Business services are those connected to banking, transport, warehousing, insurance, and communication that help businesses run smoothly. They have key characteristics of being intangible, inconsistent, having no inventory, and requiring customer involvement. Common types of business services include banking, insurance, and postal/telecom services. Banking services include deposit accounts, loans, drafts, ATMs, and e-banking. Insurance is a contract where the insurer agrees to compensate the insured for losses from uncertain events in exchange for premium payments.

1. BUSINESS
SERVICES
Presented by:-
Kartikeya Sodhani
Harsh Dhoot

2. What are Business Services?
Business services are those which are connected with Banking,
Transport, Warehousing, Insurance, Communication etc. and are
helpful for the smooth running of the businesses.
Providing financial services by the banks to the customers, deliver
goods by a retail store, Provide knowledge about the product to the
customers are the best examples of business services.
The service sector is growing very fast in the Indian economy than in
agriculture and industry. The role of service sector has resulted in
growth in Indian economy in recent years.

3. The 5 I’s
● Intangible :- An individual can only experience the services.
These services cannot be seen or touched by individuals
that’s why these are called intangible.
● Inconsistent (lack of homogeneity):- Services are different
according to the expectations of the customers. These
services are also different in different sectors. For example
public sector services and private sector services.
● Inventory:- Services are not stored like goods or materials.
These have to be consumed at the time of their production
otherwise it will be a total loss. For example cinema tickets, bus
tickets etc.

4. • Inseparability:- Services cannot be separated from the
service provider. In this case, the service provider gives
services to its customers at the same time and place means,
they are consumed and produced at one place only.
• Involvement of customer:- Customers are necessary to avail
the services given by the service provider. example, the
communication sector or telecom sector provide services but
to use these services customer has to receive the call ,If
customers will not take interest in the service then this sector
can suffer loss. So customers are the roots of every business
without customer involvement no business can survive.

6. SERVICES
● Services are intangible
● They can’t be separated from
providers
● Difficult to maintain quality
● No requirement to maintain
inventory
● Heterogeneous
GOODS
● Goods are tangible
● They can be separated from
providers
● Quality is same
● Required to maintain
inventory
● Homogeneous

7. Different types of services
Business services: These services are used by business organisations to run their
business activities more smoothly. For example:- Banking, Insurance,
Transportation, Telecom Industry etc.
Social services: Social services are carried voluntarily to achieve the social goals to
improve the standard of living of the weaker section of the society. For example
Education sectors, Health sectors etc.
Personal services: These services are different according to the different service
providers because these are given as per the demand and preferences of the
customers. For example:- Restaurants, Salons, Tourism etc.

8. Various categories of business services
● Banking
● Insurance
● Postal and telecom services

10. A bank is an institution which attracts money on deposit
for the purpose of being lent to industry or trade. A bank
lends what it borrows from others. A bank is buyer and
seller of money and earns a margin of profit by lending
money which it borrows.
According to Indian banking regulation act 1949,
banking means:
“Accepting deposits of money from public for the purpose of
lending or investments.”

11. Various types of accounts:-
● Savings deposit account:- A person can open a savings deposit account by depositing a small sum
of money. He can withdraw money from his account when ever needed and can deposit
whenever surplus is available. Depositor is issued a cheque book and passbook, all the amounts
deposited and withdrawn by depositor are recorded in the passbook. Rate of interest of savings
deposit accounts is the lowest.
● Current deposit account:- These are opened by businessmen, the account holder can deposit and
withdraw money whenever desired. Withdrawals are always made by cheque.Overdraft and
credit limit facilities are available in this account. There is no interest payable in this type of
account rather some service charges are charged from the bank for rendering services.

12. ● Recurring deposit account:- A depositor can deposit a fixed amount every month for a
fixed period of time. The amount together with interest is repaid on maturity. the
rate of interest on recurring deposit account is higher than that on savings account.
● Fixed deposit account :- In this type of account first we deposit a fixed amount which
is repayable after the expiry of a specific period of time. The period may vary from 6
months to 5 years. longer the period, the higher the rate of interest . The rate of
interest in this type of account is the highest.

13. Important services provided by bank
● Bank draft:- This is a cheque drawn by one bank against funds deposited into its
account at another bank, authorising the second Bank to make payment to the
individual whose name is written on the draft. A bank draft can be obtained from
a bank after depositing the required amount in the bank. The bank also charges
some commission for issuing a bank draft.
● Banker’s cheque:- This is a document which instructs a bank to pay a certain sum
to a third party. The commission charged on cheque is less than that on a bank
draft.

