Business Services

Business Services

2.1     Business Services
2.2     Banking
2.3     Insurance
2.4     Communication
2.5     Warehousing
2.6     Transport
2.7     Distinguish Between
2.8     Summary
2.9     Exercise

A group of boys have graduated from college with a management degree and they plan to start a business together. They were not financially sound and yet they have decided to set up a garment manufacturing unit. They find that to progress further in this plan, they need to make arrangement for finance for which they approach a bank with the proposal for financing their project. Their business plan gets sanctioned and their project commences and their unit is ready for manufacturing soon. While, their unit is getting ready, they set their unit insured against fire and other risks. When their unit is ready for production, they send out their samples through courier to various prospective customers in India and overseas markers. Based on this, they get both domestic and export orders. They dispatch the goods by road transport to various domestic customers and in case of exports, they send their good by road transport to the port where it is examined by customs and then stored in the customs warehouse till the concerned vessel arrives and then this consignment gets loaded onto the vessel (water transport) for onwards journey to the final destination overseas.

2.1.1  Meaning
         Business services are those services which help in successful running of a business. Business services are provided to customer & supporting their needs sometimes through the support for a business process or directly supporting a business or product delivered to end customers.
Some of the examples of business services are Banking, Insurance, Transport, Warehousing and Communication. Business cannot be imagined in the absence of these services. With the growth in the business, the need and importance of these services are increasing accordingly.

         1.       Intangible : Service cannot be seen, touched and smelled as they are intangible. They can Intangible be felt. Like the building of the bank is visible but the banking services can't be seen, yet people can take benefits of the bank.
         2.       Heterogeneous : Services lack in homogeneity. Like the behaviour of a bank employee (a provided service) it can be good towards one customer and harsh towards the other. So, it is not essential that the services provided by a person or an organization are homogeneous.
         3.       Non-Stocking : Services cannot be stocked. e.g. A bank employee goes on strike on 10th January, now it is not possible to stock the services which they can give on that day and get double work done on 111 January. That's why it is said that demand and supply of services go hand in hand. Neither it is possible that the supply of services is more than its demand nor be stored: In other words, services are perishable.
         4.       Non-Transferable : Business services are of non-transferable nature. Thus, unlike the products there is no exchange of ownership in services. e.g. A patient visits a doctor. He takes the treatment by paying the fees. The patient cannot purchase the ownership of service by paying the fees. If he again falls ill, again he has to visit the doctor.
         5.       Participation of Customers : To avail the benefit of services, the participation of a customer is indispensable. e.g. A transport company is ready to take you on a tour, a bus is ready and waiting for the passenger. Now,-if the passenger wishes to avail this service, he has to travel in the bus. Without the participation of the customer, it is not possible to avail the benefit of the service.

         The following are the main types of business services
   1.       Banking Services : Banking services are those services which facilitate to provide finance to the business in any form. Like a bank provides the facility of loan to the business, business needs finance to purchase properties and for its daily routine expenses. This requirement of finance is fulfilled by taking loan from the bank. Apart from this, draft facility, locker facility, debit card and credit card facilities are also provided.
   2.       Insurance Services : An Insurance company, after charging a definite fee (Premium), transfers the risk of the businessman to itself. In the signed insurance agreement, the insurance company promises to pay a fixed amount to the insured either on the expiry of a fixed period or in case of a mishap. Insurance are of many types, like-life insurance, fire Insurance, marine Insurance, etc.
   3.       Transport Services : Transportation means to transfer goods, people, etc. from one place to. another. Transportation is mainly used to take raw materials, finished goods, human resources, etc from one place to another. Transport plays a significant role in the development of business, because only through the medium of transportation essential products, raw material and human resources are taken from one place to another. e.g., if there is a shortage of labour at a place then they can be brought only through the medium of transportation. Transportation is the only reason that makes business to develop or flourish in all the developed nations:
   4.       Warehousing : In the modern business era/world, warehousing is of significant importance. Warehousing means to store the material in a regular manner. The time of production and utilisation of the product can vary. Thus the problem of preserving the product until its use arises. This problem can be solved by the way of warehousing.
   5.       Communication : Communication means a process of exchanging messages between or among people to create common understanding. Communication is the main aid to trade. With this medium, enquiry about the products and services are made, orders are placed; complaints. and suggestions are registered and business transactions are finalized.

