Characteristics or Features of Bank: If you walk on the streets of any town or city, you could notice signboards on buildings with names – State Bank of India, Punjab National Bank, ICICI Bank, IDBI, City Union Bank, etc. What are these names? Have you tried ever to know about them? Have you entered those buildings? If you go inside these buildings, you can find an office layout with many desks (counters) with names like May I Help You, Teller, Deposits, Loans, etc. You can also find
Features of Bank
- a) A separate room for manager;
- b) Some kinds of challans being kept in the office
- c) The employees at each counter facilitate the customers who come for their financial services needs. If you observe, some customers may be depositing money, some may be withdrawing money. Some may be discussing their financial plan for investing with the branch manager.
This office is called a ‘Bank’. Let us discuss the meaning, definition, history, and functions of the banking system, the structure of the Indian banking system, the relationship between banker and customer, cheques and their usage, and the bank’s balance sheet in this unit.
Characteristics of a Bank
Characteristics of a bank can be given as follows :
1) Dealing in Money: A Bank is a financial institution that deals with other people’s money, i.e., money given by depositors.
2) Individual / Firm / Company : A bank may be a person, firm, or company. A banking company is a company that is in the business of banking.
3) Acceptance of Deposit: A bank accepts money from the people in the form of deposits which are usually repayable on demand or after the expiry of a fixed period. It ensures the safety of its customers’ deposits. It also acts as a custodian of funds of its customers.
4) Giving Advances : A bank lends out money in the form of loans to those who require it for different purposes.
5) Payment and Withdrawal: A bank provides easy payment and withdrawal facility to its customers in the form of cheques and drafts. It also brings bank money in circulation. This money is in the form of cheques, drafts, etc.
6) Agency and Utility Services: A bank provides various banking facilities to its customers. They include general utility services and agency services.
7) Profit and Service Orientation : A bank is a profit-seeking institution with a service-oriented approach.
8) Ever-increasing Functions: Banking is an evolutionary concept. There is continuous expansion and diversification regarding a bank’s functions, services and activities.
9) Connecting Link: A bank acts as a connecting link between borrowers and lenders of money. Banks collect money from those who have surplus money and give the same to those who need money.
10)Banking Business : A bank’s main activity should be to do business in banking, which should not be a subsidiary of any other business.
11) Name Identity: A bank should always add the word “bank” to its name to enable people to know that it is a bank and that it is dealing in money.
Recommended
- HDFC Bank Saving Account
- SBI Bank Balance Enquiry
- SBI Bank Credit Card Status
- HDFC Credit Card Status
- BOI Balance Enquiry
- SBI Bank Gold Loan
- Moats and Floats
- Margin against shares in Demat account
- How to become stock broker
- Key lessons from warren Buffet’s letters to the investors
- Meaning of Banking
