Q.Define 'banking' as per Section 5(b) of the Banking Regulation Act, 1949, and state the two essential elements of this definition.

The statutory definition of banking is built on two elements that must BOTH be present for an institution to legally count as a bank.

Section 5(b) of the Banking Regulation Act, 1949 defines "banking" as "the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise."

The two essential elements are:

1. Accepting deposits from the public — money must be received from the general public (not, say, only from the promoter's own family), repayable on demand or after a period.
2. For the purpose of lending or investment — the institution must use those deposits to extend credit or invest, not merely hold them idle.

An institution missing either element does not qualify as "banking" in this legal sense — for example, an entity that only lends its own capital without accepting public deposits is a lender, not a bank.

Stating only 'accepting deposits' and omitting the equally essential 'for lending or investment' clause — an institution that merely warehouses deposits without lending them is not banking under this definition.