Mention the Basic Characteristics/ Features of Banking

The following are the basic characteristics to capture the essential features of Banking:

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.

Deposits must be withdraw-able:  

The deposits (other than fixed deposits) made by the public can be withdraw-able by cheques, draft or otherwise, i.e., the bank issue and pay cheques. The deposits are usually withdraw-able on demand.

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.

Commercial in nature: 

Since all the banking functions are carried on with the aim of making profit, it is regarded as a commercial institution.

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.