Branch Banking


DEFINITION of 'Branch Banking'

Engaging in banking activities such as accepting deposits or making loans at facilities away from a bank's home office. Branch banking has gone through significant changes since the 1980s in response to a more competitive nationwide financial services market. Financial innovation such as internet banking will greatly influence the future of branch banking by potentially reducing the need to maintain extensive branch networks to service consumers.

BREAKING DOWN 'Branch Banking'

The Riegle-Neal Interstate Banking & Branching Efficiency Act of 1994 authorized well-capitalized banks to acquire branch offices, or open new ones, anywhere in the United States outside their home states after June 1, 1997. Most states passed laws enabling interstate branching prior to that date. Branch banking networks are gradually evolving into multistate financial services networks where depositors can access their accounts from any banking office.

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