BUSINESS STUDIES ASSIGNMENT

3
Sumedh Paruya XI C Morn

1) The Benefits of E-Banking to Clients are as

follows:

a) Digital Payment and Transparency: With e-banking

there is possibility of digital payment. It promotes
transparency in financial statements.
b) Unlimited Access: E-banking leads to greater
customer satisfaction by offering unlimited access to
the bank, not limited by the walls of the branch.
c) 24 x7 Services: E-banking provides twenty-four
hours 365 days a year services to the customers of the
bank.

The Benefits of E-Banking to Banks are as follows:

a) Competitive Advantage: E-banking provides

competitive advantage to the bank.
b) Unlimited Network: E-banking provides unlimited
network to the bank and is not limited to the number
of branches. Any PC connected to a modem and a
telephone can provide cash withdrawal needs of the
customer.
c) Reduced Load on Branches: The load on branches
can be reduced by establishing centralised database
and by taking over some of the accounting functions.

2) The Following forms of enterprises classified under

public sector are:
a) Indian Railway- Departmental Undertaking.
b) Steel Authority of India- Government Company.
c) Food Corporation of India- Statutory Corporation.
Basis of Department Statutory Governme
Differentiati al Corporati nt
on Undertakin on Company
gs
Formation It is formed It is It is formed
by the formed by by getting
ministry as a passing a registered
department special Act under
of in the Companies
Government Parliament Act, 1956.
 . or State
Legislature
with at
2
least 3 rd
majority of
members.
Legal Status No Separate Separate Separate
Legal Legal Legal
Entity. Entity. Entity.

3) The Different types of Banks are as follows:

(i) Commercial Banks: Commercial banks are
financial institutions dealing in money. These are
governed by Indian Banking Regulation Act 1949 and
according to it banking means accepting deposits of
money from the public for the purpose of lending or
investment. There are two types of commercial banks,
public sector and private sector banks. Public sectors
banks are those in which the government has a major
stake and they usually need to emphasise on social
objectives than on profitability. Private sector banks
are owned, managed and controlled by private
promoters and they are free.
(ii) Cooperative Banks: Cooperative Banks are
governed by the provisions of State Cooperative
Societies Act and meant essentially for providing
cheap credit to their members. It is an important
source of rural credit i.e., agricultural financing in
India,
(iii) Specialised Banks: Specialised banks are foreign
exchange banks, industrial banks, development banks,
export-import banks catering to specific needs of
these unique activities. These banks provide financial
aid to industries, heavy turnkey projects and foreign
trade.
(iv) Central Banks: The Central bank of any country
supervises, controls and regulates the activities of all
the commercial banks of that country. It also acts as a
government banker. It controls and coordinates
currency and credit policies of any country. The
Reserve Bank of India is the central bank of our
country.

4) The four primary objectives of such reform is:

a) Reduction in the number of industries reserved for
public sector from 17 to 8 (and then to 3): In
Industrial Policy of 1956 there were 17 industries
reserved exclusively for public sector. In 1991
Industrial Policy the number was reduced to 8 and in
2001 it was brought down to 3. These are:
(i) Atomic energy
(ii) Arms
(iii) Rail Transport.
This means after 2001, the private sector could enter
in all the areas except these three. Government
realised that if we allow private sector in most of the
sectors, this will encourage even public sector to
perform better when they will have to compete with
private sector.

b) Disinvestment of shares of a selected set of public

sector enterprises: Disinvestment refers to sale of
equity shares of public sector units to private sector
and public. The government decided to withdraw its
holdings from PSUs and encourage more participation
of private sector in managing public sector units. It
was expected that it will improve managerial
efficiency of PSUS.
The primary objectives of privatisation are:
(i) Releasing the large amount of public funds
blocked in these units and utilising them for other
Social Priority projects such as education, health etc.
(ii) Reducing debt and interest burden
(iii) Transferring the risk from public sector to private
sector
(iv) Reducing government control
(v) Discouraging government monopoly e.g.,
Telecom Industries.

c) Policy regarding sick units to be the same as that

for the private sector: All the loss-making public-
sector enterprises were handed over to BIFR (Board
of Industrial and Financial Reconstruction). The BIFR
decided to wind up some very sick units and to revive
and rehabilitate some other sick units where there is
scope to convert them into healthy units. There was
lot of opposition shown by the workers and
employees of units which were decided to be closed
down. So, the government of India set up National
Renewal Fund to rehabilitate and compensate the
workers and offer them various voluntary retirement
schemes. There are many enterprises which are very
sick and the government is not in a position to feed
them anymore. That is why the government has to
take the harsh step of closing these units after
providing safety to the workers of these units through
National Renewal Fund.
d) Memorandum of Understanding (MoU): Under
MoU the public sector is given greater autonomy.
They are given the targets and to achieve these targets
these units are granted operational freedom but they
are accountable for not achieving the results on time.
Through MoU the unnecessary interferences of
ministers can be reduced and more autonomy is
granted to these units but they are held accountable
for specific results.

5. Business services are those services which are used

by business enterprises for the conduct of their
activities. For example, banking, insurance,
transportation, warehousing and communication
services.
The five I’s of services which distinguish them from
Goods are as follows:
a) Intangible: Services are intangible, i.e., these
cannot be seen or touched. We can only feel services
or one can only experience them. We cannot find out
the quality of service before taking it. One can find
out the quality only after experiencing it. So supplier
must try to offer good quality services to customers so
that they demand them again after experiencing them.
b) Inconsistency: Services have to be performed each
time according to the demands and expectation of
each customer. Same services may be provided
differently by different service providers. For
example, the banking services provided by
nationalised banks are quite different from the
banking services provided by private sector or foreign
banks.
c) Inventory (less): The main feature of services is
that services are consumed at the same time, when
they are produced. So there is no need to maintain
inventory or stock of services. If service is not
consumed immediately then it is a total loss, for
example, vacant seat in a cinema hall.
d) Inseparability: The services cannot be separated
from the provider of services. These are produced and
consumed at the same place only. For example, we
cannot separate the medical service provided by a
doctor from the doctor. Doctor and his services are
inseparable. Similarly, it applies to lawyer, a
chartered accountant etc.
e) Involvement: To experience a service the
participation of the customer is essential. For
example, telephone companies provide telephone
services but to use this service customer has to make
or receive the call.