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Advantages and disadvantages of unit bank

Advantages of Unit Banks
The advantages of unit banks are stated as follows:
1. Rapid decision: The manager can take rapid decision at the time of sanctioning loan.
2. Efficient Management: Due to small scale of operation the management of this bank is efficient.
3. More safety: As it is situated at a certain place so clients thinks it more safety.
4. Establishing Direct Relation: As it has only one office so between the owner and the workers a direct relation is established.
5. Economy: As it is controlled directly by the owner so the economy is done.
6. Freedom: The owner enjoys full freedom at the time of directing the bank.
7. Reducing risk: As the amount of capital is small the amount of risk is also small.
8. Development of the area: The development is performed of that area where the bank is established.
9. Free from competition: As it is situated at a certain place its free from competition of other banks.

Disadvantages of Unit Banks
These are the following disadvantages of unit banking-
1. Lack of solvency: As it has small amount of capital, lack of solvency is found.
2. Small in size: Because of small size the huge banking facilities can not be provided to the potential customers.
3. Problem of transfer: Due to having single office transfer of fund is a great problem.
4. Less Deposit: As the deposit is collected from the persons of a certain area the amount of deposit is less.
5. Problem in foreign exchange: it is difficult to transfer foreign remittance through this bank.
6. Little investment: It establishes by one or few person. So its investment is little.
7. Less profit: As it has no branch the profit of the bank is less or small.
8. Lack of scheduling: Its stability is less because it is not a scheduled bank by the central bank of the country.
9. Problem in distribution of risk: The risk of the bank can not be shared
10. Dissolution: As it has no legal entity and the financial ability is less, it can easily be dissolved.
Although the capital of the unit bank is limited and the financial ability is less, it can contribute to the financial development of the society.