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1. Less Costly
Larger banks have the resources and system to deliver low cost, broadly based services.
2. Diversification
A branch banking organization can diversify its sources and uses of funds among various users. It can direct funds into a market requiring financing.Deposits are received from the areas where lots of savings and loans are extended in those areas where funds are scarce and interest rates are high.
3. Greater efficiency
Under branch banking system, the bank with a number of branches processes huge financial resources and enjoys the benefits of large-scale operations. Highly trained and experienced staff is appointed which increases the efficiency of the management.
4. More Safer
A large banking system is generally safer. Fewer bank failures have occurred among large banks.
5. Variety of services and low transaction costs
A greater variety of services and products become available to a broader banking public. Since the bank branches are spread over the whole country, it is easier and cheaper to transfer funds from one place to another.
6. Security against the risk of failure
The branch banking is less risky and greater capacity to handle risks. The losses incurred by some branches may be offset by the profits earned by other branches.
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