Non-Banking Activities Services Offered Yesteryear Banks

Non-Banking Activities

All blogspot.com//search?q=what-is-bank-introduction-definition">banks perform non-banking activities along amongst their traditional functions.

A banking concern cannot hold out without performing the next non-banking activities:

1. Banks assistance their customers to brand utility payments amongst ease.
2. They perform merchant banking for their customers.
3. They render factoring services to their clients.
4. They create out mutual funds in addition to minimize investment risks.
5. They final result gift cheques to the people.
6. They bear feasibility study in addition to submit the feasibility report.
7. They facilitate the portion transactions past times maintaining demat accounts.
8. They offering credit in addition to debit cards facility.
9. They likewise offering leasing services.
10. They give hire-purchase services to owners of diverse goods.
11. They are immediately allowed to offering insurance services.
12. They render funds (capital) for starting novel ventures.

Now let's beak over of import non-banking activities performed past times banks.

1. Utility Payments

Banks brand utility payments for their customers. Utility payments include payment of an Electricity bill, Insurance premiums, band bill, H2O bill, etc. They likewise pay SIP (Systmatic Investment Plan) payments to Mutual funds for their customers. These payments are made past times using the Electronic Clearance Scheme (ECS). Banks accuse a small-scale (nominal) fee for making these payments.

2. Merchant Banking

Large banks perform blogspot.com//search?q=what-is-bank-introduction-definition">merchant banking for their customers. They assistance them to heighten blogspot.com//search?q=what-is-bank-introduction-definition">finance. They give them advice close starting in addition to running a blogspot.com//search?q=what-is-bank-introduction-definition">business. They assistance their customers to brand a profits inward the blogspot.com//search?q=what-is-bank-introduction-definition">stock exchange. They fifty-fifty practice projection blogspot.com//search?q=what-is-bank-introduction-definition">management. They likewise assistance inward expanding in addition to modernizing the delineate of piece of occupation concern of their clients. Today, banks assistance to revive (cure) sick industries. They likewise assistance inward restructuring the business.

3. Factoring Services

Banks likewise render factoring services to their clients. Factoring is an understanding betwixt a banking concern (factor) in addition to a delineate of piece of occupation concern theatre (client). Under this agreement, the delineate of piece of occupation concern theatre sells goods in addition to services to their customers on credit. The banking concern (factor) purchases the customers' Bills Receivable or debtors delineate of piece of occupation concern human relationship from the delineate of piece of occupation concern firm. So, the delineate of piece of occupation concern theatre is guaranteed payment for their credit sales. However, the banking concern (factor) decides whom to give credit in addition to how much credit to give.

4. Mutual Funds

blogspot.com//search?q=what-is-bank-introduction-definition">Mutual funds are real pop because of expansion in addition to diversification of the fiscal sector. The Unit Trust of Bharat (UTI) was the commencement fiscal establishment to start mutual funds inward India. Many other banks immediately accept mutual funds such every bit ICICI Mutual Fund, SBI Mutual Fund, HDFC Mutual Fund, etc. Mutual Funds are controlled past times SEBI. Mutual Funds are purchased past times investors because they offering minimum risk, maximum render in addition to liquidity. Mutual funds amongst their resources in addition to expertise invest on behalf of private investors giving them upper-case missive of the alphabet appreciation amongst minimum risk. Mutual funds lay out the NAV (Net Asset Value) of their funds daily. They likewise repurchase the units issued past times them based on their NAV. Investors who similar to play rubber become for mutual funds.

5. Gift Cheques

Gift blogspot.com//search?q=what-is-bank-introduction-definition">cheques are printed inward attractive colours in addition to designs. Gift cheques are issued past times banks to the public. They tin give these cheques every bit a introduce on auspicious occasions similar marriage, birthdays, retirements, promotion, anniversary, etc. They are commonly issued for Rs. 11, 21, 51 in addition to 101. The purchaser makes total payment at the fourth dimension of purchase. Gift cheques are transferable past times mitt delivery. These cheques accept an pop off date. If a gift banking concern check is lost, a duplicate is issued. These cheques are payable on demand. The payee tin claim the blogspot.com//search?q=what-is-bank-introduction-definition">money at whatever branch of the issuing bank.

6. Feasibility Reports

Banks bear feasibility study on behalf of the client in addition to submit the feasibility report. This written report shows chances of success of the project. Feasibility study is conducted earlier starting the projection or business. Conducting feasibility study is non compulsory, but it gives many benefits to the businessman. Banks similar IDBI or whatever commercial banking concern tin bear feasibility study inward functional areas such every bit technical, managerial, fiscal in addition to economic. After completion of feasibility study, the banks submit a feasibility report. Based on this written report the human being of affairs decides whether to practice the projection / delineate of piece of occupation concern or not.

7. Demat Account

Demat is a commonly used lift for dematerialization. Traditionally, shares were held inward a physical form. Under dematerialization, shares are held inward an electronic form. Demat delineate of piece of occupation concern human relationship is similar coin kept inward a savings account. You tin deposit in addition to take away the total whenever you lot want. The transactions inward electronic shares are quick, rubber in addition to simple. The shares purchased past times a shareholder are transferred inward his lift on the adjacent twenty-four hours of payout. H5N1 shareholder tin sell in addition to transfer his electronic shares from his business office / identify through a broker. Most of the shares are nether demat. Banks facilitate the portion transactions past times maintaining demat accounts inward their branch.

8. Credit in addition to Debit Cards

Most large banks offering credit menu facilities. Indian credit menu marketplace is growing at 30-35% per annum. ICICI, Citi, HDFC in addition to SBI are the leading banks that offering blogspot.com//search?q=what-is-bank-introduction-definition">credit card facilities. Most of the banks likewise offering debit cards to their customers. With the assistance of debit cards, the customers tin brand payments for the goods in addition to services. This total gets deducted from the residual they grip amongst the banks.

9. Leasing Services

Indian banks offering leasing services. In March 1994, RBI permitted banks to move into leasing finance provided next weather condition are fulfilled:

1. Specialized branches must live opened for doing this work.
2. Banks may give lease finance upward to 10% of their total advances.
3. Assets inward leasing volition live treated every bit assets carrying 100% peril weightage.

10. Hire Purchase

Banks render hire-purchase services. They finance hire-purchase contracts. Here, the possessor of goods hires them to roughly other political party for a for certain stream in addition to for the payment of a specific installment. The transfer of goods is passed on to the user later a definite stream provided payment of all specified installments is clear.

11. Insurance

Banks are immediately allowed to offering insurance services through split upward branches. Many Indian banks such every bit ICICI, IDBI, HDFC, etc., accept entered into unusual collaborations to render life insurance service inward India. ICICI has joined Prudential Life, HDFC amongst Standard Life, IDBI amongst Fortis (now Federal) to render life insurance services to Indians.

12. Venture Capital Services

Banks similar ICICI, SBI, IDBI provides venture blogspot.com//search?q=what-is-bank-introduction-definition">capital services. Here, banks render funds for starting novel ventures in addition to for high-risk businesses amongst high-profit potential. Venture upper-case missive of the alphabet helps businessmen to larn funds for highly risky projects. Venture upper-case missive of the alphabet agency to purchase shares inward high-risk projects / businesses amongst high-profit potential.