Difference Between Unit Banking And Branch Banking
The main differences between unit banking system and branch banking system can be pointed out as follows:
1. Meaning
Unit Banking: Banking system which provides services in a specific area by a single branch
Branch Banking: Banking system which provides banking facilities in different part of the country through different branches
2. Stability
Unit Banking: Less stable in nature
Branch Banking: More stable than unit banking
3. Independence
Unit Banking: It can be operated more independently than branch banking
Branch Banking: It is fully controlled by the head office. So, it enjoys less independence than unit banking
4. Operational Cost
Unit Banking: It requires less operational and supervision cost
Branch Banking: It needs more operational and supervision costs than unit banking.
5. Resources
Unit Banking: Limited resources
Branch Banking: More resources
6. Decision Making
Unit Banking: Prompt decision making is possible
Branch Banking: Decision making process is slow because branch cannot take decisions independently without consulting the head office.
7. Competition
Unit Banking: Less Competition
Branch Banking: High competition
8. Specialization
Unit Banking: It lacks specialization because of limited resources and less trained employees
Branch Banking: Because of huge financial resources and highly trained employees, specialization is possible.
9. Interest Rate
Unit Banking: Not uniformed
Branch Banking: Uniformed
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10. Mismanagement
Unit Banking: Less chance of mismanagement
Branch Banking: Very high chance of mismanagement
11. Working Area
Unit Banking: Limited area
Branch Banking: Expanded area
Unit Banking Vs Branch Banking (Comparison Chart)
I hope this post is helpful to understand the difference between unit banking and branch banking and to make comparison between them.
Unit Banking Vs Branch Banking (Comparison Chart)
Basis For Difference
|
Unit Banking
|
Branch Banking
|
Introduction
|
Banking facilities provided by a single branch in limited area
|
Banking services provided by different branches in different parts
|
Stability
|
Less
|
More
|
Cost Of Operation
|
Less
|
More
|
Resources
|
Limited
|
More
|
Quick Decisions
|
Possible
|
Not possible
|
Competition
|
Less
|
High
|
Specialization
|
No
|
Yes
|
Uniform Interest Rate
|
No
|
Yes
|
Mismanagement
|
Less chance
|
High chance
|
Working Area
|
Limited
|
Wider
|
Independence
|
More
|
Less
|
