Characteristics of Banks
Characteristics / Features of a Bank
1. Dealing in Money: A bank is a financial institution which deals with other people's money i.e. money given by depositors.
2. 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.
3. Giving Advances: A bank lends out money in the form of loans to those who require it for different purposes.
4. Payment and Withdrawal: A bank provides easy payment and withdrawal facility to its customers. It also brings bank money in circulation. This money is in the form of cheques, drafts, etc.
5. Agency and Utility Services: A bank provides various banking facilities to its customers. They include general utility services and agency services.
6. Profit and Service Orientation: A bank is a profit seeking institution having service oriented approach.
7. Ever increasing Functions: Banking is an evolutionary concept. There is continuous expansion and diversification as regards the functions, services and activities of a bank.
8. 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.
9. Vital Role: The bank plays a vital role in modern business. Without banks, it would be highly difficult to conduct business activities in a smooth manner. A bank is a vital aid-to-trade.
1. Dealing in Money: A bank is a financial institution which deals with other people's money i.e. money given by depositors.
2. 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.
3. Giving Advances: A bank lends out money in the form of loans to those who require it for different purposes.
4. Payment and Withdrawal: A bank provides easy payment and withdrawal facility to its customers. It also brings bank money in circulation. This money is in the form of cheques, drafts, etc.
5. Agency and Utility Services: A bank provides various banking facilities to its customers. They include general utility services and agency services.
6. Profit and Service Orientation: A bank is a profit seeking institution having service oriented approach.
7. Ever increasing Functions: Banking is an evolutionary concept. There is continuous expansion and diversification as regards the functions, services and activities of a bank.
8. 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.
9. Vital Role: The bank plays a vital role in modern business. Without banks, it would be highly difficult to conduct business activities in a smooth manner. A bank is a vital aid-to-trade.