What Are The Advantages Of Unit Banking?
i) Local interest: The unit bank serves the locality much better than the branch bank. It is because the management board of the unit bank can take up the decision on the spot itself. The local officers, who are permanent officers, can take necessary action without waiting for information from the head office. ii) Convenience of management, supervision and control: The size of the bank is very small, its management, supervision and control are very easy. Along with this, wastage and delay, which are inherent weakness of branch banking, can be overcome in unit banking iii) Check on the formation of monopolies: There is a bank for each locality. In this system, there is scope for competition only. Hence, there is no possibility of the growth of monopolies. iv) Quick banking services: The services in unit banking are always quick, because the unit bank need not wait for directions from the central office. There is no delay in taking any decision regarding banking problems. v) Initiative in business: The responsibility of development of banking lies with the bank itself. Therefore, the bank officer takes personal initiative on improving the business of the bank. Since the officers are well acquainted with the local problems, they can take the initiative in solving problems and taking decisions on various issues confronting the bank. This makes the banking system more elastic than what it is under the branch banking system. vi) Upholding the local interest: The unit banks, in principle, are interested in upholding the local interest. The unit banks are mainly interested in the development of industries and agriculture keeping in view the local requirements. vii) Other advantages: Since the unit banks are small when compared to the branch bank, any loss does not cause serious havoc to the credit structure of the country. Since the affairs of the banks are less scattered, there cannot be much of fraud and irregularities. Unit banking is free from diseconomies of large scale operations which are generally associated with branch banking.
