Sunday, February 24, 2019
Advantages Of Unit Banking Essay
1. topical anesthetic Development whole of measurement avowing is topical anestheticized banking. The social unit bank has the specialised knowledge of the local problems and serves the requirements of the local people in a better manner than grow banking. The cash in hand of the locality atomic number 18 enforced for the local development and are non transferred to other areas 2.Promotes Regional poise downstairs unit banking system, there is no transfer of resources from uncouth and backswept areas to the big industrial commercial centres. This tends to reduce regional in balance. 3.Easy centeringThe management and supervision of a unit bank is much easier and more(prenominal) effective than that under(a) branch banking system. There are slight chances of dissembler and irregularities in the financial management of the unit banks. 4.Initiative in Banking BusinessUnit banks have full knowledge of and greater involvement in the local problems. They are in a office to take initiative to admit these problems through financial help.5.No Monopolistic TendenciesUnit banks are largely of shrimpy size. Thus, there is no possibility of generating monopolistic tendencies under unit banking system. 6.No uneconomical BranchesUnder unit banking system, weak and inefficient branches are automatically eliminated. No protection is exitd to such banks. 7.No diseconomies of Large Scale OperationsUnit banking is melt 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 easy 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 in the midst of employer and employees. 10.Quick DecisionThe owners or the management of unit banks can take ready 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.In magnate to Face CrisisLimited 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 disinclined AreasUnit banks, because of their limits resources, cannot break to open uneconomic banking business is petiteer 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, division of labor and special ization. Such banks cannot afford to employ highly trained and specialized staff.5.Costly Remittance of FundsA unit bank has no branches at other place. As a result, it has to depend upon the correspondent banks for transfer of funds which is very expensive. 6.Disparity in involution RatesSince easy and cheap movement of does not exist under the unit banking system, interest rates vary considerably at varied 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 make 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 modestysUnder unit banking, bank can not transfer its funds to any other branch. So economy in cash reserve 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.