Business Services Class 11 Notes Business Studies Chapter 4 - CBSE
Chapter : 4
What Are Business Services ?
Business services are intangible services that are used or required by business organisations to operate their functioning.
Types of Business Services
- Banking
- Insurance
- Communication
- Transport
- Communication
Banking
Banking involves accepting deposits (to be used for landing or investing) from the public, which are repayable on demand or otherwise and with drawable by cheque, draft, order or otherwise.
Types of Bank Accounts
- Savings Account: It is the account meant for people who wish to save a part of their income to safeguard the future and earn interest on the savings, both deposits and withdrawals are allowed.
- Current Account: It is opened by businessmen who have a number of regular transactions. Such type of
account is a no interest-bearing deposit account. - Fixed Deposit Account: It is an account in which the amount is deposited with the bank for a fixed period of time. It can range from 15 days to five years. This accounts attracts fixed interest for a stipulated time.
- Recurring Deposit Account: It is opened by those who want to save regularly by depositing specified amount of money every month. The amount deposited in this account will be paid along with interest at the end of tenure by the bank.
- Multiple Option Deposit Account: It interlinks the savings account with a fixed deposit account. In this account, any amount in excess of pre-determined amount is automatically transferred to a fixed deposit.
Banking Services
- Banker's Cheque (Pay order): Banker's cheque refers to that bank draft which is payable within the same city.
- Real Time Gross Settlement (RTGS): RTGS system is an online system for transferring funds under which transfer of money takes place from one bank to another on a real time and on gross basis.
- National Electronic Funds Transfer (NEFT): NEFT system is an online system for transferring funds in which transfer of money takes place from one bank to another on net basis.
- Bank Overdraft: It refers to a facility in which a customer is allowed to overdraw his current account upto an agreed limit.
- Cash Credits: Cash credit refers to a loan given to the borrower against his current assets like shares, stocks, bonds, etc.
Electronic Banking Or E-banking
It is a service provided by many banks, in which a customer is allowed to conduct banking transactions over the internet.
Ways of e-Banking
- Automated Teller Machine
- Credit Cards
- Debit Cards
- Internet Banking
- Mobile Banking
Digital Payments
It refers to those payments which takes place with the help of electronic medium without the use of cash or cheque.
Types of Digital Payments
- Banking Cards
- AEPS (Aadhar Enabled Payment System)
- UPI (Unified Payment Interface)
- USSD (Unstructured Supplementary Service Data)
- Mobile Wallets
- Mobile Banking
- Internet Banking
- Point of Sale Terminal
Insurance
Insurance is a form of contract between insurer and insured in which insurer agrees to indemnify the loss suffered by insured in consideration of premium.
Functions of Insurance
- Providing Certainty
- Risk Sharing
- Protection
- Assist in Capital Formation
Principles of Insurance
The contract of insurance is based on the following principles:
- Utmost Good Faith: Insurer and the insured should exhibit good faith towards each other in regard to the contract.
- Insurable Interest: The insured must have an insurable interest in the subject matter of insurances.
- Indemnity: Insured is entitled to recover the extent of the loss suffered by him, up to the limit of the amount covered by the policy.
- Proximate Cause: The insurer is liable to compensate for the loss only when such loss is proximately caused by the peril, which are stated in the policy.
- Subrogation: Insurer gets all the rights against the third party with respect to the subject-matter insured, after compensating the loss of the insured.
- Contribution: Insurer, who has paid the claim amount under an insurance policy has the right to recover the proportionate contribution from the other insurer.
- Mitigation: Insured should take reasonable steps to minimise the loss or damage to the insured property.
Life Insurance
In this contract, insurer agrees to pay a specified amount on the death of the assured or on the expiry of a certain fixed period, whichever is earlier.
Types of Life Insurance Policies
- Whole Life Policy
- Endowment Life Assurance Policy
- Annuity Policy
- Joint Life Policy
- Children's Endowment Policy
Health Insurance
In this contract, insurer agrees to provide specified health insurance at an agreed amount upon premium. It provides risk coverage against unforeseen health expenditure.
Fire Insurance
Fire Insurance is a contract whereby the insurer, in consideration of the premium paid, undertakes to compensate the insured for any loss that may result due to the occurrence of fire.
Marine Insurance
Marine insurance is a contract of insurance under which the insurer undertakes to indemnify the insured in the manner and to the extent thereby agreed against marine losses.
Postal Services
Postal services offer various facilities for sending and receiving letters, parcels, money orders, samples, etc.
Postal services include:
- Financial Facilities: Postal department provides various saving schemes, monthly income schemes, money order facility etc.
- Mail Service: It is a service that deals with the assemblage of good mails for transmission and delivery from one place to another.
- Under Postal Certificate (UPC): It is a certificate issued by the post office on payment of prescribed fee, when the sender wants to have a proof that he has actually posted the letters.
- Parcel: It is a service of a postal administration for sending articles from one place to another through the
post. - Registered Post: The post office offers registered post facility to give a proof that a mail has been posted.
- Speed Post: It is a postal service which provides for time-bound and express delivery of letters, documents and parcels across the nation and around the world.
- Courier: Courier is a private express and door to door delivery service that the employees of the service provider work with more responsibility. For ex: letter, documents, parcel, etc.
