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Branch Banking Advantages And Disadvantages Pdf

branch banking advantages and disadvantages pdf

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6 Main Systems of Banking (With Merits and Demerits)

Branch Bank is a type of banking system under which the banking operations are carried with the help of branch network and the branches are controlled by the Head Office of the bank through their zonal or regional offices. Each branch of a bank will be managed by a responsible person called branch manager who will be assisted by the officers, clerks and sub-staff.

In England and India, this type of branch banking system is in practice. Thus branch banking is a system in which a bank renders its banking activities at two or more places. Head office has the overall control over the working of various branches.

Economies of Large Scale operations: Branch banking enjoys the advantages and economies of large scale operations. Under branch banking system economies can maintained through large scale of operations and wider geographical coverage increase public confidence in the banking system.

Economy of Cash Reserves: Under branch banking system a particular branch can operate without keeping large amounts of reserves. In time of need, resources can be transferred from one branch to another. It is not easy for a.

Proper use of capital: There is a proper use of capital under the branch banking system. Since the resources are transferred from one branch to another. So the capital can be properly used by investing in the profitable branches.

Economy of Costs: Branch banking has the advantage of effecting remittances of funds from one place to another with greater ease and at a lesser cost than unit banking, for inter-office indebtedness can be far more easily adjusted. Risks-spreading Economy: The spreading of risks geographically is another major advantage of the branch banking system. In branch banking, losses incurred one branch can be offset by profits earned by the profit making branches which is not possible in case of unit banking.

Easy and cheaper transfer of funds: Since the branches of bank under branch banking are spread all over the country, it is easier and cheaper, for it to transfer funds from one place to another. Greater Safety and Liquidity: Branch banking also offers a wider scope for the selection of diverse securities and varied investments, so that a higher degree of safety and liquidity can be maintained.

Balanced economical growth: Under branch banking, the banking facilities can be made available to all cities, towns, and even backward areas in the country. Thus, branch banking is very helpful in achieving a balanced growth of the country's economy. Convenient for the Central Bank's Supervision: Under a system of branch banking it is more convenient for the central bank or the government to regulate and supervise the activities of banks, as control becomes more effective and easier since only the head office is to be dealt with for the purpose.

Provision for Training the Personnel: Finally, branch banking provides the best training ground for personnel. A person may be trained in a small branch Where the pressure of work is less and he may be transferred later to an active branch. Disadvantages or Demerits of Branch Banking: Branch banking generally suffers from the following limitations:. Danger of Mismanagement: Under the branch banking system a number of difficulties as regards management, supervision and control, a number of branches undue expansions lead the danger of mismanagement.

Usually, application for big credits has to be referred to the head office by the branch manager. This causes delay and gives little initiative to branch managers. Lack of Personal Contact: A large bank tends to become more and more impersonal in its dealings.

The general managers have hardly any personal contact with the local people or the staff of different branches. High operating and maintenance expenses: Branch banking is very expensive, because with the opening of too many branches, establishment and maintenance charges of the branches are bound to be high and, as a result, profits may shrink.

Concentration of Monopoly Power in the hands of few banker: Branch banking sometimes creates monopoly power in the hands of few large bankers. Such a monopoly power in the hands of a few big bankers is a source of danger to the community whose goal is a socialistic pattern of society.

Lack of initiative: Branch banking lacks initiative. No branch office can take independent decisions and also branch manager has limited powers. Regional imbalances: Branch banking encourages regional imbalances. The financial resources of economically backward areas tend to get transferred to industrial and business centres. Due to which backward areas continue to be neglected and remain over backward.

The Disadvantages of Traditional Banking

The following points highlight the six main systems of banking. The systems are: 1. Unit Banking 2. Branch Banking 3. Group Banking 4. Chain Banking 5.

The information you have posted is very useful. The sites you have referred was good. Thanks for sharing When it comes to branches and how banks operate, I think one should also know other type of banking called the unit banking. I was surfing the Internet for information and came across your blog.

branch banking advantages and disadvantages pdf

Large Size: As it is big in size, it gets all the advantages of large type of institution. Adequacy of capital: its capital is adequate because it's big. Adequacy of Deposits: it deals its business in countrywide or in abroad, so it can collect adequate deposit.


Mobile banking

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Under the branch banking system a number of difficulties as regards management, supervision and control arise:. 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.

Traditional banking, where customers visit brick-and-mortar branches to conduct business, has its uses. But unlike online and mobile banking, physical bank branches are only available for limited hours and can become crowded, making it time-consuming to conduct even basic transactions. Online and mobile banking provide easy access and flexibility. And while some people might think that traditional banks are safer than online banking, the fact is that even traditional banks store your data in large data centers that can be vulnerable to hackers. Traditional banking lags behind online services in terms of accessibility, flexibility, affordability and — at times — security.

Disadvantages of Branch Banking

Branch Banking: Introduction, Advantages and Disadvantages

Branch banking refers to that banking system in which two or more banking offices are operated under single ownership and management as a single institution. Thus, the business is operated by the head office through a network of branches spread in different parts of the world. In this system, every bank has legal entity with one group of share holdersand one group of Board of Directors. Banking system in India and England fall in this category. Advantages of Branch Banking. In view of its size.

Branch Bank is a type of banking system under which the banking operations are carried with the help of branch network and the branches are controlled by the Head Office of the bank through their zonal or regional offices. Each branch of a bank will be managed by a responsible person called branch manager who will be assisted by the officers, clerks and sub-staff. In England and India, this type of branch banking system is in practice. Thus branch banking is a system in which a bank renders its banking activities at two or more places. Head office has the overall control over the working of various branches. Economies of Large Scale operations: Branch banking enjoys the advantages and economies of large scale operations.

Banks offering mobile access mainly … Adequacy of Deposits: it deals its business in countrywide or in abroad, so it can collect adequate deposit. There are not many disadvantages to branch banking. For people who are planning to go with mobile banking, here are few advantages and disadvantages to keep in mind. Disadvantages of Internet e-Banking. These are as follows: 1. Security issues Internet banking is completely insecure as there are many problems related to the website and data can be hacked by the hackers.

branch banking advantages and disadvantages

Mobile banking is a service provided by a bank or other financial institution that allows its customers to conduct financial transactions remotely using a mobile device such as a smartphone or tablet. Unlike the related internet banking it uses software, usually called an app , provided by the financial institution for the purpose. Mobile banking is usually available on a hour basis. Some financial institutions have restrictions on which accounts may be accessed through mobile banking, as well as a limit on the amount that can be transacted. Mobile banking is dependent on the availability of an internet or data connection to the mobile device. Transactions through mobile banking depend on the features of the mobile banking app provided and typically includes obtaining account balances and lists of latest transactions, electronic bill payments , remote check deposits, P2P payments , and funds transfers between a customer's or another's accounts.

Advantages and disadvantages of branch Bank. Disadvantages of Branch Bank The advantages of branch banks are as follows: Large Size: As it is big in size, it gets all the advantages of large type of institution. Adequacy of Deposits: it deals its business in countrywide or in abroad, so it can collect adequate deposit. Large Scale credit: A branch bank can grand a large scale credit to its clients.

Branch Banking – Advantages , Disadvantages

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4 Comments

  1. Noelle P.

    13.12.2020 at 20:00
    Reply

    the main office and to the larger branches. In communities too small to support a full-scale bank, a branch may be little more than a "teller's.

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  4. Georgina R.

    19.12.2020 at 16:29
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    Economies of Large Scale operations: Branch banking enjoys the advantages and economies of large scale operations. Economy of Cash Reserves: Under branch banking system a particular branch can operate without keeping large amounts of reserves.

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