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NCERT · Class 11 · Business Studies

Chapter 4: Business Services

Practice each question, then open the answer or worked solution.

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Textbook exercises

13 questions
Q11Written answer

Identify a list of various services you use on a regular basis and identify their distinct characteristics. 

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Worked solution

Ans: The various services that we use on regular basis are:

  • Communication services 

  • Transportation services

  • Banking services 

  • Education services

  • Health care services

  • Tourism

  • Services of carpenter, plumber, electrician etc.

Service characteristics include:

  • Intangible: Because services cannot be seen or touched, they are intangible. They can only be experienced. As a result, the quality of services cannot be determined prior to their use. As a result, it becomes critical for service providers to provide services that meet the needs of the individuals involved.

  • Inseparable: Simultaneous activity of production and consumption makes the production and consumption of services seem to be inseparable. Unlike products, which are manufactured today and sold later, services must be consumed immediately once they are made accessible.

  • Inconsistent: There are no defined standards for services; they must be delivered according to the demand and expectations of service consumers at any given moment. Due to the fact that each service user has distinct interests and preferences, the type and quality of services offered varies per user.

  • Engagement: At the moment of service delivery, the involvement of both the service user and the service provider is required. In a school, for example, the instructor and the pupils are actively involved in the exchange of knowledge-transfer services.

  • Inventory: Services cannot be held in inventory and sold at a later date. They must be made available when service users request them. This is due to the fact that if services are not utilised immediately, they lose their value. Services cannot be generated in advance of sale and saved for future need; for example, a vacant seat on an aeroplane or a spare berth on a train indicate service capacity that will be lost forever.


Q12Written answer

Do a project on banking services. Approach a nearby bank and collect information about various services offered by them and also collect leaflets about salient features of different schemes. Compile and suggest what extra services you may like to propose.

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Ans: A bank is a money-handling financial entity. The Indian Banking Regulation Act of 1945 governs it. A commercial bank institution is defined as one that accepts money from the public for the purpose of lending or investing. Commercial banks are divided into two categories. Banks in both the public and private sectors.

I had approached a government-owned bank. A public bank is one in which the government owns a significant part and which operates on the premise of public good rather than profit.

The following are the services provided by the bank:

  1. Deposits: A bank's primary function is to accept public deposits. There are three different kinds of deposits:

    1. Current Account Deposit: These are deposits that can be withdrawn at any moment up to the amount of the balance.

    2. Savings Account: The main goal of this sort of account is to encourage people to save more. On deposits held in these banks, the bank pays a rate of interest. The country's central bank determines this rate of interest. There are limits on the number of withdrawals and the amount of withdrawals that can be made in a given time period

    3. Fixed Account Deposit: Because they are for a specific length of time, these deposits are also known as time deposits. The bank pays a larger rate of interest on this sort of deposit account than on a savings account.

  2. Lending Fund: The central bank uses the deposits it has gathered to make loans and advances. Overdrafts, cash credits, discounting trade bills, term loans, consumer credits, and other miscellaneous advances are all examples of this.

  3. Cheque Facility: The cheque is the most developed tool for withdrawing deposits and is a unique characteristic of banks. It is a very practical and cost-effective form of exchange. There are two sorts of checks: paper checks and electronic checks.

    1. Bearer Cheques: These cheques can be cashed right away at a bank.

    2. Crossed Checks: These checks must be deposited solely in the account of the payee.

  4. Funds Remittance: Due to the interconnectedness of branches, banks offer the ability to move funds from one location to another. On a commission basis, this is done by bank draughts, pay orders, and mail transfers.

  5. Auxiliary: Bill payment, locker facility, underwriting service, buying and selling of shares and debentures, dividend collecting, and insurance premium payment are examples of linked services.

  1. Current Account Deposit: These are deposits that can be withdrawn at any moment up to the amount of the balance.

  2. Savings Account: The main goal of this sort of account is to encourage people to save more. On deposits held in these banks, the bank pays a rate of interest. The country's central bank determines this rate of interest. There are limits on the number of withdrawals and the amount of withdrawals that can be made in a given time period

  3. Fixed Account Deposit: Because they are for a specific length of time, these deposits are also known as time deposits. The bank pays a larger rate of interest on this sort of deposit account than on a savings account.

  1. Bearer Cheques: These cheques can be cashed right away at a bank.

  2. Crossed Checks: These checks must be deposited solely in the account of the payee.

There are no other services that I want to propose which the bank should provide.


Q13Written answer

Visit a nearby bank branch in your locality and collect information about various types of account available for customers to open as per their requirement. 

In the second part of the activity match the information given in column A with the information given in Column B

S. No

Column A

Column B

1.

Multiple Option Deposit

It is a temporary pass through account held by a third party during the process of a transaction between two parties unless the transaction is completed.

2.

Savings Account 

A kind of deposit scheme introduced by different banks, where the excess amount in the savings bank account is transferred to fixed deposit account and the account holder earns more rate of interest. If the bank receives a cheque for this account and the balance is not sufficient, the amount will be transferred from fixed deposit account to savings bank account to clear the cheque. In short, it gives the account holder the interest of a term deposit with the flexibility of partial withdrawal, whereas, the remaining cash will get better interest. 

3.

Current Account

It is also called cumulative deposit scheme. Any resident, individual, association, club, institution/ agency is eligible to open this account in single/joint names. The account can be opened for any period ranging from 6 months to 120 months, in multiple of 1 month for monthly installment. The amount selected for installment at the start of the scheme is payable every month and the number of installments once fixed, cannot be changed. The rate of interest is compounded quarterly and the final amount is paid on maturity.

