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

• Services: Intangible activities satisfying wants, not linked to physical product sales (e.g., doctor’s advice).
• Goods: Tangible products with ownership transfer (e.g., medicines).
• Business services (e.g., banking, insurance) support enterprises, enabling operations like petrol distribution.

Nature of Services (Five I’s)

• Intangibility: Cannot be touched; quality assessed post-consumption (e.g., doctor’s treatment).
• Inconsistency: Varies by customer needs (e.g., mobile services tailored to demands).
• Inseparability: Production and consumption simultaneous (e.g., dining at a restaurant).
• Inventory (Less): Perishable, cannot be stored (e.g., train journey experience).
• Involvement: Customer participation in delivery (e.g., self-service in fast food).

Difference Between Services and Goods

• Nature: Services are processes; goods are physical objects.
• Type: Services are heterogeneous; goods are homogeneous.
• Inventory: Services cannot be stored; goods can.
• Involvement: Services require customer participation; goods do not.

Types of Services

• Business Services: Support enterprises (e.g., banking, insurance, transport).
• Social Services: Voluntary, aim to improve living standards (e.g., NGO healthcare).
• Personal Services: Vary by customer/provider (e.g., tourism, restaurants).

Banking

Definition: Accepts deposits for lending/investment, repayable on demand (e.g., via cheques).

• Commercial Banks: Public (e.g., SBI) and private (e.g., HDFC).
• Cooperative Banks: Rural credit under State Cooperative Societies Act.
• Specialised Banks: For industry, foreign trade (e.g., EXIM Bank).
• Central Bank: Regulates banks (e.g., RBI).

• Accept deposits (current, savings, fixed).
• Lend funds (overdrafts, cash credits, loans).
• Cheque facility (bearer, crossed).
• Remittance (drafts, pay orders).
• Allied services (bill payments, lockers).

e-Banking

• Definition: Banking via internet using PC/mobile (e.g., managing accounts, paying bills).
• Services: ATMs, PoS, EDI, credit cards, EFT (NEFT, RTGS).
• Benefits:
  1. 24/7 access, digital payments, transparency.
  2. Convenience, reduced branch load, enhanced security.

Insurance

• Definition: Contract to compensate for losses from uncertain events via premium payments.
• Functions: Provides certainty, protection, risk sharing, capital formation.
• Principles:
  1. Utmost Good Faith: Full disclosure by insured/insurer.
  2. Insurable Interest: Pecuniary interest in insured subject.
  3. Indemnity: Compensates actual loss (not life insurance).
  4. Proximate Cause: Pays for loss from covered peril.
  5. Subrogation: Insurer gains rights to recover from other sources post-claim.
  6. Contribution: Multiple insurers share loss proportionately.
  7. Mitigation: Insured must minimise loss.

Types of Insurance

• Life Insurance: Pays on death or maturity; not indemnity-based; encourages savings.
• Fire Insurance: Covers accidental fire loss; indemnity-based; insurable interest at loss time.
• Marine Insurance: Covers ship, cargo, freight losses; indemnity-based.
• Others: Health, motor vehicle, burglary, cattle, crop, sports, Amartya Sen Siksha Yojana, Rajeswari Mahila Kalyan Bima Yojana.

Communication Services

• Financial: PPF, Kisan Vikas Patra, savings accounts, money orders.
• Mail: Parcel, registration, insurance for transmission risks.
• Allied: Greeting post, media post, international money transfer, speed post.

• Cellular mobile, fixed line, cable, VSAT, DTH services.

Transportation

• Moves goods/passengers via rail, road, air, sea; removes place hindrance.
• Infrastructure: National highways (e.g., Golden Quadrilateral), ports, airports.

Warehousing

• Definition: Stores goods to maintain quality, value; now logistical providers.
• Types:
  1. Private: Owned by companies for own goods.
  2. Public: For public use with fee.
  3. Bonded: For imported goods pre-duty payment.
  4. Government: Managed by public sector (e.g., FCI).
  5. Cooperative: For cooperative society members.
• Functions: Consolidation, break bulk, stockpiling, value-added services (e.g., packaging), price stabilisation, financing.