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Problem of Management: Under the branch banking system a number of difficulties as regards management, supervision and control arise: (a) since the management of the bank gets concentrated at the head office, the managers can afford to be lax and indulgent in their duties and are often involved in serious irregularities while using the funds. (b) Since the branch manager has to seek permission from the head office on each and every matter, this results in unnecessary delay and red- tapism in the banking business. 2. Lack of Initiative: Branch managers generally lack initiative on all-important matters; they cannot take independent decisions and have to wait for. The clearance signal from the head office. 3. Monopolistic Tendencies: Branch banking encourages monopolistic tendencies in the banking system. A few big banks dominate and control the whole banking system of the country through their branches. This can lead to the concentration of resources into a few hands. 4. Regional Imbalances: Under branch banking system, the financial resources collected in the smaller and backward regions are transferred to the bigger industrial centres. This encourages regional imbalances in the country. 5. Adverse Linkage Effect: Under branch banking system, the losses and weaknesses of some branches also have their effect on other branches of the bank. 6. Inefficient Branches: In this system, the weak and unprofitable branches continue to operate under the protection cover of the large and more profitable branches. 7. Other Defects: Other defects of branch banking system arc as follows:
May 12. In foreign countries. Fewer bank failures have occurred among large banks.(a) Preferential treatment is given to the branches near the head office. Less Costly Larger banks have the resources and system to deliver low cost. Highly trained and experienced staff is appointed which increases the efficiency of the management. . 4. More Safer A large banking system is generally safer.Deposits are received from the areas where lots of savings and loans are extended in those areas where funds are scarce and interest rates are high. broadly based services. 2010 Followings are the main advantages of branch banking 1. Diversification A branch banking organization can diversify its sources and uses of funds among various users. the bank with a number of branches processes huge financial resources and enjoys the benefits of large-scale operations. 3. (b) Higher interest rates are charged in the developed area to compensate for the lower rates charged in the backward areas. (d) Many difficulties are faced when a bank opens branches. Advantages Of Branch Banking Wednesday. It can direct funds into a market requiring financing. Greater efficiency Under branch banking system. 2. (c) There is concentration and unhealthy competition among the branches of different banks in big cities.
. Security against the risk of failure The branch banking is less risky and greater capacity to handle risks. branch banking demerits of unit. Close X Banking Management þÿ Search Lijit Ad Wijit Lijit Search Wijit þÿ Popular Searches advantages of branch.. 6. what is unit banking My Content Marketing • • Lijit Search .. unit banking unit banking... The losses incurred by some branches may be offset by the profits earned by other branches.. it is easier and cheaper to transfer funds from one place to another..5.. Since the bank branches are spread over the whole country. non-deposit. Variety of services and low transaction costs A greater variety of services and products become available to a broader banking public.
.. Banking Efficiency Advantages And Disadvantages Of Bank Holding Compa.Blog Archive • ▼ 2010 (30) o ► June (1) Sources Of Demand And Supply For Liquidity Within ...... Show older posts . Income Statement Of A Bank Bank Liabilities And Capital Accounts Bank Assets Or Items Included In The Assets Side O.. The Balance Sheet Or Report Of Condition Of Bank The Financial Statements Of Bank Impact Of Organization Type And Size On Bank Perfo... Bank Holding Company Organization Disadvantages Of Branch Banking Advantages Of Branch Banking Branch Banking Disadvantages Of Unit Banking Advantages Of Unit Banking Unit Banking Factors Affecting Banks And Their Management Decis. o ▼ May (18) The Demand For And Supply Of Bank Liquidity Liquidity And Reserve Management Strategies And Po. Show older posts Showing newest posts for query branch banking. o ► January (11) Central Bank's principal Task Functions and powers of Central Bank Objectives Of Central Bank The Central Banking System Demerits Of Bank Regulation Merits Of Bank Regulation Significance For Banking Regulations Banking Regulation Trends Affecting Banks The services The Banks Offer The Public Meaning And Nature Of Bank Traffic Showing newest posts for query branch banking...
Each member banks retains its separate entity and maintains its board of directors. 4. 6. Large scale banking operations often indulge in corrupt practices. 2010 Advantages Followings are Of the main Bank advantages of Holding bank holding Company company 1. grouped banks enjoy the benefits of centralized administration. effective supervision is not possible. Services of experts can be made available to the member banks to manage their business efficiently.Advantages And Disadvantages Of Bank Holding Company Friday. 4. The failure of one bank has its adverse effects on other member banks. funds can be transferred other banks 2. Posted by Keshav Poudel at 3:38 AM 0 comments Disadvantages Of Branch Banking Wednesday.In case of crisis. Efficiency of the member bank is adversely affected by the management of the holding company which uses the banks as vehicles of manipulation and speculation. May 12. 3. 5. There is greater liquidity and mobility of resources. at the same time. 3. May 14. The common purchasing agencies often indulge in corrupt practice. There is also a common purchasing agency which leads to economy in purchases. 2. So. Disadvantages Followings are the Of main Bank disadvantages of Holding bank holding Company company 1. Common standardized account system improves the working of member banks. But. The control of member banks under the group banking system is less direct and more flexible than under branch banking. 2010 . There is economy of advertisement expenditure.