4.

Fixed Deposit Account

Any resident, individual, association, club, etc., is eligible for this account. It is a kind of modest credit option available to the depositor. Two free cheque books will be issued each year. Internet banking facility will be provided without any charge. Balance enquiry, NEFT, bill payment, mobile recharge, etc., are provided through mobile phones. Students can open this account with zero balance by providing the required documents.

5.

Demat Account

This account can be opened by any resident, individual, association, limited company, religious institution, educational institution, charitable institution, club, etc. Payments can be done unlimited number of times. Funds can be remitted from any part of the country to the corresponding account. Overdraft facility and Internet banking facility are available.

6.

Escrow Account

It is classified as short deposit receipt and fixed deposit receipt 

  1. Short Deposit Receipt 

  • Banks accept deposits from customers varying from 7 days to a maximum of 10 years. 

  • The period for ‘short deposits’ can vary from 7 days to 179 days. 

  • The minimum amount that can be deposited under this scheme is Rs. 5 lakh for a period of 7-14 days. 

  1. Fixed Deposit Receipt 

  • Any resident, individual, association, minor, society, club, etc., is eligible for this account.

  • The minimum FDR in metro and Urban branches is Rs. 10,000 and in rural and semiurban and for senior citizens is Rs. 5000.

  • Interest rate differs from bank to bank depending upon the tenure of the deposits and as bank changes the rate. 

  • Additional interest of 0.50% is offered to senior citizens on deposits placed for a year and above

7.

Recurring Deposit Account

  1. This account offers stress-free transactions on the shares. 

  2. An individual, Non-Resident Indian, foreign institutional investor, foreign national, corporate, trusts, clearing houses, financial institution, clearing member, mutual funds, banks and other depository account. 

  3. For opening this account, an applicant requires to fill a form, submit his/her photo along with a photocopy of Voter ID/Passport /Aadhar Card/ Driving Licence and a Demat account number will be provided to the applicant immediately after the completion of processing of the application.


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Worked solution

Ans:  Various types of accounts available: 

  • Current Account Deposit: These are deposits that can be withdrawn at any moment up to the amount of the balance.

  • Savings Account: The main goal of this sort of account is to encourage people to save more. On deposits held in these banks, the bank pays a rate of interest. The country's central bank determines this rate of interest. There are limits on the number of withdrawals and the amount of withdrawals that can be made in a given time period

  • Fixed Deposit Account: Because they are for a specific length of time, these deposits are also known as time deposits. The bank pays a larger rate of interest on this sort of deposit account than on a savings account.


Match the Columns:

S. No

Column A

Column B

1.

Multiple Option Deposit

A kind of deposit scheme introduced by different banks, where the excess amount in the savings bank account is transferred to fixed deposit account and the account holder earns more rate of interest. If the bank receives a cheque for this account and the balance is not sufficient, the amount will be transferred from fixed deposit account to savings bank account to clear the cheque. In short, it gives the account holder the interest of a term deposit with the flexibility of partial withdrawal, whereas, the remaining cash will get better interest. 

2.

Savings Account 

Any resident, individual, association, club, etc., is eligible for this account. It is a kind of modest credit option available to the depositor. Two free cheque books will be issued each year. Internet banking facility will be provided without any charge. Balance enquiry, NEFT, bill payment, mobile recharge, etc., are provided through mobile phones. Students can open this account with zero balance by providing the required documents.

3.

Current Account

This account can be opened by any resident, individual, association, limited company, religious institution, educational institution, charitable institution, club, etc. Payments can be done unlimited number of times. Funds can be remitted from any part of the country to the corresponding account. Overdraft facility and Internet banking facility are available.

4.

Fixed Deposit Account

It is classified as short deposit receipt and fixed deposit receipt 

  1. Short Deposit Receipt 

  • Banks accept deposits from customers varying from 7 days to a maximum of 10 years. 

  • The period for ‘short deposits’ can vary from 7 days to 179 days. 

  • The minimum amount that can be deposited under this scheme is Rs. 5 lakh for a period of 7-14 days. 

  1. Fixed Deposit Receipt 

  • Any resident, individual, association, minor, society, club, etc., is eligible for this account.

  • The minimum FDR in metro and Urban branches is Rs. 10,000 and in rural and semiurban and for senior citizens is Rs. 5000.

  • Interest rate differs from bank to bank depending upon the tenure of the deposits and as bank changes the rate. 

  • Additional interest of 0.50% is offered to senior citizens on deposits placed for a year and above

5.

Demat Account

  1. This account offers stress-free transactions on the shares. 

  2. An individual, Non-Resident Indian, foreign institutional investor, foreign national, corporate, trusts, clearing houses, financial institution, clearing member, mutual funds, banks and other depository account. 

  3. For opening this account, an applicant requires to fill a form, submit his/her photo along with a photocopy of Voter ID/Passport /Aadhar Card/ Driving Licence and a Demat account number will be provided to the applicant immediately after the completion of processing of the application


6.

Escrow Account

It is a temporary pass through account held by a third party during the process of a transaction between two parties unless the transaction is completed.

7.

Recurring Deposit Account

It is also called cumulative deposit scheme. Any resident, individual, association, club, institution/ agency is eligible to open this account in single/joint names. The account can be opened for any period ranging from 6 months to 120 months, in multiple of 1 month for monthly installment. The amount selected for installment at the start of the scheme is payable every month and the number of installments once fixed, cannot be changed. The rate of interest is compounded quarterly and the final amount is paid on maturity.