Characteristics / 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 wherein a lot of 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 in each counter facilitating the customers who come for their financial services need. 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, functions of banking system, structure of Indian banking system, relationship between banker and customer, cheques and its usage, balance sheet of a bank in this unit.
Characteristics of a Bank
Characteristics of a bank can be given as follows :
1) Dealing in Money : Bank is a financial institution which deals with other people’s money i.e. money given by depositors.
2) Individual / Firm / Company : A bank may be a person, firm or a company. A banking company means a company which 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 gives safety to the deposits of its customers. 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 having service oriented approach.
8) Ever increasing Functions : Banking is an evolutionary concept. There is continuous expansion and diversification as regards the functions, services and activities of a bank.
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 are in need of money.
10)Banking Business : A bank’s main activity should be to do business of banking which should not be subsidiary to 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.