4. A few big banks dominate and control the whole banking system of the country through their branches. Monopolistic tendencies Branch banking encourages monopolistic tendencies in banking system. the branch managers are unable to make quick decisions and they may lose profitable opportunities.This reduces the performance of the bank. Although there fewer large bank failures. Lack of flexibility and delay in decision-making Since the branch manager has to seek permission from the head office on each and every matter. 1. 3. Difficulty in supervision Since the branches are spread over the country. This limits competition and leads the monopolistic tendencies.Followings are the main disadvantages of branch banking system.So. this results in unnecessary delay in the banking. 2. so there is difficulty in efficient supervision and control of the all branches. Posted by Keshav Poudel at 3:45 AM 0 comments Advantages Of Branch Banking . the impact of a large bank failure presents great loss in amount and type of banking services. Chances of failure Larger banks are not immune to failure.
Fewer bank failures have occurred among large banks. Greater efficiency Under branch banking system. it is easier and cheaper to transfer funds from one place to another. It can direct funds into a market requiring financing. broadly based services. Less Costly Larger banks have the resources and system to deliver low cost. 5. Since the bank branches are spread over the whole country. 6. Highly trained and experienced staff is appointed which increases the efficiency of the management. Diversification A branch banking organization can diversify its sources and uses of funds among various users. The losses incurred by some branches may be offset by the profits earned by other branches. 2. 4. the bank with a number of branches processes huge financial resources and enjoys the benefits of large-scale operations.Deposits are received from the areas where lots of savings and loans are extended in those areas where funds are scarce and interest rates are high. Variety of services and low transaction costs A greater variety of services and products become available to a broader banking public. More Safer A large banking system is generally safer. 3. Security against the risk of failure The branch banking is less risky and greater capacity to handle risks.Followings are the main advantages of branch banking 1. Posted by Keshav Poudel at 3:28 AM 0 comments Branch Banking .
Now most of the banks are operating in branch banking system. Prone to risk and failure Limited resources of the unit bank restrict their ability to face financial crisis. including a head office and other one or more full-service branch offices. branch banking developed in England.Australia etc. it also become popular in other countries like Canada.Branch banking system is very widely spread in the comparison to unit banking system. To start with. 3. most of the banking business is in the hands of five big banks. Unit banks are not in a position to stand a sudden rush of withdrawals. In England.Branch banking is a system where full range banking services are o ffered from several locations. the bank operations are highly localized. Posted by Keshav Poudel at 3:21 AM 0 comments Disadvantages Of Unit Banking Followings are the main disadvantages of unit banking 1. there is less possibility of diversification of risk in various areas. India. No risk diversification Under the unit banking. Costly remittance of funds . later on.So. 2.
4. 3. there are fewer chances of irregularities and fraud. so capital and staff requirement in the bank is also small. Little capital and staffs Unit banking is small in size. local pressure and interferences generally disrupt their normal functioning. Thus. 1. Local pressure Since. Posted by Keshav Poudel at 3:09 AM 0 comments Advantages Of Unit Banking Following are the main advantages of unit banking system. Easy Management The management and supervision of unit bank is much easier and more effective than that under branch banking system. Unit banking usually enjoy lower operating costs than branch banks of comparable size. This results in unhealthy competition among different unit banks. 5. Efficiency Unit banking increases the efficiency of bank because it provides prompt services to customers due to competition from other unit banks.So. unit banking are highly localized in their business. there are fewer costs in the operations.Unit banking has no branches at other place. Unhealthy competition Unit banks are independently run by different managements. 4. it has to depend upon the correspondent banks for transfer of funds which is very expensive. 2. Thus. 5. Local development . Less operational costs Unit banking are generally in small size.
Posted by Keshav Poudel at 2:19 AM 0 comments Newer Posts Older Posts Home Subscribe to: Posts (Atom) frontpage hit counter Site Meter . Unit bank system originated and grew in the United States Of America. drive-in windows. The size and the area of operation of a unit bank are much smaller than the branch banking system.Collected deposits from the local areas are utilized for the development of the same locality. unit banking helps in local development. The main reason for the development of unit banking system in America is the fear of emergence of monopoly in banking business.So. Such office may have offer facilities such as. retail store point-of-sale terminals that are linked to the banks' computer system and Internet website. Posted by Keshav Poudel at 2:58 AM 0 comments Unit Banking Banking organization whereby all services of banks are offered from one office. Different unit banks in America are linked with each other and with other financial centers in the country through correspondent banks. automated teller machines.
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