Business Services and Banking Lecture Review

Flashcards based on lecture notes covering various business services, types of bank accounts, functions of commercial banks, and electronic banking.

Business Services

Services which are used by enterprises for the conduct of their activities.

Banking

A business service that helps enterprises acquire funds for purchasing assets, raw materials, and meeting day-to-day expenses by accepting deposits and lending loans.

Insurance

A business service that provides protection against various types of business risk by insuring goods.

Transportation

Facilities that assist business services in moving goods from one place to another to make the exchange efficient.

Warehousing

The holding and preservation of goods until they are finally consumed, overcoming storage problems and creating time utility.

Communication

Services such as postal and telephone that remove communication hindrances and allow business firms to quickly exchange information.

Saving Deposit Account

A bank account that encourages small savings by households, paying interest at a nominal rate that is lower than a fixed deposit account.

Current Deposit Account

An account suited for business organizations requiring an initial deposit of $5000\text{ rupees}$, allowing unlimited deposits and withdrawals via cheque without earning interest.

Recurring Deposit Account

An account where a depositor deposits a fixed amount of money on an annuity or monthly basis for a fixed term, earning a higher interest rate than a savings account.

Fixed Deposit Account

An account where money is deposited for a fixed period ranging from $15\text{ days}$ to $5\text{ years}$ to earn a higher rate of interest based on the duration.

Multiple Option Deposit Account

A combination of savings and fixed deposit accounts where any deposited amount exceeding a specified limit is automatically transferred to a fixed deposit account.

Bank Draft

An instrument used for the transfer of funds (also known as a demand draft) drawn by a bank branch on another branch or bank at the destination city for a commission fee.

Banker's Cheque

An instrument issued for local money transfer within the same city or town, also known as a pay order.

Real Time Gross Settlement (RTGS)

The fastest internet-based fund transfer system within India that processes transactions continuously and settles them on a real-time basis during business hours without a waiting period.

National Electronic Fund Transfer (NEFT)

A nationwide system facilitating electronic fund transfers between bank branches where settlements occur in batches at regular time intervals.

Cash Credit

A short-term cash loan provided to a company up to a sanctioned credit limit based on creditworthiness and requiring security.

Bank Overdraft

A temporary facility allowing a customer to overdraw their current account balance up to an agreed limit at a lower interest rate than cash credit.

E-banking

Banking services provided using electronic media, allowing customers to conduct transactions using a computer, laptop, or mobile phone.