14. ● Overdraft:- it is a facility offered to a customer having current account..
Under this arrangement he is allowed to withdraw more than the balance in
his account. He can overdraw upto a specific limit and for an agreed period
of time. Interest is charged on amount virtually overdrawn.
● Loan:- A loan is a lump sum advance repayable on expiry of a specific period.
The loan may be paid back by the borrower in installment. Interest is charged
according to the time period.

15. E-banking:- it is a system of making online payment
without involvement of physical transfer of money. The money
is transferred from one a/c to other a/c through internet.
Benefits to customers:-
● Convenience
● Financial discipline
● 24x7 services
● Unlimited access
● Less risk
Benefits to banks:-
● Unlimited network
● Reduced loads on branches
● Competitive advantage

16. Different methods of using e-banking
services
● Debit cards:- It is a facility offered to account holders to make payment up to the amount of
credit balance in their account.
● Credit card:- Credit card is like a bank account without having balance in it. It enables the card
holders to have overdraft facility up to a fixed limit depending upon the creditworthiness of the
party.
● Automatic teller machine (ATM):-The person who makes payments and except deposit in a bank
is known as teller. The ATM refers to mechanical and automatic teller which can do a teller’s job
24 hours a day at less than half the cost of human tellers.

17. ● NEFT(national electronic fund transfer):- Under this the fund is directly transfered from one account
to another. Direct transfer helps both the parties from inconvenience of drawing cheques,
depositing cheques etc. In this the payment transaction is subjected to a waiting period and on
expiry of that the transaction is completed i.e. money is transferred.
It is on net settlement basis. There is no minimum transaction value in NEFT.
● RTGS(real time gross settlement):- RTGS are funds transfer system where transfer of money or
security takes place from one bank to another on the spot i.e. the payment transaction is not
subjected to any waiting period.
It is on gross settlement basis. The minimum transaction value for RTGS is 200000.
Features of RTGS:-
● Controlled by RBI
● Payment is final and irrevocable
● Suited for high value transaction

19. Insurance is a contract between the insurer and insured in
which insurer agrees to compensate the insured on happening of an
uncertain event in consideration of a regular payment known as
premium
Important terms:-
● Insurer:- the individual or firm who agrees to compensate for the loss of
the insured.
● Insured:-the individual or firm who gets compensation of loss. Insured
pays a regular amount known as premium
● Happening of an event:- It refers to the subject matter of the policy or the
kinds of losses covered under the policy. Eg: fire insurance etc.
● Premium:- it refers to an amount paid quarterly, half yearly or annually
by the insured to insurer for getting compensation at the time of loss

20. Principles of Insurance
● Principle of Utmost Good Faith:- According to this principal insurance is a contract
based on faith, the insured and insurer must disclose all the material facts to each
other and both the party should not hide any fact related to insurance policy. If the
insured hides any detail related to insurance policy the insurer can deny for
compensation at the time of loss.
● Principle of insurable interest:- According to this principle, there should be insurable
interest of insured also in the insurance policy i.e. it should do him some financial
benefit. Without interest taking an insurance policy is a gamble and fraudulent activity
and law does not permit it.
● Principle of Indemnity:- According to this principle, insurance is not a contract of
making profit. The purpose of insurance is to bring back the insured in same financial
position as he was before the loss.

21. ● Principle of contribution:- According to this principle, if a person has taken more than one
insurance policy for the same subject matter then all the insurers will contribute the amount of
loss and compensate him for the actual amount of loss. He cannot claim loss from each insurer
separately.
The formula used to determine the compensation from a particular insurer is:
Sum assured with a particular insurer x Actual loss
Total sum insured
● Principle of Subrogation- According to this principle, when the insured is compensated for the
loss or damage to the property insured by her/ him, the right of ownership of such property
passes on to the insurer.
● Principle of Causa Proxima:- According to this principle, the cause or reason for the loss must be
related to the subject matter of the insurance contract. If the loss is due to some other cause
then the insurer can deny to pay the compensation.
● Principle of mitigation :- According to this principle, the insured must take care of its property
or subject matter of insurance in the same way as he would take care without taking the
insurance policy.

23. Insurance:-
● In contract of insurance the insured
must suffer a damage or loss, to claim
the compensation.
● The term insurance is used when risk
is uncertain, it may or may not happen.
● In Insurance the compensation is paid
only on happening of an event.
● For example:-Fire insurance, Marine
insurance
Assurance :-
● In contract of Assurance the sum
assured is bound to be paid whether
insured suffers a loss or not.
● The term Assurance is used when risk
a certain and it is bound to happen.
● In assurance compensation is paid
whether the event happens or not.
● For example:- Life Insurance

25. Life Insurance:-
In life insurance the sum assured is bound to be paid at the
death or on maturity period whichever comes earlier. If a
person dies early his family gets compensation amount and if a
person survives than he himself can get the policy amount.
The principles of indemnity, contribution and subrogation are
not applicable to life insurance policy.

