Why is the establishment of new branch offices usually favored over the charter

Why is the establishment of new branch offices usually favored over the chartering of new financial forms as a vehicle for delivering financial services Discuss. ( Words) Note:- You are required to reply to at least two peer responses to this weeks discussion question. Your replies need to be substantial and constructive in nature. ( Words for both replies) Please find the peer responses below: 1- The branches are widely spread and the beneficiaries can complete their work more quickly than being concentrated in one place only and also reduce costs and burdens on financial institutions and others. 2- The chartering of a new financing corporation is normally a lengthy and expensive process requiring the completion of elaborate federal or state application forms while the branch application process is normally far simpler and less costly. Moreover with the increase in the number of failures in recent years regulatory-imposed capital requirements for new charters have increased substantially while new branch offices usually carry significantly lower capital requirements. Moreover branch offices themselves are often much less elaborate and costly to build and maintain than are the headquarters facility of a new institution where some duplicate facilities can be eliminated (for example checking processing credit analysis and records departments)

Leave a comment

Your email address will not be published.