Branch Banking: Branch Bank is a type of banking system under which the banking operations are carried with the help of branch network and the branches are controlled by the Head Office of the bank through their zonal or regional offices. Each branch of a bank will be managed by a responsible person called branch manager who will be assisted by the officers, clerks and sub-staff. In England and India, this type of branch banking system is in practice. In India, State Bank of India (SBI) is the biggest public sector bank with a very wide network of 16000 branches.

Advantages of Branch Banking:

1. Benefits of large Scale Production: Due to large scale production, the cost per unit of operation is very low in case of this system.

2. Distribution of Risks: There is a distribution of risks because the losses incurred by one branch are made up by the profits earned by other branches.

3. Effective Central Bank control: Due to presence of few big banks in the banking system, the RBI can effectively and easily regulate the activities of banks.

4. Public Confidence: Branch banking system gains greater public confidence because of its large scale operations and huge financial resources.

5. Easy transfer of funds: Since the branches of bank under branch banking are spread all over the country, it is easier and cheaper, for it to transfer funds from one place to another.

Disadvantages of Branch Banking:

1. Problems of Management: The effective management and control of bank under branch banking system is difficult due to large network of branches.

2. Delay in Decision Making: Decision making is delayed because the branch manager has to consult with the head office before taking decision.

3. Ignorance of local heads: Branches follows the policies framed by the head office. The head office and the branch may not be aware of the local conditions.

4. Monopolistic tendencies: Branch banking encourages monopolistic tendencies. A few big banks can dominate and control the whole banking system.

5. Regional imbalances: Under branch banking system the financial resources collected in smaller and backward regions are transferred to the bigger industrial centre. This encourages regional imbalances in the country.