2.2     BANKING
2.2.1  Meaning
         Bank is an institution which deals in money and credit. It accepts deposits from the public and grants loans and advances to those who are in need of funds for various purposes. Banks encourage saving habits among individuals and thereby makes funds available for their use-as and when require. Banks also help in the nation's development by providing credit to farmers, small scale industries and self employed people as well as to large business houses which lead to balanced economic development of the country.
It also helps to raise the standard of living of the people in general by providing loans for purchase of consumer durable goods, houses, cars, etc.
A banker is one who undertakes banking activities. Banking is an activity which involves accepting of deposits for the purpose of lending and investing. Banking activities are considered to be the life blood of the national economy. Without banking services, trading and, business activities cannot be carried on smoothly.
Banks are the distributors and protectors of liquid capital which is of vital significance to a developing country. Efficient administration of the banking system helps in the economic growth of the nation.                                                                                     

2.2.2  Definitions :
         Oxford Dictionary : "Bank is an establishment for custody of money, which it pays out on customer's order."
         Indian Banking Companies Regulation Act, 1949 : "Banking Company is one which transacts the business of banking which means the accepting for the purpose of lending or investment of deposits of money from the public, repayable on demand or otherwise and withdrawable by cheque, draft, order or otherwise."

         1.       Central Bank : Central Bank is the apex bank of the banking structure of a country. It plays an important role in a country's monetary and banking system. Central Bank is the most important bank of a country. The main function of this bank is to maintain economic stability of the country and in reference to the underdeveloped countries, its main function is to bring economic development. This bank issues currency, controls other banks and works as a bank of the government. The Central Bank provides guidance to other banks, whenever they face any problem. It is therefore known as the banker's bank.
                  In India, the Reserve Bank of India, in England, The Bank of England and in America, The Federal Reserve Bank are the Central Banks.
         2.       Commercial Banks : These banks accept the deposits from the general public and provide short term loans to traders, manufacturers and businessmen by way of cash credits, overdrafts, etc. Commercial banks provide various services like collecting cheques, Bills of Exchange, remitting money from one place to another place; etc. Nowadays some of the commercial banks are also providing housing loans on a long term basis to individuals. Commercial banks are of three types i.e. Public sector banks, Private sector banks and Foreign Banks.
            a.  Public Sector Banks : These are banks where majority of the stake is held by the Government of India or Reserve Bank of India. Example of Public Sector Banks are State Bank of India, Corporation Bank, Bank of Baroda, Dena Bank, etc.
            b.  Private Sector Banks : In case of private sector banks majority of share capital is held by private individuals. These banks are registered as companies with limited liability. e.g. The Jammu & Kashmir Bank Ltd., Bank of Rajasthan Ltd:, Global Trust Bank, Vyasa Bank, etc.
            c.  Foreign Banks : These banks are registered and have their headquarters in a foreign country but operate their branches in our country. Foreign, Banks operating in our country have increased since the financial reforms of 1991. Examples of the foreign banks operating in. our country are Hong Kong and Shanghai Banking Corporation (HSBC), Citibank, American Express, Standard Chartered Bank, etc. .
         3.       Development Banks : Business often requires medium and long term capital for purchase of Machinery and equipment, for using latest technology or for expansion and modernisation. Such financial assistance is provided by Development Banks. They also undertake other development measures like subscribing to the shares and debentures issued by Companies, in case of under subscription of the issue by the,, public. Examples of Development Banks are Industrial Finance Corporation of India (IFCI) and State Financial Corporation (SFCs).
         4.       Co-operative Banks : Co-operative Banks are financial institutions registered under the co-operative societies Act. The main objective of such a bank is to give credit to economically backward people. In India co-operative banks are the main source of rural credit. These banks encourage saving habit among the villagers and give loans at a low rate of interest. There are three types of co-operative banks at different levels.
                  a.  Primary Credit Societies : These are formed at the village or town level with borrower and non borrower members residing in one locality. The operations of each society are restricted to a small area so that members know each other and can keep a watch over the activities of all the members to prevent frauds.
                       b.  District Central Co-operative Banks : These banks operate at district levels having some of the primary credit societies belonging to the same district as their members and functions as a link between the primary credit societies and state co-operative banks.
                       c.  State Co-operative Banks : These are the apex co-operative banks in all the states of the country. They mobilize funds and helps in its proper channelisation among various sectors. The money reaches the individual borrowers from the state co-operative banks through the central co-operative banks and primary credit societies.
         5.       Specialised Banks: There are some banks which cater to the requirements and provide overall support for setting up business in specific areas. Exim Bank, SIDBI and NABARD are examples of such banks.
                  a.  Export Import Bank of India (Exim Bank) : For setting up business for exporting products or importing products from foreign countries for sale in our country, EXIM Bank can provide the required support and assistance. The bank grants loans to exporters and importers and also provides information about the international market.
                  b.  Small Industries Development Bank of India (SIDBI) : To establish small scale business unit or industry, loan on easy terms can be availed through SIDBI. It also finances modernization of small scale industrial units, use of newtechnology, etc. The main aim of SIDBI is to promote, finance and develop small scale industries.
                  c.  National Bank for Agricultural and Rural Development (NABARD) : It is an apex institution for financing agricultural and rural sectors. For people engaged in agricultural or other activities like handloom weaving, fishing, etc. NABARD can provide credit both short term and long term through regional rural banks.                           
         6.       Regional Rural Banks: These banks were established in 1975 to enhance the banking facilities in the rural areas. In these banks, the features of commercial and co-operative banks are found. These banks are sponsored by some commercial bank. 50% of their capital is provided by the central Government. 35% by the Commercial bank concerned and 15% 'by the state government concerned. The main functions performed by these banks are to provide loans to small traders, small farmers and for the development of agricultural activities.
         7.       Exchange Banks: Exchange banks are mainly concerned with financing foreign trade. Main functions of Exchange bank are remitting money from one country to another country, discounting of foreign bills, helping import and export trade, etc. Bank of Tokyo, Bank of America are examples of exchange banks working in India.
         8.       Indigenous Bankers: In India, Indigenous or native/domestic bankers have been carrying on banking functions for generations before properly organized commercial and other banks started functioning. They mainly deal in "hundis" and promissory notes. They charge a very high rate of interest on loan. Hundis are regarded as native Bills of Exchange.
         9.       Savings Bank: This bank accepts small savings from public who have fixed income. It creates the saving habit among people. In India, post office saving bank is one of the saving banks. Commercial bank and Co-operative Bank also play a role of saving bank.
Make a list of banks operating in your area and classify them according to their functions.

