Non-Banking Activities Services Offered Yesteryear Banks

Non-Banking Activities

All banks perform non-banking activities along amongst their traditional functions.

A banking concern cannot live on without performing the next non-banking activities:

1. Banks assist 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 together with minimize investment risks.
5. They consequence gift cheques to the people.
6. They acquit feasibility study together with submit the feasibility report.
7. They facilitate the part transactions yesteryear maintaining demat accounts.
8. They offering credit together with debit cards facility.
9. They too offering leasing services.
10. They give hire-purchase services to owners of diverse goods.
11. They are straightaway allowed to offering insurance services.
12. They render funds (capital) for starting novel ventures.

Now let's verbalise over of import non-banking activities performed yesteryear banks.

1. Utility Payments

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

2. Merchant Banking

Large banks perform merchant banking for their customers. They assist them to enhance finance. They give them advice well-nigh starting together with running a business. They assist their customers to brand a lucre inwards the stock exchange. They fifty-fifty practise projection management. They too assist inwards expanding together with modernizing the employment organization of their clients. Today, banks assist to revive (cure) sick industries. They too assist inwards restructuring the business.

3. Factoring Services

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

4. Mutual Funds

Mutual funds are real pop because of expansion together with diversification of the fiscal sector. The Unit Trust of Republic of Republic of India (UTI) was the offset fiscal establishment to start mutual funds inwards India. Many other banks straightaway bring mutual funds such equally ICICI Mutual Fund, SBI Mutual Fund, HDFC Mutual Fund, etc. Mutual Funds are controlled yesteryear SEBI. Mutual Funds are purchased yesteryear investors because they offering minimum risk, maximum render together with liquidity. Mutual funds amongst their resources together with expertise invest on behalf of private investors giving them majuscule appreciation amongst minimum risk. Mutual funds give away the NAV (Net Asset Value) of their funds daily. They too repurchase the units issued yesteryear them based on their NAV. Investors who similar to play condom larn for mutual funds.

5. Gift Cheques

Gift cheques are printed inwards attractive colours together with designs. Gift cheques are issued yesteryear banks to the public. They tin give these cheques equally a acquaint on auspicious occasions similar marriage, birthdays, retirements, promotion, anniversary, etc. They are ordinarily issued for Rs. 11, 21, 51 together with 101. The purchaser makes total payment at the fourth dimension of purchase. Gift cheques are transferable yesteryear mitt delivery. These cheques bring an give-up the ghost date. If a gift check is lost, a duplicate is issued. These cheques are payable on demand. The payee tin claim the money at whatsoever branch of the issuing bank.

6. Feasibility Reports

Banks acquit feasibility study on behalf of the client together with submit the feasibility report. This study 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 whatsoever commercial banking concern tin acquit feasibility study inwards functional areas such equally technical, managerial, fiscal together with economic. After completion of feasibility study, the banks submit a feasibility report. Based on this study the human of affairs decides whether to practise the projection / employment organization or not.

7. Demat Account

Demat is a commonly used elevate for dematerialization. Traditionally, shares were held inwards a physical form. Under dematerialization, shares are held inwards an electronic form. Demat employment organization human relationship is similar coin kept inwards a savings account. You tin deposit together with take the sum whenever y'all want. The transactions inwards electronic shares are quick, condom together with simple. The shares purchased yesteryear a shareholder are transferred inwards his elevate on the adjacent twenty-four hr menstruum of payout. H5N1 shareholder tin sell together with transfer his electronic shares from his business office / family through a broker. Most of the shares are nether demat. Banks facilitate the part transactions yesteryear maintaining demat accounts inwards their branch.

8. Credit together with Debit Cards

Most large banks offering credit carte du jour facilities. Indian credit carte du jour marketplace is growing at 30-35% per annum. ICICI, Citi, HDFC together with SBI are the leading banks that offering credit card facilities. Most of the banks too offering debit cards to their customers. With the assist of debit cards, the customers tin brand payments for the goods together with services. This sum gets deducted from the remainder they handgrip amongst the banks.

9. Leasing Services

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

1. Specialized branches must live opened for doing this work.
2. Banks may give lease finance upwards to 10% of their total advances.
3. Assets inwards leasing volition live treated equally assets carrying 100% endangerment weightage.

10. Hire Purchase

Banks render hire-purchase services. They finance hire-purchase contracts. Here, the possessor of goods hires them to to a greater extent than or less other political party for a sure as shooting menstruum together with for the payment of a specific installment. The transfer of goods is passed on to the user later a definite menstruum provided payment of all specified installments is clear.

11. Insurance

Banks are straightaway allowed to offering insurance services through split branches. Many Indian banks such equally ICICI, IDBI, HDFC, etc., bring entered into unusual collaborations to render life insurance service inwards 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 capital services. Here, banks render funds for starting novel ventures together with for high-risk businesses amongst high-profit potential. Venture majuscule helps businessmen to larn funds for highly risky projects. Venture majuscule way to purchase shares inwards high-risk projects / businesses amongst high-profit potential.