Difference Between Branch Banking and Unit Banking (2024)

Operational freedomLess Operational freedom.More Operational freedom.Loans and advancesLoans and advances are based on merit, irrespective of status.Loans and advances can be influenced by authority and power.Financial resourcesLarger financial resources in each branch.Larger financial resources in one branchDecision-makingDelay in Decision-making as they have to depend on the head office.Time is saved as Decision-making is in the same branch.FundsFunds are transferred from one branch to another.Funds are allocated in one branch, and no support from other branches.Cost of supervisionHighLessMismanagementIt exists as improper use of power, and authority existProper checks are taken up. No misuse of MismanagementDifferencesBranch BankingUnit BankingSpecializationDivision of labor is possible, and hence specialization is possibleSpecialization is not possible due to a lack of trained staff and knowledgeCompetitionHigh competition with the branchesLess competition within the bankLocality, Resources, Funds, Profits
Shared by the bank with its branchesUsed for the development of the bankDeposits and assetsDeposits and assets are diversified, scattered, and hence the risk is spread at various places.Deposits and assets are not diversified and are in one place; hence the risk is not spread.