Commercial bank performs diverse types of functions. It satisfies the financial needs of the sectors such as agriculture, industry, trade, etc. It plays a very significant role in a process of satisfying economic and social needs. The functions, performed by banks are changing according to change in time and recently they are becoming customer centric and widening their functions.
Functions of the commercial banks are divided into two categories/types :
1.       Primary Functions
2.       Secondary Functions.
1.       Primary Functions
         A.      Accepting Deposits :
                  The most important activity of a commercial bank is to mobilise deposits from the public. People who have surplus income and savings, find it convenient to deposit the amounts with banks in different types of deposit accounts which are as' follows :
Types of Deposits
         1.       Fixed Deposits : A fixed amount is deposited for a fixed period and it is called fixed deposit account. It is also known as term deposit. The fixed period of time may be from 30 days to 5 years and above. The rate of interest on this account is the highest because the amount accepted is invested elsewhere for a long term by the bank. The depositor is given a fixed deposit receipt. If the depositor is in need of cash before the date of maturity he can get a loan against the deposit.
         2.       Savings Account : This account, as the name suggests, is meant for promotion of savings. Persons having fixed and regular income can deposit their savings in this account. A savings account holder is not permitted to have frequent withdrawals from this account as it is meant for saving. The interest on this account is credited to the account once in every six months.
         3.       Current Account : In this account, a depositor can deposit money any number of time and can withdraw Was and when he requires it. In this account, generally business class deposits the money. Generally, the bank does not pay any interest on this deposit. If the total amount deposited is less than the minimum amount required, then the bank can charge some service charges. Money is withdrawn from this account by cheque. A current account holder enjoys overdraft facility.
         4.       Recurring Deposit Account : In this type of account, a depositor deposits a fixed amount of money every month for a fixed period. The money is deposited on monthly basis. This money cannot be withdrawn before the expiry of a fixed term except in certain conditions. The amount of interest which is received on the money deposited in this account is re-deposited along with the principle. This account attracts higher interest in comparison to other accounts except Fixed Deposit Account.
         5.       Multiple Option Deposit Account : It is a type of Saving Bank Account in which deposit in excess of a particular limit gets automatically transferred into Fixed Deposit. On the other hand, in case adequate fund is not available in our Saving Bank Account so as to honour a cheque that we have issued, the required amount gets automatically transferred from Fixed Deposit to the Saving Bank Account. The balance amount continues as Fixed Deposit and earns interest as per existing rate of interest. One can earn higher rate of interest from a Fixed Deposit Account than from a Saving Bank Account.
B.      Granting Loans and Advances :
         A banker receives money through its deposits at lower rates. Out of these deposits Commercial bank grants loans and advances to the members of the public and to the business community at a higher rate of interest.
         i.        Loans : A loan is granted for a specific time period. The loans are particularly granted to businessmen and members of the public against personal security, gold and silver and other movable and immovable assets. Generally commercial banks grant short term loans. But term loans i.e. loans for more than a year may also be granted. The borrower may withdraw the entire amount in lump sum or in instalments. However, interest is charged on the amount withdrawn or used.
         ii.       Advances : An advance is a credit facility provided by the bank to its customers. It differs from loan in the sense that loans may be granted for longer period, but advances are normally given for a short period of time. The purpose of granting advances is to meet day-to-day requirement of a business. Interest is charged only on the amount withdrawn and not. on the sanctioned amount.
Types of Advances
         a.       Cash Credit : Under Cash Credit system, bank allows the borrower to draw amount upto a specific limit. A limit of certain amount is sanctioned to the customer. The customer can withdraw this amount as and when required. Interest is charged on the amount actually withdrawn.
         b.       Overdraft : Overdraft is a credit facility granted by bank to current account holders. A current account holder is allowed to withdraw more than amount of credit balance in his account. It is a temporary arrangement. Overdraft facility with a specific limit may be allowed either on the security of assets or on personal security or both. Bank charges interest on this facility. A current account shows a debit balance where there is an overdraft.
         c.       Discounting of Bills : A Bill of Exchange is a negotiable instrument. Banks provide short term finance by discounting bills i.e. making payment of the amount before the due date of the bills after deducting certain amount of discount. The party gets the funds without waiting for the date of maturity of the bills. In case the bill is dishonoured on the due date, the bank can recover the amount from the customer.
2.       Secondary functions :
