Key Notes: Business Services | Business Studies (BST) Class 11 - Commerce PDF Download

What is a Service?

• Services are intangible economic activities performed to fulfill specific needs and are not necessarily associated with the sale of a physical product (e.g., receiving advice from doctors).

• Services are intangible and cannot be touched.
• They are inconsistent and tailored to individual needs.
• Services are inseparable from production and consumption, happening simultaneously.
• They cannot be stored for an extended period, resulting in lower inventory.
• High customer involvement in the service delivery process.

Differences between Goods and Services

Goods

• Physical objects.
• Homogeneous, fulfilling similar customer needs.
• Tangible.
• Separate production and consumption.
• Can be stocked.
• Customer involvement after sale if issues arise.

Services

• Activities or processes.
• Heterogeneous, catering to diverse customer demands.
• Intangible.
• Simultaneous production and consumption.
• Cannot be stocked.
• High customer involvement during delivery.

Types of Services

• Business Services: Services used by businesses for their operations, including banking, insurance, transportation, warehousing, and communication services.
• Social Services: Services pursued to meet social goals, such as healthcare and education services provided by NGOs and government agencies.
• Personal Services: Services offering unique customer experiences, including tourism, recreational services, and restaurants.

What is Banking?

• Banking involves accepting deposits from the public, lending money, and earning a profit margin through lending. Banks also facilitate transactions through various financial instruments.

• Commercial Banks: Deal in money, accept deposits, and lend to individuals and businesses. Can be public sector or private sector.
• Cooperative Banks: Provide cheap credit to members, governed by State Cooperative Societies Act.
• Specialized Banks: Cater to specific needs like industries, foreign trade, and development projects. Examples include foreign exchange banks and development banks.
• Central Bank: Supervises and regulates all commercial banks within a country. In India, the Reserve Bank of India (RBI) serves as the central bank.

• Acceptance of deposits.
• Lending of funds.
• Providing check facilities.
• Remittance of funds.
• Offering allied services.

What is e-banking?

• E-banking involves performing virtual banking functions and accessing a bank's services via its website through an internet browser.

• Facilitates digital payments and enhances financial transparency.
• Available 24/7, 365 days a year.
• Convenient transactions without physical travel.
• Maintains transparent transaction records.
• Enhances customer satisfaction.

What is Insurance?

• Insurance spreads the risk of uncertain events by pooling contributions from individuals exposed to those risks. It provides financial protection against losses resulting from such events.

• Providing certainty.
• Protection against risk.
• Sharing risk among policyholders.
• Assisting in capital formation.

• Utmost good faith.
• Insurable interest.
• Indemnity.
• Proximate cause.
• Subrogation.
• Contribution.
• Mitigation.

• Life Insurance: Provides a sum assured upon the death of the insured or at a specified age.
• Fire Insurance: Covers losses or damage caused by fire during a specified period.
• Marine Insurance: Provides protection against losses during marine journeys.

• Whole-life policy.
• Endowment Life Assurance Policy.
• Joint Life Policy.
• Annuity Policy.
• Children’s Endowment Policy.

• Ship or hull insurance.
• Cargo insurance.
• Freight insurance.