demanding better services with more products from their banks. customers . A few banks have gone in to market mutual fund schemes. option contract. currency swap are offered by almost every authorised dealer bank in the market. The bank of the future has to be essentially a marketing organisation that also sells banking products. more & more banks are outsourcing services like disbursement and servicing of consumer loans.

Home >> Technology Products >> Real Time Gross Settlement Real Time Gross Settlement (On line Funds Transfer to other banks) What is RTGS? Real Time Gross Settlement System (RTGS) is a funds transfer mechanism where transfer of money takes place from one bank to another on a real time basis. this is an electronic payment processing environment wherein transactions are settled as soon as they are processed. In other words. Who can avail this Only customers of the branch where they are having facility Savings/Current Accounts In what way it is beneficial to the Customers Customer can remit funds to the account of another RTGS enabled bank branch The funds are transferred instantaneously at nominal charges .

50 per transaction for remittance Rs.5 lakhs and above What the customer must have for remittance IFSC of the bank branch to which the remittance to be made (IFSC is 11 characters code) Beneficiary account number.5 lakhs Not exceeding Rs. Account Number of the beneficiary is to be mentioned correctly in the voucher (to whom the remittance is intended to ).25 per transaction for remittance up to Rs.000 No Limit Charges Not exceeding Rs.00.Min Amount for Transfer Max Amount for Transfer Rs. Name and Address (to whom the remittance is intended to ) Approach the branch with the above details y y It is available on the cheque leaf supplied by the bank Can also get from the branch How to get the IFSC of the branch What is the time frame for reaching the funds at the other end Instantaneous Cut off time for remittance through RTGS Monday to Friday : 0900 hrs to 1630 hrs Saturday : 0900 hrs to 1330 hrs RTGS works on all days except on Sundays and National Holidays Important Account Outward :While remitting the funds.1. .

Andhra Bank.co.in . Helpline For further details please contact or your account branch 1. RTGS branch 8 â⠬â F Maker Towers. Cuffee Parade.Number Inward : While seeking remittance from other bank Customers it is mandatory to quote your 15 Digit Finacle Account Number compulsorily. 400 023 MUMBAI â⠬â Phone : 022-22168047 email: bmmum1250@andhrabank.