   In addition to the primary functions of accepting deposits and granting loans and advances, banks perform a number of other functions which are called secondary functions. They are the following two types,:
A)      Agency Functions
   Agency functions include the following:
         i.        Collection of Cheques, Dividends and Interests: As an agent the bank collects cheques, drafts, promissory notes, interests, dividend, etc., on behalf of its customers and credit the amount to their accounts.
                  Customers may furnish their bank details to companies where investment is made in shares, debentures, etc. So that the companies can directly send the warrants/cheques to the bank for credit to customer's account.
         ii.       Payment of rent, insurance premiums, etc : The bank makes the payment such as rent, insurance premiums, subscriptions, etc on standing instructions until further notice. Till the order is revoked the bank will continue to make such payments regularly by debiting the customer's account. ECS means electronic clearing system under which one time instruction is given to the bank for debiting/crediting the account.
         iii.      Dealing in foreign exchange: As an agent, the commercial bank purchases and sells foreign exchange for customers as per RBI Exchange Control Regulations.
         iv.      Purchase and Sales of Securities : Commercial banks undertake the purchase and sale of different securities such as shares, debentures, bonds, etc on behalf of their customer. They run a separate 'Portfolio Management Scheme' for their big customers.
         v.       Act as trustee, executor of will, attorney, etc : The bank acts as executives of will. trustees and attorneys. It is safe to appoint a bank as a trustee than to appoint an individual. Acting as attorneys of their customers, they receive payments and sign transfer deeds for the properties of the customers.
         vi.      Act as Correspondent : The commercial banks act as a correspondent of their customers. Small banks even get travel tickets, book vehicles, receive letters, etc. on behalf of their customers.
         vii.     Preparation of Income Tax Returns: They prepare income tax returns arid provide advises on tax matters for their customers. For this purpose, they employ tax experts and make their services available to their customers.
         viii.    Bank Drafts : A Bank draft is a financial instrument with the help of which money can be, remitted from one place to another. Anyone can obtain a bank draft after depositing the amount. in the bank. The bank charges commission for issuing a bank draft. For bank, draft, finds are withdrawn directly from a bank's fund and not from an individual account. It is less risky for a creditor.
         ix.      Underwriting of shares: Underwriting services include guarantee by the bank to the company. In case the company shares are not sold, the bank will take the responsibility of the unsold shares. Bank charges commission for this service.
         x.       Demat Account : Demat account facility has been introduced by commercial banks to facilitate the customers who are shareholders.
         a.  To keep a record of their shareholding in electronic form.
                  b.  To facilitate buying and selling of shares in the share market.
                  A statement  of holding is issued to the account holder periodically for their information and records
                  B)   Utility Functions :
                  Utility functions of Banks include the following :
             i.   Safe Deposit vault/lockers : Safety of valuables like jewels, documents, etc are provided by commercial banks by way of safe deposit vaults or lockers. 'Lockers' are small receptacles (cabinets) which are fitted in steel racks and kept inside 'strong rooms' known as vaults. These lockers are available in half yearly or annual rental basis.
             ii.  Traveller's Cheques : Traveller's Cheques are used by domestic travelers as well as by inteniational travellers. Bank issues travellers cheques to help carry money safely while travelling within India or abroad. Thus, the customers can travel without fear, theft or loss of money. Travellers cheques are more commonly used by international travellers so as to make their travel more safe and convenient.
             iii. Letter of Credit (L/C) : Letter of Credit is a payment document provided by the buyer's banker in favour of the seller. This document guarantees payment to the seller upon presentation of documents mentioned in the Letter of Credit evidencing dispatch of goods to the buyer. The Letter of Credit is an important method of payment in international trade. There are four parties to a Letter of Credit.
                  a.  The buyer or the importer also known as Applicant. r
                  b.  The bank which issues the letter of Credit known as opening bank.
                  c.  The seller in whose favour the Letter of Credit is issued also known as Beneficiary.
                  d.  The Credit receiving bank.
        iv. Provides Trade Information : The commercial banks collect information on business and financial conditions etc for their customers which helps them to plan their strategy in information Trade information service is very useful for those customers going for business. With companies outside the country. It will help traders to know the exact business conditions, payment rules and buyer's financial status in other countries.
        v.  Gift Cheques : The commercial banks offer Gift cheque facilities to the general public. These cheques receive a wider acceptance in India. Under this System by paying equivalent amount one can buy gift cheque for presentation on occasions like wedding, Birthday, etc.
Visit a nearby bank and collect information about banking facilities provided by them to the account holder.

