Special features of bank accounting1st September 2022 0 By indiafreenotes
The Base for Carrying Financial Transactions
A savings account can be used to send and receive payments and it serves as a base for all transactions. Every transaction in a saving account can be done either by net banking, debit card, cheque or withdrawal slip. Financial transactions can also be carried out swiftly by using NEFT/RTGS/IMPS facilities.
A bank may be a person, firm, or company. A banking company means a company that is in the business of banking.
Dealing in Money
The bank is a financial institution which deals with other people’s money, i.e., the money given by depositors.
Acceptance of Deposit
A bank accepts money from people in deposits that 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.
A bank lends out the money in loans to those who require it for different purposes.
Agency and Utility Services
A bank provides various banking facilities to its customers. They include general utility services and agency services.
Payment and Withdrawal
A bank provides an easy payment and withdrawal facility to its customers in checks and drafts. It also brings bank money into circulation. This money is in the form of checks, drafts, etc.
Profit and Service Orientation
A bank is a profit-seeking institution with having service-oriented approach.
Functions Banking is an evolutionary concept. There is continuous expansion and diversification as regards the functions, services, and activities of a bank.
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 require money.
A bank’s main activity should be to do banking business that should not be subsidiary to any other business.
A bank should always add the word “bank” to its name to enable people to know that it is a bank and deals in money.