Non-Banking Activities Services Offered Past Times Banks

Non-Banking Activities

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

A banking concern cannot endure 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 furnish factoring services to their clients.
4. They cope mutual funds in addition to minimize investment risks.
5. They termination gift cheques to the people.
6. They deport feasibility study in addition to submit the feasibility report.
7. They facilitate the part transactions yesteryear maintaining demat accounts.
8. They offering credit in addition to 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 furnish funds (capital) for starting novel ventures.

Now let's hash out 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, telephone 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 modest (nominal) fee for making these payments.

2. Merchant Banking

Large banks perform merchant banking for their customers. They assistance them to heighten finance. They give them advice well-nigh starting in addition to running a business. They assistance their customers to brand a net inwards the stock exchange. They fifty-fifty practice projection management. They too assistance inwards expanding in addition to modernizing the concern of their clients. Today, banks assistance to revive (cure) sick industries. They too assistance inwards restructuring the business.

3. Factoring Services

Banks too furnish factoring services to their clients. Factoring is an understanding betwixt a banking concern (factor) in addition to a concern theatre (client). Under this agreement, the concern theatre sells goods in addition to services to their customers on credit. The banking concern (factor) purchases the customers' Bills Receivable or debtors concern human relationship from the concern firm. So, the 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

Mutual funds are real pop because of expansion in addition to diversification of the fiscal sector. The Unit Trust of Republic of Republic of India (UTI) was the starting fourth dimension fiscal establishment to start mutual funds inwards India. Many other banks straightaway accept 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 in addition to liquidity. Mutual funds amongst their resources in addition to expertise invest on behalf of private investors giving them working capital alphabetic quality appreciation amongst minimum risk. Mutual funds disclose 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 rubber become for mutual funds.

5. Gift Cheques

Gift cheques are printed inwards attractive colours in addition to designs. Gift cheques are issued yesteryear banks to the public. They tin give these cheques equally a introduce on auspicious occasions similar marriage, birthdays, retirements, promotion, anniversary, etc. They are unremarkably 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 yesteryear manus delivery. These cheques accept an death date. If a gift banking concern check is lost, a duplicate is issued. These cheques are payable on demand. The payee tin claim the money at whatever branch of the issuing bank.

6. Feasibility Reports

Banks deport 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 deport feasibility study inwards functional areas such equally 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 of affairs decides whether to practice the projection / concern or not.

7. Demat Account

Demat is a commonly used lift for dematerialization. Traditionally, shares were held inwards a physical form. Under dematerialization, shares are held inwards an electronic form. Demat concern human relationship is similar coin kept inwards a savings account. You tin deposit in addition to take away the sum whenever you lot want. The transactions inwards electronic shares are quick, rubber in addition to simple. The shares purchased yesteryear a shareholder are transferred inwards his lift on the side yesteryear side 24-hour interval of payout. H5N1 shareholder tin sell in addition to 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 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 credit card facilities. Most of the banks too 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 sum gets deducted from the residuum they handgrip amongst the banks.

9. Leasing Services

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

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

10. Hire Purchase

Banks furnish hire-purchase services. They finance hire-purchase contracts. Here, the possessor of goods hires them to or in addition to hence other political party for a sure enough catamenia in addition to for the payment of a specific installment. The transfer of goods is passed on to the user subsequently a definite catamenia provided payment of all specified installments is clear.

11. Insurance

Banks are straightaway allowed to offering insurance services through carve upwardly branches. Many Indian banks such equally ICICI, IDBI, HDFC, etc., accept entered into unusual collaborations to furnish life insurance service inwards India. ICICI has joined Prudential Life, HDFC amongst Standard Life, IDBI amongst Fortis (now Federal) to furnish life insurance services to Indians.

12. Venture Capital Services

Banks similar ICICI, SBI, IDBI provides venture capital services. Here, banks furnish funds for starting novel ventures in addition to for high-risk businesses amongst high-profit potential. Venture working capital alphabetic quality helps businessmen to instruct funds for highly risky projects. Venture working capital alphabetic quality way to purchase shares inwards high-risk projects / businesses amongst high-profit potential.