Features of Banking :
The following are the basic characteristics to capture the essential features of Banking:
(i) Dealing in money: The banks accept deposits from the public and advance the same as loans to the needy people. The deposits may be of different types – current, fixed, savings, etc. accounts. The deposits are accepted on various terms and conditions.
(ii) Deposits must be withdrawable: The deposits (other than fixed deposits) made by the public can be withdrawable by cheques, draft or otherwise, i.e., the bank issue and pay cheques. The deposits are usually withdrawable on demand.
(iii) Dealing with credit: The banks are the institutions that can create credit i.e., creation of additional money for lending. Thus, “creation of credit” is the unique feature of banking.
(iv) Commercial in nature: Since all the banking functions are carried on with the aim of making profit, it is regarded as a commercial institution.
(v) Nature of agent: Besides the basic function of accepting deposits and lending money as loans, bank possesses the character of an agent because of its various agency services.