INTERLINK BRANCH BANKING

Banking & Insurance

PREPARED BY : PRATIK SHRIMALI

WHAT IS BRANCH BANKING?

Multi-office banking, generally defined as accepting deposits or making loans at facilities away from a bank's home office. Branch banking has gone through significant changes since the 1980s as banks responded to a more competitive nationwide financial services market.

Services provided by a branch include: ● cash withdrawals and deposits from a

demand account with a bank teller, ● financial advice through a specialist, ● safe deposit box rentals, ● insurance sales (where it is allowed by

law), etc.

As of the early 21st Century, features such as automated teller machines (ATM), telephone and online banking, allow customers to bank from remote locations and after business hours.

This has caused financial institutions to reduce their branch business hours and to merge smaller branches into larger ones. Conversely, they converted some into mini-branches

TYPES OF BRANCHES:

1.Traditional or brick-and-mortar: These are typically stand alone branches of a

financial institution that often are contained in its own building.

These branches typically offer full service banking including safe deposit boxes. They may include access to a drive-through teller window

2.IN-STORE

These are typically branches located in a retail space such as a grocery or discount store. They may be full service branches or limited service branches. They generally do not include a drive-through teller windows or safe deposit boxes.

These branches have limited staff and typically include technology as a means to deliver banking services such as the use of automated teller machines, videoconferencing, and video banking systems.

3.GREEN BRANCH

A Green Branch, trademarked by The PNC Financial

Services Group, Inc., promotes environmentally friendly construction and design.

Green Branch is a federally registered trademark to denote the environmentally friendly construction and design of retail banking locations. This term was granted as a trademark by the U.S. Patent and Trademark Office on 16 January 2007 to the PNC Financial Services Group, Inc. (NYSE: PNC).[5] The basis for the federal patent office’s approval of PNC’s trademark application included the determination that financial and banking services are not generally associated with environmentally friendly or ecologically efficient characteristics.

INTERSTATE BANKING

Banking expansion across state lines through bank holding company acquisitions. Interstate expansion of commercial banking companies began in the mid-1980s when state legislatures enacted laws permitting holding company acquisitions on a reciprocal basis with other states.

Interstate banking has evolved in three distinct phases, starting in the 1980s with regional interstate banking , where banking companies within a region-the Northeast or Southeast-merged to create larger banks; regional expansion under state laws containing a national trigger permitting mergers with banks in any other state after a certain date; and nationwide interstate banking. The Riegle-Neal Interstate Banking and Branching Efficiency Act permitted well-capitalized banks to acquire banks anywhere in the United States after Oct. 1, 1995.

Most interstate banking prohibitions were repealed by the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994.[3] Some states have also had restrictive bank branch laws; for example, Illinois outlawed branches (other than the main office) until 1967, and did not allow an unlimited number until 1993

MULTI-BRANCH BANKING PHASE-II -- DENA TO INTERLINK 422 BRANCHES

Rajalakshmi Menon MUMBAI, May 2 DENA Bank Ltd hopes to complete the second phase

of its Multi-branch Banking (MBB) Programme by September this year. According to Mr. Prahlad Rao, General Manager, Dena Bank, 422 branches will be linked in the second phase.

The bank had launched multi-branch banking in February by interlinking 46 branches, including 35 in Mumbai. The bank has so far received 72 lease lines -- the mainstay of MBB.

Dena Bank has assigned Wipro Ltd the task of managing its entire network programme, said Mr. Rao. Wipro will help run the network management software to monitor and administrate the entire network. ``This network is a tool to enable us to conduct business in a better manner,'' he said.

Wipro will also provide the routers, modems and the ancillary equipment and will also manage the whole network to see that the uptime is 100 per cent, he added.

Out of Dena's 1,070 branches, 492 are computerised, accounting for 65 per cent of the bank's business, and 422 will be interlinked.

MBB is part of the bank's computerisation programme funded by the World Bank. The total cost of the network works out to Rs. 11-12 crores, said Mr. Rao. The World Bank has extended a loan of Rs. 65 crores for computerisation, training and creating infrastructure. As of March 31, 2000, the bank had drawn more than 85 per cent of the loan, he added.

Explaining the technology behind the computerisation programme of the bank, Mr. Rao said every city will have a `switch' which will interconnect the different branches in the city and all these switches are, in turn, connected to a single hub. This network will be connected through a combination of lease lines and VSATs at regional offices and branches.

The bank has outsourced software as well as developed some in-house, said Mr. Rao.

At present, the Dena has 26 ATMs and is planning to install 25 off-site ATMs shortly, he said. On Internet banking, he said the bank will launch it when the requisite platform has been prepared for the computerisation programme.

SBI plans to interlink 3000 branches:

The State Bank of India plans to interlink its 3000 branches in major cities and go online from April 1, 2003 to provide 'anytime anywhere' banking facilities to its customers, a top bank official said on Thursday.

Services like ATM, cash card, tele-banking and e-banking had already been provided and log-in facility was being offered to major corporate houses, Deputy General Manager of SBI, Himachal region, K K Saxena told reporters.

He said at present 3111 bank branches had been fully computerised in 1012 centres, accounting for 82 per cent of business.