Banking Assets,Liability products- Fee Based Services

Objectives :Appreciate the various Fee based services offered by banks in their role as provider of financial services

Banks as a Provider of Fee based Services : Banks as a Provider of Fee based Services Services provided by banks as provider of allied services: Distribution Collection of taxes and bills DeMAT accounts Safe keeping Advisory services

Distribution : Distribution In banking, distribution of products of third parties have assumed great importance as a result of: Generation of fee income Ability to provide single umbrella service Ability to create exit barrier

Products offered by banks within distribution service : Mutual Fund Units Insurance products Government bonds Gold coins Mobile phone recharge Shares of organisations offering public issues Distribution (Contd.)

Collection of Taxes and Bills : Collection of Taxes and Bills Products offered by banks within the collection service: Taxes Utility bills

DeMat Accounts : DeMat Accounts A depository is like a bank, however, depository holds customers’ securities and not money The account opened with a depository participant (DP) is called a DeMat account Dematerialisation is the process of converting physical shares into electronic form Rematerialisation is the process of converting securities from electronic form into physical form

DeMat Accounts (Contd.) Physical securities are transferred on basis of transfer deeds, DeMat securities get transferred electronically Each security (or share of a particular company) has a unique identification number called ISIN (International Securities Identification Number) through which the securities are recognised

Transfer Instruction For Delivery (TIFD) or delivery slip given by the seller to his DP Shares will be transferred out of seller’s DeMat account into the buyer’s DeMat account The entire clearing process is put through a central depository At present there are two depositories registered with SEBI: Central Depository Services Limited (CDSL) National Security Depository Limited (NSDL)

Safekeeping : Safekeeping Safe Deposit Vaults: Safekeeping facility is a traditional function of banks Lockers provided at very reasonable rates Rents are charged as per size of the locker and are payable in advance Lockers can be hired by individuals, firms, limited companies, associations, and societies Lockers are rented out for a minimum period of one year

Safe Custody: Banks accept sealed packets for safekeeping in their strong rooms for which a receipt is issued Articles are returned upon the customer handing over the receipt Not offered any more as a matter of course Banks deposit the duplicate keys of branches for safe custody with other banks in the area for use in emergencies

Advisory Service : Advisory Service The product offered by banks within the advisory service is investment advice Investors need professional assistance for following purposes: To select the right investment options To track the performance of the investments To track the performance of the organisations in which investments have been made

Banking Channels : Banking Channels Banking Channels: ATMs POS terminals Internet banking Phone banking Mobile banking Branch banking Migrating from branch banking to other channels - Advantages: Convenience to customers Cost effective to banks

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