26. Fire Insurance:-
Fire insurance is a type of general insurance policy where the
insurer helps in paying off for any damage that is caused to the
insured by an accidental fire till the specified period of time, as
mentioned in the insurance policy.
The claim for a fire loss must satisfy the following conditions:
● It should be an actual loss.
● The fire must be accidental and not done intentionally.

27. Marine Insurance:-
Marine insurance is a contract between the insured(Generally a ship
owner) and the insurer. In marine insurance, the protection is provided
against the perils of the sea.
The perils of the sea Include:-
● Storm
● Collision
● Capture by pirates
● Cyclone
● Sinking of ships etc.

28. Health insurance:-
Health insurance provides for payment of medical expenses in case of illness
of the insured person and his family. It provides the following types of
coverage:-
● Basic medical expenses: It covers the expenses of hospitalisation and doctor's
services.
● Major medical expenses: It covers the cost of catastrophic (sudden disaster)
illness.
● Long term hospitalisation: It covers Nursing Home charges for elderly people.
● Disability income: It replaces the income lost by the ensured while the insured is
unable to work.

30. Communication refers to exchange of Idea,
message between two or more persons. Mainly there
are two types of communication services:-
1. Postal Services.
2. Telecom Services.

32. Features of Postal Services :-
1. All Postal Services are controlled by government.
2. The Postal department provides services at National as well as International levels.
3. Along with Postal Services nowadays various financial services are also offered by
the Postal department.
4. Post offices have also started Speed Post services to compete with courier services.
5. Post offices also provide an important service of telegraphic communication.
6. Postal Services are Highly reliable.

33. Drawbacks of Postal Services are : -
1. Slow in speed.
2. Bureaucratic in nature.
Courier services:-
Due to Slow speed and bureaucratic nature businessmen rely on private Postal
Services called courier services. These courier services provide desk to desk service
,that is, they pick up parcels from the office of the sender and deliver at the office of
the receiver these are very fast and highly reliable.

34. Facilities provided by postal department:-
● Financial facilities:- Various Saving Scheme are offered by post office such as
public provident fund, Kisan Vikas Patra and national saving certificate,
monthly income schemes,saving account, Time deposits and money order
facility.
● Mail services:- These consist of transmission of articles from one place to
another along with normal transfer registration facility they provide
security of transmitted articles and insurance facility that covers all risks in
the course of Transmission by post.

35. Different types of mail services:-
1. UPC (Under Postal certificate):- In UPC the sender will deliver the parcel or
letter with ordinary post at specified counter of post office at extra ordinal
cost and have proof of posted letters.
2. Registered post:- Sender fixes more postal stamps on envelope and delivers
at the counter of post office and obtains receipt then the postal authorities
will deliver that parcel or letter to address only.
3. Parcel post:- It is a service of Postal dept for sending parcels through the
post across the country as well as outside the country this is the most
economical way of sending the parcels.

36. 4. Speed post:- It is a service to send the mail as fast as possible, in this the
post office provides time bound delivery of mail, letter and other documents
the charges of speed post are higher than ordinary mail.
5. Courier services:- Courier service is provided by private post offices for
providing desk to desk services they are faster and more reliable this
service is comparatively cheaper than service is provided by post offices.

38. Telecom servicesare the backbone of every business
activity. In the absence of telecom services, every business
activity will remain as a dream only. There are lots of
developments in convergence of Telecom, IT, electronic and
media industry worldwide.

39. Various types of telecom services:-
1. Cellular mobile services:-It includes all mobile telecom services including voice, non voice ,
messages ,data service and PCO etc. They can provide direct interconnectivity with any other
type of Telecom service provider.
2. Radio paging services:- It is an affordable means of communication it transmits information to
persons even when they are mobile it is a way of information broadcasting solution. Radio
paging services are available including tone only, numeric only and alphanumeric paging.
3. Fixed line services:- These are primarily connected through fibre optic cables laid across the
country. They provide interconnectivity with other types of telecom services.
4. Cable services:- These are linkage and switched services within licenced area of operation to
provide entertainment services. It includes two way communication voice data and information
services. Offering services through the cable network would be similar to providing fixed
services.

40. 5. VSAT (Very Small Aperture Terminal):- VSAT is a satellite based communication
service. It offers business and government Agencies a highly flexible and reliable
communication solution in urban as well as rural areas. It offers reliable and
uninterrupted services. It can be used to provide newspaper, online ,market rates and
Telly education even in most remote areas of our country.
6. DTH services (Direct to home):- It is a direct satellite based media service provided
by cellular companies to receive the service one needs a small antenna and the setup
box. The service is provided by DTH service providers and consists of bouquet of
multiple channels. these channels can be viewed on television without being
dependent on cable network service provider.