SERVICESERVICEService are all those economic activities Service are all those economic activities

that are intangible and imply an that are intangible and imply an interaction to be realised between the interaction to be realised between the service provider and the consumerservice provider and the consumer..

NATURE OF THE SERVICENATURE OF THE SERVICE IntangibilityIntangibility:: service are intangible that service are intangible that

cannot be touched. They are experimental in cannot be touched. They are experimental in nature. For example one cannot taste the nature. For example one cannot taste the Doctor’s treatment, or touch entertainment. Doctor’s treatment, or touch entertainment. One can only experience it.One can only experience it.

Inconsistency:Inconsistency: since there is no standard since there is no standard tangible product, service have to be performed tangible product, service have to be performed exclusively each time. Different customers exclusively each time. Different customers have different demand and expectation.have different demand and expectation.

Inseparability: Another important characteristics of service is the simultaneous activity of production and consumption being performed.

Inventory: service have little or no tangible component and, therefore, cannot be stored for a future use. That is, service are perishable and providers can, at best, store some associated goods but not the service itself.

Involvement: One of the most important characteristics of service is the participation of the customer in the service delivery process.

DIFFERENCE BETWEEN SERVICE AND DIFFERENCE BETWEEN SERVICE AND GOODSGOODS

BasisBasis ServicesServices GoodsGoods

NatureNature An activity or An activity or processprocess

A physical objectA physical object

TypeType HeterogeneousHeterogeneous HomogenousHomogenous

IntangibilityIntangibility IntangibleIntangible TangibleTangible

InconsistencyInconsistency Different Different customers customers having different having different demands .demands .

Different Different customers getting customers getting standardised standardised demand fulfilled.demand fulfilled.

InseparabilityInseparability Simultaneous Simultaneous production and production and consumption.consumption.

Separation of Separation of production and production and consumption.consumption.

InvolvementInvolvement Participation of Participation of customers at customers at the time of the time of services services delivery.delivery.

Involvement at Involvement at the time of the time of delivery not delivery not possible.possible.

InventoryInventory Cannot be kept Cannot be kept in stockin stock

can be kept in can be kept in stockstock

Types of serviceTypes of service Business services.Business services. Social services.Social services. Personal services.Personal services.

Business servicesBusiness services: Business : Business services are those services services are those services which are used by business which are used by business enterprises for the conduct of enterprises for the conduct of their activities.their activities.

BANKINGBANKING

A banking company in India is the one A banking company in India is the one which transacts the business of which transacts the business of banking which means accepting, for banking which means accepting, for the purpose of lending & investment the purpose of lending & investment of deposits of money from the of deposits of money from the public, repayable on demand or public, repayable on demand or otherwise or withdrawable by otherwise or withdrawable by cheques, draft, order or otherwise.cheques, draft, order or otherwise.

Types of BankingTypes of Banking

•Commercial banks.Commercial banks.

•Cooperative banks.Cooperative banks.

•Specialised banks.Specialised banks.

•Central banks.Central banks.

Functions of Commercial Functions of Commercial banksbanks

Acceptance of deposits.Acceptance of deposits.

Lending of funds.Lending of funds.

Cheque facility.Cheque facility.

Remittance of funds.Remittance of funds.

Allied services.Allied services.

e- Bankinge- Banking Internet banking means any user with a PC Internet banking means any user with a PC

& a browser can get connected to the & a browser can get connected to the banks web site to perform any of the banks web site to perform any of the virtual banking functions & avail of any of virtual banking functions & avail of any of the bank’s services. There is no human the bank’s services. There is no human operators to respond to the needs of the operators to respond to the needs of the customers. The bank has a centralised data customers. The bank has a centralised data base that is web- enabled. All the service base that is web- enabled. All the service that the bank has permitted on the that the bank has permitted on the internet are displayed on a menu.internet are displayed on a menu.

The range f services offered by e-Banking The range f services offered by e-Banking are:are:

Electronic Funds Transfer (EFT), Automated Electronic Funds Transfer (EFT), Automated Teller Machines (ATM) & Point of Sales.Teller Machines (ATM) & Point of Sales.

