Branch Banking Concept
Branch is considered as one of the most important channel of the bank and is generally the most preferred channel from the customer's point of view. The branch is referred to as the face of the bank since the customer can visit personally and meet and interact with the branch officials and avail the various services offered by the bank.
In reality, the branch is the sales and service channel of a bank and the branch employees are generally responsible for both sales and service of bank's products.
Sales in terms of branch banking could be of any of the bank's deposits, products, gold, retail or other investment products of other approved organizations, such as life insurance, general insurance, and mutual fund.
The most common examples of deposit products of a bank are savings bank account, current accounts, fixed deposit accounts, and recurring deposit accounts. The customers or the prospects desiring to open any of these accounts have to fill an Account Opening Form [AOF] and submit the specified documents in order to meet the Know Your Customer [KYC] guidelines issued by the Reserve Bank of India [RBI]
The examples of a bank's asset products include personal loan, home loan, car loan, and credit card. When a customer approaches the branch for any of the loan products of the bank, the branch employee takes down the contact details of the customer and the record of the lead generated are kept with the bank for follow up action. Sometimes, such leads are escalated to outsourced agencies, such as Direct Sales Agent [DSA] or Direct Marketing Agent [DMA] of the bank. These agencies, in turn, get in touch with the customers for obtaining the necessary documents. The credit decision whether to sanction or not the various loans to the customers is taken by the bank officials in the credit sanctioning department of the bank.
In most of the banks, the front office activities that involve customer interaction are handled at the branches, for instance, cash receipts and payments, issue of DD or lockers. The back office activities, such as clearing and account opening may be centralized at a different location away from the branch. Activities like clearing centralize payments of drafts and other instruments, which are related to the local area, may be grouped in to one centre. Certain other activities that are common across centres may be performed at another place for the purpose of achieving efficiency of operation and controlling costs.
Services provided at the branches
Several services are offered to customers by the bank branches. The following list only covers the main services offered by most of the branches:
- Account opening
- Cash receipts
- Cash payments
- Cheque book issue
- Stop payment of cheques
- Closure of fixed deposits and premature withdrawals
- Issue of DDs and banker's cheque
- Safe deposit lockers
- Foreign exchange services
- Gold retail
- DeMat services
- Acceptance of clearing cheques
- Deliverables, such as cheque books, debit cards, PINs and passwords
- Acceptance of queries and complaints
- Investment services
- Standing instructions
- Retail loan products
Despite the emergence of several other delivery channels external to the bank, branch banking still remains its utility. This might be due to the advantage of the location of branches enjoyed by the customer. Also, in the current state of development the alternate channels have limited service capabilities which make a branch an extremely useful service and delivery outlet. A branch is capable of handling diverse requirements of a customer in addition to projecting the human feeling arising out of the personal relationship with the branch officials.
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