Business services

• Business services refer to economic activities that are intangible and involve an interaction between the service provider and the consumer
• Services provide satisfaction to wants and are essentially intangible activities
• Characteristics of services (Five I’s of services):

  • Intangible: experiential in nature, quality can only be judged by experiencing
  • Inconsistency: performed each time according to the demand and expectation of the customer
  • Inseparability: consumed when they are produced, production to consumption are inseparable
  • Inventory: little or no tangible components are required
  • Involvement: participation of the customer is required in the service delivery process
• Types of services:

  • Business services: used by business enterprises to run business smoothly, e.g., banking, insurance, transport
  • Social services: for the betterment of society, e.g., tourism, restaurants
• Banking services:

  • Types of accounts:

  1. Saving Account: can be opened with a small amount of money, most common account, cheque book & passbook issued, interest rate around 4%

  2. Current Account: opened by a businessman, regular transactions allowed, overdraft & credit facilities available, no interest paid, no passbook issued

  3. Recurring Account (R.D Account): fixed amount deposited every month for a fixed period, amount + interest repaid on maturity, higher interest than savings account

  4. Fixed Deposit A/c (F.D): repayable after a specified period, longer deposit period = higher interest, highest interest rate
• Important services provided by banks:

  • Bank Draft: drawn by one bank against funds deposited into its account at another bank
  • Banker's Cheque (Pay order): instructs a bank to pay a certain sum to a third party, payable within the town, less bank commission
  • Overdraft: current account holders allowed to overdraw their account up to a certain limit, interest charged on the overdrawn amount
  • Cash Credit: borrower allowed to withdraw up to a certain limit against security
  • Short/Medium/Long term loans
• 1. Banking (electronic functions of banks) refers to availing banking services online without physical movement of money
• Insurance services involve a contract between the insurer and insured, where the insurer agrees to compensate for losses on the happening of an event in consideration of a regular payment called premium
• Principles of insurance:

  • Utmost good faith
  • Insurable interest
  • Indemnity
  • Causa proxima
  • Subrogation
  • Contribution
  • Mitigation of loss
• Types of insurance:

  • Life Insurance
  • Fire Insurance
  • Marine Insurance
• Communication services help businesses communicate with others for the transmission of ideas and information