Meaning of Unit banking

The banking system in different countries varies substantially from one another. Broadly speaking, however, there are two important types of banking systems, viz., unit banking and branch banking.

‘Unit banking’ means a system of banking under which banking services are provided by a single banking organization. Such a bank has a single office or place of work. It has its own governing body or board of directors. 

‘Unit banking’ functions independently and is not controlled by any other individual, firm or body corporate. It also does not control any other bank. Such banks can become member of the clearing house and also of the Banker’s Association. Unit banking system originated and grew in the U.S.A. Different unit banks in the U.S.A. are linked with each other and with other financial centers in the country through “correspondent banks.”