Explain the various ‘general utility services’ provided by banks to their customers/clients.
General utility services’ provided by banks to their customers/clients are:
a) Locker Facility: Bank provides locker facilities to their customers. The customers can keep their valuables, such as gold and silver ornaments, important documents, shares and debentures etc. in these lockers for safe custody.
b) Credit Cards: A credit card is a payment card issued to a user as a system of payment. It allows the cardholder to pay for goods and services based on the promise to pay for them.
c) Debit Cards: A debit card is a plastic payment card that provides the cardholder electronic access to his/her bank account at the financial institution. It is a card that deducts money directly from a consumer’s checking account to pay for a purchase. Debit cards eliminate the need to carry cash to make purchases.
d) Letter of Credit: A letter of credit is a guarantee letter from a bank thereby guaranteeing that the buyer’s payment to the seller will be received on time and for the correct amount. In case of non -payment, the bank will be required to cover the full or remaining amount of the purchase.
e) Collection of Statistics: Banks collect statistics giving important information relating to trade, commerce, industries, money and banking. They also publish valuable journals and bulletins containing articles on economic and financial matters.
f) Acting Referee: Banks may act as referees concerning the financial standing, business reputation and respectability of customers.
g) Underwriting Securities: Banks underwrite the shares and debentures issued by the Government, public or private companies.
h) Gift Cards: Banks issue gift cards of various denominations to be used on auspicious occasions.
i) Merchant Banking: Some commercial banks have opened merchant banking divisions to provide merchant banking services.
j) Automated Teller Machine (ATM): It is installed by almost all the banks to facilitate the customers to withdraw money at any time as per their convenience on all the day s of the year.
k) Electronic Clearing System (E.C.S.): This system helps to credit the funds faster. Under this system, the account holder can make payments to other parties having their account in the same banks without issuing any proper instrument.