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What are the services a bank offers to customers?

What are the services a bank offers to customers?


The core business of a bank is to accept deposits from the public for the purpose of lending and investment. The Section 5(b) of the Banking Regulation Act, 1949, provides that “banking” means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, and order or otherwise.

In addition to above form of core business, the commercial banks provide numerous ancillary services to their customers as envisaged in Banking Regulation Acts 1949. The other services provided by the banks are as under.

  1.  Collection of instruments and securities on behalf of customers
  2. Selling Mutual funds products to customers/ Portfolio Management
  3. Merchant Banker: The merchant banker may be in the form of a bank or a firm who are licensed by SEBI to undertake non-financial services (rather than providing funds) such as the issue of stocks, funds rising and management, advisory services, counsel on merger and acquisition. A merchant banker underwrites corporate securities and provides guidelines to clients on issues like corporate mergers.t or Merchant Banking services
  4. Facility of remittance of funds within the branches of the bank and other banks through NEFT and RTGS services.
  5. Issuance of DD/BC/PO : A customer or a general public (cash transaction restricted to Rs.50000/-) can buy a demand draft. Bank issues a demand draft to customers as well as public for a commission, directing one of its own branches to pay a certain sum to the specified party (payee). In some cases DD can be drawn on another bank (usualy a foreign bank branch situated outside India) under tie up arrangement between them. However, Bankers cheque and Pay Orders are paid to the beneficiary by the branch which has issued them.
  6. Gold sale: The selected branches of banks sell pure gold coins usually from 4 gms to 100 grams to public for self -consumption or and gold bars for Jewellery traders..
  7. Sovereign Gold Bonds: The Reserve Bank of India, in consultation with Government of India, issues Sovereign Gold Bonds from time to time in tranches. Each of those tranches will be kept open for a specified period for investors to buy through banks, Stock Holding Corporation of India Limited (SHCIL), designated Post Offices etc. The individuals and HUF can buy these gold bonds up to 4 KGs and the Trusts and similar entities can buy up to 20 KGs.
  8. Bancassurance products: Banks sell Life and General Insurance products as corporate agents for Insurance companies.
  9. Card Service: Banks issue card products like debit card/credit cards and virtual cards to customers to use them in lieu of cash payments.
  10. Foreign currency money exchange business as Authorized dealer
  11. Government Account business like tax collection, pension payment etc.
  12. Collection of utility bills like telephone, electricity, municipal taxes etc.
  13.  Providing Safe-custody facility to its customers for keeping their valuables.
  14.  Providing the facility of Safe deposit vault.
  15. Technology based utility services like Mobile banking, internet banking, ECS services,    ATM service, NEFT, RTGS etc.
  16. Sending and receiving SWIFT financial messages to and from any countries to meet customer’s requirement.
  17. DEMAT services for securities trading.
  18. Facilities like issuance of Letter of Guarantee (Bank Guarantee), Deferred Payment Guarantee etc. issued on behalf of the customers for commission.
  19. Issuance of Letter of credits on behalf of importers (purchasers) of the goods and services .
  20. Acting as LC advising bank, LC Confirming Bank, LC Paying Bank and LC and LC reimbursing banks to  exporters   (sellers).
  21. Nomination facilities: This facility has been devised with an aim of minimising the hardships caused to the family members on the death of the depositor/s. Nominations can be made in respect of all types of deposit accounts by the individual account holders in their own capacity singly or jointly.

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