session 2 - unit and branch banking

7/26/2019 Session 2 - Unit and Branch Banking

1/20

UNIT AND BRANCH

BANKINGSESSION 2


2/20

LEARNING OUTCOME

Understand the meaning o !nit "an#ing and "ran$h "an#ing

Understand the $hara$teristi$s o !nit "an#ing and "ran$h "an#ing

Understand the di%eren$es "et&een !nit "an#ing and "ran$h "an#ing

Ad'antages and disad'antages o "ran$h "an#ing


3/20

Unit bankingreers to a "an# that is a sing)e* !s!a))+ sma)) "an# that,ro'ides -nan$ia) ser'i$es to its )o$a) $omm!nit+. A !nit "an# is inde,eand does not ha'e an+ $onne$ting "an#s / "ran$hes / in other areas.

Branch banking reers to a "an# that is $onne$ted to one or more oth"an#s in an area or o!tside o it0 to its $!stomers* this "an# ,ro'ides a)!s!a) -nan$ia) ser'i$es "!t is "a$#ed and !)timate)+ $ontro))ed "+ a )ar-nan$ia) instit!tion.

UNIT AND BRANCH BANKING 1Meaning


4/20

BRANCH BANKING UNIT BANKING

About A "an# that is $onne$ted to oneor more other "an#s in an areaor o!tside o it. ro'ides a)) the!s!a) -nan$ia) ser'i$es "!t is"a$#ed and !)timate)+ $ontro))ed

"+ a )arger -nan$ia) instit!tion.

Sing)e* !s!a))+ smathat ,ro'ides -nanser'i$es to its )o$a)$omm!nit+. Does nother "an# "ran$he

e)se&here.

Stability T+,i$a))+ 'er+ resi)ient* a")e to&ithstand )o$a) re$essions 3e.g.*a "ad har'est season in aarming $omm!nit+4 than#s tothe "a$#ing o other "ran$hes.

E5treme)+ ,rone to&hen )o$a) e$onomstr!gg)es.

UNIT AND BRANCH BANKING 1Chara$teristi$s


5/20


OperationalFreeo!

Less More

"oan# ana$ance#

Loans and ad'an$es are "asedon merit* irres,e$ti'e o thestat!s.

Loans and ad'an$ein6!en$ed "+ a!tho,o&er.

Financialre#ource#

Larger -nan$ia) reso!r$es inea$h "ran$h.

Larger -nan$ia) resone "ran$h

%eci#ion&!aking De)a+ in De$ision1ma#ing asthe+ ha'e to de,end on thehead o7$e.

Time is sa'ed as Dma#ing is in the sa"ran$h



6/20


Fun# 8!nds are transerred rom one"ran$h to another.Under!ti)i9ation o !nds "+ a"ran$h &o!)d )ead to regiona)im"a)an$es

8!nds are a))o$ate"ran$h and no s!other "ran$hes. D-nan$ia) $risis* !nto $)ose do&n* heregiona) im"a)an$"a)an$e gro&th

Co#t o'#uper$i#ion

High Less

Concentration o'po(er in thehan o' 'e(

people

:es No



7/20



Speciali#ation Di'ision o )a"o!r is ,ossi")e andhen$e s,e$ia)isation ,ossi")e

S,e$ia)isation not ,d!e to )a$# o trainand #no&)edge

Co!petition High $om,etiton &ith the"ran$hes

Less $om,etition &"an#

)ro*t# Shared "+ the "an# &ith its"ran$hes

Used or the de'e)othe "an#

Speciali#ekno(lege o'the localborro(er#

Not ,ossi")e and hen$e "adde"its are high

ossi")e and )ess ride"ts


8/20



%i#tribution o'Capital

ro,er distri"!tion o $a,ita) and,o&er.

No ,ro,er distri"!t$a,ita) and ,o&er

Rate o' intere#t Rate o interest is !niormed ands,e$i-ed "+ the head o7$e or

"ased on instr!$tions rom RBI

Rate o interest is n!niormed as the "

o&n ,o)i$ies and ra

%epo#it# ana##et#

De,osits and assets aredi'ersi-ed*s$attered and hen$eris# is s,ead at 'ario!s ,)a$es

De,osits and assetdi'ersi-ed and are ,)a$e*hen$e ris# is s,read


9/20

AD;ANTAGES O8 BRANCH BANKING

Reuce the )opulation )er Branch Ratio

Bran$h "an#ing red!$es the ,o,!)ation ,er "ran$h ratio. Thereore* the more"ran$hes a "an# has means the more $a,a"i)it+ it has to ,ro'ide "an#ingser'i$es to the ,!")i$

U#e the Bank+# Re#ource# ,ore -.ecti$ely

I "ran$h "an#ing &as not ,ermitted* a "an# &o!)d ha'e to o,en ne& "an#s t,enetrate ne& mar#ets. This &o!)d in'o)'e enormo!s and o'er)a,,ingreso!r$es.


