Advantages Of Unit Banking Essay Example for Free

Advantages Of social unit Banking Essay1.Local DevelopmentUnit banking is local anestheticized banking. The unit bank has the specialize knowledge of the local problems and serves the requirements of the local people in a better manner than branch banking. The currency of the locality atomic number 18 utilised for the local development and ar not transferred to other areas 2.Promotes Regional sense of equilibriumUnder unit banking system, on that point is no transfer of resources from rural and backward areas to the big industrial moneymaking(prenominal) centres. This tends to reduce regional in balance. 3.Easy ManagementThe management and supervision of a unit bank is more easier and more effective than that under branch banking system. There are less chances of fraud and irregularities in the fiscal management of the unit banks. 4.Initiative in Banking BusinessUnit banks have full knowledge of and greater intricacy in the local problems. They are in a position to t ake initiative to tackle these problems by dint of financial help.5.No Monopolistic TendenciesUnit banks are generally of small size. Thus, there is no possibility of generating noncompetitive tendencies under unit banking system. 6.No Inefficient BranchesUnder unit banking system, weak and inefficient branches are automatically eliminated. No protection is provided to such banks. 7.No diseconomies of Large Scale OperationsUnit banking is free from the diseconomies and problems of large-scale operations which are generally experienced by the branch banks. 8.Easy Management and ControlUnder unit banking system, it becomes very on the loose(p) for a single office to manage and control efficiently.9.Close Management and Workers RelationshipUnder unit banking system, there prevails a close and cordial relationship between engrosser and employees. 10.Quick DecisionThe owners or the management of unit banks empennage take quick decision and prompt action in times of emergencies. 11. Use of Local ResourcesLocal financial resources are used for local development. 12.Lesser Fraud and IrregularitiesDue to the less scattered affairs of the bank, there are very little possibilities of fraud and irregularities.Disadvantages Of Unit Banking1.No. Distribution of RisksUnder unit banking, the bank operations are highly localised. Therefore, there is little possibility of distribution and diversification of risks in various areas and industries. 2.Inability to Face Crisis particular resources of the unit banks also restrict their abilityto face financial crisis. These banks are not in a position to stand a sudden rush of withdrawals. 3.No Banking Development in Backward AreasUnit banks, because of their limits resources, ratnot fall in to open uneconomic banking line of descent is smaller towns and rural area. As such, these area remain unbanked. 4.Lack of SpecializationUnit banks, because of their small size, are not able to introduce, and get advantages of, atom of l abor and specialization. Such banks cannot afford to employ highly trained and specialized staff.5.Costly Remittance of pecuniary resourceA unit bank has no branches at other place. As a result, it has to depend upon the correspondent banks for transfer of monetary resource which is very expensive. 6.Disparity in enkindle RatesSince easy and cheap movement of does not exist under the unit banking system, interest judge vary considerably at dissimilar places. 7.Local PressuresSince unit banks are highly localised in their business, local pressures and interferences generally disrupt their normal functioning. 8.Undesirable CompetitionUnit banks are independently run by different managements. This results in undesirable competition among different unit banks.9.Limited Size of OperationUnit bank business can not be operated on large scale because of its limited area. Being the small organisation, division of labour can not be applied. 10.No Economy of ReservesUnder unit banking, ba nk can not transfer its funds to any other branch. So economy in cash hold back can not be secured under this system. 11.Limited Financial ResourcesA unit bank has limited financial resources so it is not able to provide full and adequate banking facilities to the industry and trade of the area. 12.Investment of Idle FundsA unit bank having no other branches, can not utilize its idle funds in profitable ways.