BENEFITSBENEFITSThere are various benefits of e-Banking provided to There are various benefits of e-Banking provided to

customers:customers: e- Banking provides 24 hours, 365 days a year e- Banking provides 24 hours, 365 days a year

services to the customers of the bank.services to the customers of the bank. Customers can make some of the permitted Customers can make some of the permitted

transactions from office or house or while travelling transactions from office or house or while travelling via mobile telephone.via mobile telephone.

It inculcates a sense of financial discipline by It inculcates a sense of financial discipline by recording each & every transactions.recording each & every transactions.

The banks also stand to gain by e-BankingThe banks also stand to gain by e-Banking:: e- Banking provides competitive advantage to the e- Banking provides competitive advantage to the

bank.bank. e-Banking provides unlimited network to the bank & e-Banking provides unlimited network to the bank &

is not limit to the number of branches.is not limit to the number of branches. Load on branches can be considerably reduced by Load on branches can be considerably reduced by

establishing centralised data base.establishing centralised data base.

INSURANCEINSURANCE Insurance is a contract or agreement under Insurance is a contract or agreement under

which one party agrees in return for a which one party agrees in return for a consideration to pay an agreed amount of consideration to pay an agreed amount of money to another party to make a loss, money to another party to make a loss, damage or injury to some thing of value in damage or injury to some thing of value in which the insured has a pecuniary interest which the insured has a pecuniary interest has a result of some uncertain event. The has a result of some uncertain event. The agreement/ contract is put in writing & is agreement/ contract is put in writing & is known as ‘policy’. The person whose risk is known as ‘policy’. The person whose risk is insured is called ‘insured’. & the firm which insured is called ‘insured’. & the firm which insures the risk of loss is known as insurer/ insures the risk of loss is known as insurer/ assurance under writer. assurance under writer.

FUNCTIONS OF INSURANCE. • Providing certainty.• Protection.• Risk sharing.• Assist in capital formation

PRINCIPLES OF INSURANCE•Utmost good faith.• Insurable interest.• Indemnity.• Proximate causes.• Subrogation.• Contribution.• Mitigation

TYPES OF INSURNCETYPES OF INSURNCE

• Life insurance.• Fire insurance.• Marine insurance.

• LIFE INSURANCE : Life insurance may be defined as a contract in which the insurer in consideration of a certain premium, either in a lump sum or a by other periodical payments, agrees to pay to the assured or to the person for whose benefits the policy is taken, the assured sum of money, on the happening of a specified event contingent on the human life or at the expiry of certain period.

Main elements of Life insurance:• The life insurance contract must have all the essentials of a valid contract.• The contract of life insurance is a contract of utmost good faith.• In life insurance, the insured must have insurable interest in the life assured.• Life insurance contract is not a contract of indemnity.

TYPES OF LIFE INSURANCE POLICY• Whole Life Policy.• Endowment Life Assurance Policy.• Joint Life Policy.• Annuity Policy.• Children's Endowment Policy.

FIRE INSURANCEFIRE INSURANCE• Fire insurance is a contract whereby Fire insurance is a contract whereby

the insurer, in consideration of the the insurer, in consideration of the premium paid, under takes to make premium paid, under takes to make good any loss or damage caused by good any loss or damage caused by the fire during a specified period up the fire during a specified period up to the amount specified in the policy.to the amount specified in the policy.

A claim for loss by fire must satisfy A claim for loss by fire must satisfy the 2 following conditions:the 2 following conditions:

• There must be actual loss.There must be actual loss.• Fire must be accidental & non Fire must be accidental & non

intentional.intentional.

The main elements of a fire insurance:• In fire insurance, the insured must have insurable interest in the subject matter of the insurance.• Similar to the life insurance contract, the contract of fire insurance is a contract of utmost good faith.• The contract of fire insurance is a contract of indemnity.• The insurer is liable to compensate only when fire is the proximate cause of damage or loss.

