Features of Bank
A bank is one kind of financial institution which deals with money and other monetary instruments and conducts business. Bank receives deposits from one group of people and lends it to other groups of people. By this process, the bank earns a profit.
Bank business is such kind of business that can be easily differentiated from other business. Bank maintains some specific features that make it individual than other organization. That’s why T.Hardy says, “A bank may be person or firm or a company who deals with money like other business organizations.” It has some distinctive features. Some features of banking business are discussed below:
- Organizational features
Like other business, organization bank has also its own banking organizational structure. Bank would be organized in any form- sole proprietorship, partnership, company, or government owned. It would be a cooperate bank. The banking companies are formed according to the Banking Company Act-1991.
There are mainly basic two types of banking like- branch banking and the unit banking. But there are other banking types- investment, chain, merchant, derail booking etc. So the banking may be of the above different types.
A bank is the symbol of safety for money around the world. A bank should be established in such a safe place and all kinds of securities should be kept.
- Artificial entity
When a Bank is organized in the form of the company it will have the artificial entity. In another form, it will be regulated according to the banking law.
The bank is formed and managed by both government and the private ownership. But the present condition shows that the private ownership is increasing all over the world and ours is not a different one.
A Bank must have economic solvency. Without economic solvency, a bank cannot operate its business. It basically deals with money.
- Dealer of money and loan
A bank is the dealer of money and credit. It is the main task of a bank. Money and other monetary instruments are the subject matters of the banking business.
Reliability is another feature which makes the banking system more acceptable to the depositors. Without it people do not keep money in the bank.
- Collections and withdrawals of deposits
Bank collects money from public and makes payments on demand of depositors. Except for some specialized banks, the task is not vital.
- Loan Payment
After collection of deposits, a bank gives a loan to businesses and to people. So, loan payment is another important feature of the bank.
- Agent of clients
Bank collects cheque, draft, bill etc. on behalf of the purchase and sale of stocks, the trustee and the correspondence etc. So, the agency is another feature of the bank.
- Capital formation
In every country, the bank has an important role in the formation of capital. It has created capital by collecting the deposit.
- Maintenance of privacy
Bank keeps the account of the clients secretly. It takes all necessary steps to keep their clients’ information secret.
- Providing service
Bank provides service to their valued clients and customers. It increases bank’s goodwill. There are other important features of the bank- remittance facilities, selling of travelers’ cheques, selling of credit cards, and the selling of the orders etc.
Finally, it can be said that a bank must have the above-discussed features or characteristics. No bank can be thought without those features.