From the views of above authorities, we can derive the following basic characteristics of Banking:
(i) Dealing in money:
The banks accept deposits from the public and advancing them 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(ii) Deposits must be withdrawn able:
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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 The deposits are usually withdrawn able on demand.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:
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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 functions of accepting deposits and lending money as loans, banks possess the character of an agent because of its various agency services.