MARINE INSURANCEMARINE INSURANCE• A marine insurance contract is an A marine insurance contract is an

agreement where by insurer under agreement where by insurer under takes to indemnify the insured in the takes to indemnify the insured in the manner & to the extent there by manner & to the extent there by agreed against marine losses.agreed against marine losses.

There are three things involved in There are three things involved in marine insurance. They are:marine insurance. They are:

• Ship or Hull insurance.Ship or Hull insurance.• Cargo insurance.Cargo insurance.• Freight insurance.Freight insurance.

The main elements off marine insurance:• Unlike life insurance, the contract of marine insurance is a contract of indemnity.• The contract of marine insurance is a contract of utmost good faith.• Insurable interest must exist at the time of loss but not necessary at the time of when the policy was taken.• The principle of causa proxime will apply to it.

COMMUNICATION SERVICECommunication services are helpful to the business for establishing links with the out side world. The main services which help business can be classified in to postal & telecom services.

POSTAL SERVICEPOSTAL SERVICEIndian post & telegraph department provides Indian post & telegraph department provides various postal services across India. The various postal services across India. The various facilities provided by postal various facilities provided by postal department are broadly categorised into:department are broadly categorised into:Financial facilities.Financial facilities.Mail facilities.Mail facilities.

Postal department also offers allied facilities Postal department also offers allied facilities of the following type:of the following type:Greeting postGreeting postMedia postMedia postDirect post.Direct post.International money transfer.International money transfer.Passport facilitiesPassport facilitiesSpeed postSpeed poste- Bill poste- Bill post

TELECOM SERVICETELECOM SERVICE

The various types of telecom services:The various types of telecom services: Cellular mobile services.Cellular mobile services. Radio paging services.Radio paging services. Fixed line services.Fixed line services. Cable services.Cable services. VSAT services.VSAT services. DTH services.DTH services.WAREHOUSING:WAREHOUSING: The warehouse was The warehouse was

initially viewed as a static unit for initially viewed as a static unit for keeping & storing goods in a scientific keeping & storing goods in a scientific & systematic manner so as to maintain & systematic manner so as to maintain their original quality, value & their original quality, value & usefulness.usefulness.

TYPES OF WAREHOSES• Private warehouses •Public warehouses. •Bonded warehouses.•Government warehouses.•Cooperative warehouses.

FUNCTIONS OF WAREHOUSING• Consolidation.• Break the bulk.• Stock piling.• Value added services.• Price stablisation.• Financing.

EXPORT PROCEDURE

Steps involved in a typical export transaction:Receipt of enquiry & sending quotations.Receipt of order or indent.Assessing importer’s credit-worthiness & securing a guarantee for payments.Obtaining export license.Obtaining pre-shipment finance.Production or procurement of goods.Pre- shipment inspection.

•Excise clearance.• Obtaining certificate of origin.• Reservation of shipping space.• Packing & forwarding.• Insurance of goods.• Customs clearance.• Obtaining mates receipts.• Payment of freight & issuance of bill of lading.• Preparation of invoice.• Securing payment

IMPORT PROCEDUREIMPORT PROCEDUREVarious steps involved in a typical import Various steps involved in a typical import

transaction for bringing goods into Indian transaction for bringing goods into Indian territory:territory:

Trade enquiry.Trade enquiry. Procurement of import license.Procurement of import license. Obtaining foreign exchange.Obtaining foreign exchange. Placing order or indent.Placing order or indent. Obtaining letter of credit.Obtaining letter of credit. Arranging for finance.Arranging for finance. Receipt of shipment advice.Receipt of shipment advice. Retirement of import documents.Retirement of import documents. Arrival of goods.Arrival of goods. Customs clearance & release of goods.Customs clearance & release of goods.

FOREIGN TRADE PROMOTION MEASURES & SCHEMESMajor trade promotion measures are as follows:

• Duty drawback scheme.• Export manufacturing under bond scheme.• Exemption from payment of sales taxes.• Advance license scheme.• Export promotion capital goods scheme(EPCG).• Scheme of recognising export firms as export

house, trading house & super star trading house.

