Question
Download Solution PDFWhich type of banking system exists in India?
Answer (Detailed Solution Below)
Option 3 : Branch banking
Detailed Solution
Download Solution PDFThe correct answer is - Branch banking
Key Points
- Branch banking
- Branch banking refers to a banking system where a single bank operates multiple branches across different locations.
- This system allows the bank to reach a larger customer base and provide services in multiple regions.
- Branch banking promotes financial inclusion by making banking services accessible to rural and remote areas.
- In India, most public and private sector banks operate under the branch banking system, including the State Bank of India (SBI), ICICI Bank, HDFC Bank, etc.
- This system helps in the efficient management of resources and risk distribution across different branches.
Additional Information
- Free banking
- Free banking is a banking system where banks are minimally regulated, and there is no central bank to control the monetary policy.
- This system was prevalent in the 19th century in some countries but is not commonly practiced today.
- Dual banking
- Dual banking refers to a system where two sets of banks operate simultaneously under different regulations, often seen in countries with both Islamic and conventional banks.
- This system allows customers to choose between different banking principles and services.
- Unit banking
- Unit banking is a banking system where a bank operates only one branch or a single office, usually seen in smaller community banks.
- This system is less common in large economies and is more prevalent in smaller towns or rural areas.