10/20

%i$er#i'y the A##et# an %epo#it# o' Bank#

B+ ha'ing $!stomer "ase and geogra,hi$ di'ersi-$ation* a "an# is a")e

to ha'e a mi5ed ,orto)io o )oans and mi5ed ,orto)io o de,osits. S!$h

di'ersi-$ation o assets and de,osits $an red!$e the "an#=s ris#.

8or e5am,)e* a "an# &ith man+ "ran$hes $an s,read o!t its $redit ris#

"+ ,ro$!ring $!stomers o di%erent ,roessions* needs et$. $om,ared to a

"an# that has to o$!s on $ertain s,e$i-$ gro!,s o $!stomers on)+ d!e

to its )imitation in the n!m"er o "ran$hes and )o$ations o its o,eration



11/20

,obili/e Fun# ,ore -.ecti$ely

There are "ran$hes &hi$h $an attra$t more de,osits than gi'ing o!t

and there are "ran$hes &hi$h re$ei'e more )oan a,,)i$ations than thei

de,osits "ase $an $o'er. B+ ha'ing "ran$h "an#ing* the "ran$h net&or

o'er$ome this ,ro")em "+ mo'ing the e5$ess de,osits rom one "ran$

"ran$h &ith de,osit de-$ien$+. Ins!7$ien$+ in "ran$h net&or# &i)) res

o,,ort!nit+ $ost* i.e. )oss o $!stomers d!e to ai)!re to meet the need

)oans &hi$h in t!rn res!)ts in de-$ien$+ o de,osits.



12/20

)ro$ie Better Ser$ice#

!ate "ran$h net&or#* $!stomers need not $hange "an# or oa$$o!nt in another "an# !,on $hanging ?o" or mo'ing ho!se. Moreo'e

$!stomers need not &orr+ &hen &or#ing o!tside their areas as "an#ing a$an "e $ond!$ted an+&here.

)ro$ie Co!petiti$e -ge

A "an# &ith man+ "ran$hes has a $om,etiti'e edge o'er those &ith e"e$a!se "an# "ran$hes are ,ro-t generating $enters or "an#s. 8!rthero"!stness o a "an# is asso$iated &ith the si9e o its "ran$h net&or#. The'ident rom the a$t that the ma?orit+ o the )arge $ommer$ia) "an#s inha'e )arge "ran$h net&or#s.



13/20

DISAD;ANTAGES O8 BRANCHBANKING

The !ndamenta) eat!re o "ran$h "an#ing is that the o,erations o

"ran$hes are controlle by the hea o0ce.

There are man+ di%eren$es in terms o po(ergi'en to "ran$h managers.

These di%eren$es $an $a!se 'ario!s ,ro")ems in the management o "ran$

"an#ing.

The i!balance in po(er "et&een the "an# o7$ers at head o7$e and

those at "ran$hes a)so $ontri"!tes to !anage!ent proble!#.

The e5$e))en$e and >!a)it+ o "an#ing ser'i$es o%ered to $!stomers de,end

on the so)!tion to these ,ro")ems.


14/20

ROBLEMS O8 BRANCH BANKING

O,erationa) ,ro")em

Sta% ,ro")ems

Re)ationshi, ,ro")ems "et&een head o7$e and "ran$hes

ro")ems ,ertaining to "!siness ,romotion

ro")ems ,ertaining to "ran$hes= ,erorman$e


15/20

OERATIONAL ROBLEM

Sta.&relate )roble!# & a%e$t sta% mora)e &hi$h in t!rn in6!en$e>!a)it+ o ser'i$e de)i'ered to $!stomers. Indire$t)+* the+ a%e$t the "a,ro-ta"i)it+.

Lea'e

Sta% Shortage

@!a)it+ o Sta%

Co!puter&relate )roble!#

Com,!ter Brea#do&n and Do&ntime

Dissatisa$tion &ith E)e$troni$ Data ro$essing 3ED4 De,artment


16/20

Cu#to!er&relate )roble!#

C!stomer1re)ated ,ro")ems re'o)'e aro!nd $!stomers= dissatisa$tion &ith th

ser'i$es ,ro'ided "+ the "ran$h

$!stomers a)&a+s $om,)ain a"o!t the s)o& ser'i$e d!ring )!n$h time* ,a+ da

esti'e seasons.

$!stomers are not satis-ed as their re>!ests or a,,ea)s or e5em,tion rom

g!ide)ines* r!)es and $onditions get re?e$ted "+ the management

OERATIONAL ROBLEM


17/20

STA88 ROBLEM

A"senteeism

Moti'ation

Ine5,erien$ed sta%


18/20

RELATIONSHI ROBLEMS BET


19/20

ROBLEMS ERTAINING TO BUSINESSROMOTION

Man,o&er Shortage

Com,etition

rod!$t=s A"i)it+ to Com,ete

o)i$ies and R!)es


20/20

ROBLEMS ERTAINING TOBRANCHES= ER8ORMANCE

E'a)!ation Criteria

erorman$e Meas!rement

session 2 - unit and branch banking

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