• Export of services.• Export finance.• Export processing zones (EPZs).• 100% export oriented units (100% EOUs).

ORGANISATIONAL SUPPORT

Department of Commerce. Export Promotion Councils(EPCs). Commodity Boards. Export Inspection Councils(EPCs). Indian Trade Promotion

Organisation(ITPO) Indian Institute of Foreign Trade

(IIFT). Indian Institute of Packaging (IIP). State Trading Organisation.

INTERNATIONAL TRADE INSTITUTIONS & TRADE AGREEMENTS

The meeting was concluded with the setting up of three international institutions, namely the international monetary fond (IMF), International bank for reconstruction & development(IBRD) & the International Trade Organisational (ITO). They considered this three organisations as three pillars of economic development of the world.

WORLD BANKWORLD BANKThe International Bank for Reconstruction &

Development (IBRD) , commonly known as World Bank, was result of the Bretton Woods conference. The main objective behind settings up this international organisational were to aid the task of reconstruction of the war affected economies of Europe & assist in the development of the under developed nation of the World.

Function of the world bankToday, the world bank is no longer confined to

simply providing financial infrastructure development. But it is rather significantly involved in areas like removal of rural property through raising productivity, increasing income of the rural poor, providing technical support, & initiating research & cooperative ventures.

INTERNATIONAL DEVELOPMENT ASSOCIATION

International Development Association (IDA) was set up in 1960 as an affiliate of the world bank.

Major objectives of IDA include: To provide development finance on easy

terms to the less developed member countries

To provide assistance for poverty alleviation in the poorest countries.

To provide finance at concessional interest rates in order to promote economic development.

To extend macro economic management service

FUNCTIONS OF IMF

Acting as short –time credit institution. Providing machinery for the orderly

adjustment of exchange rates. Acting as a reservoir of the currencies

of all the member countries, from which a borrower nation can borrow the currency of other nations.

Acting as a lending institution of foreign currency & current transaction.

Determining the value of a country’s currency & alerting it.

Providing machinery for international consultations.

WORLD TRADE ORGANISATION (WTO) AGREEMENTSWTO is a permanent organisation created by an international treaty ratified by governments & legislatures of member states.

OBJECTIVES OF WTO: To ensure reduction of tariffs & other trade

barriers imposed by different countries. To engage in such activities which improve

the standards of living, create employment. To facilitate the optimal use of the world’s

resources for sustainable development. To promote an integrated, more viable &

durable trading system.

FUNCTIONS OF WTO Promoting an environment that is encouraging

to its member countries. Acting as a dispute settlement body. Laying down a commonly accepted code of

conduct with a view to reducing trade barriers. Ensuring that all rules regulations prescribed in

the act are duly followed by the member countries for the settlement for their disputes.

Holding consultations with IMF & IBRD & its affiliated agencies to bring better understanding & cooperation.

Supervising on a regular basis the operations of the revised Agreements & Ministerial declarations relating to goods services & Trade Related Intellectual Property Rights (TRIPS)

BENEFITS OF WTO• WTO helps promote international peace &

facilitates international business.• All disputes between member nation are settled

with mutual consultations.• Rules make international trade & relations very

smooth & predictable.• Free trade improves the living standard of the

people by increasing the income level.• Free trade provides ample scope of getting

varieties of qualitative products.• Economic growth has been fastened because of

free trade.• The system encourages good government.• WTO helps fostering growth of developing

countries by providing them with special & preferential treatment in trade related matters.

WTO AGREEMENTSWTO AGREEMENTS

Agreements forming part of GATT.Agreements forming part of GATT. Agreement on Textile & Clothing Agreement on Textile & Clothing

(ATC).(ATC). Agreement on Agriculture (AoA).Agreement on Agriculture (AoA). General Agreement on Trade in General Agreement on Trade in

Services (GATS).Services (GATS). Agreement on Trade Related Aspects Agreement on Trade Related Aspects

of Intellectual Property Rights of Intellectual Property Rights (TRIPS).(TRIPS).