2.2.5  E-BANKING
E-banking refers to electronic banking. E-banking is also called as Virtual Banking or "Online Banking", E-banking is a result of the growing expectation of bank's customers. Under E-banking system, all the working of the banks is done on computerised system. An account holder can deposit or transfer the money through online trading i.e. there is no need to go to the bank to deposit the money or withdraw the money. Um person can transfer his funds from one account to another through e-banking and the person can get information of his account on the computer itself. E-banking system makes the transaction of banking system much faster.
         1.       Automated Teller Machine (ATM) : ATMs are electronic machines which are operated by the customer himself to deposit or to withdraw cash. For using an ATM, the customer has to obtain an ATM card from his bank. The ATM card is magnetically coded. It can be easily read by the machine. To operate an ATM card, the customer has to insert the card in the machine, he has to enter the password (number). ­If the authentication or password is correct, the ATM permits a customer to make entries for withdrawal or for deposit. On completion of the transaction, the customers card is ejected from the machine    .
                  ATM provides 24 hours service and convenience for the bank customers. It is also beneficial for travellers as they can withdraw money from anywhere in the country or outside the country. ATM provides privacy in the banking transaction, so it is safe ail not risky.
         2.       Credit Cards : Credit Cards (VISA or MASTER CARD) are issued by tlie bank to flie persons who may or may not have an account in their bank. Credit cards are used to make payments for purchase so that the individual does not have to carry cash. Banks allow certain period to the credit card holder to make payment of the credit amount. The bank may charge a high rate of interest if payment is not done till the due date.
         3.       Debit Card : Banks are now providing Debit cards to their customers having savings or current account in the banks. The customers can use this card for purchasing goods and services at different places instead of cash. The amount paid through debit card is automatically debited from the customer's account.          
         4.       Electronic Fund Transfer (EFT) : Under this system, money can be transferred from one account to another account. There can be Direct credits, which includes dividend on shares, interest on debentures, commission, salary, pension, etc. and Direct debits which include telephone and electricity bills, loan instalments, insurance instalments, credit card dues, etc.
         5.       Core Banking : 'Core Banking Solution' or 'Centralised Banking Solution' is popularly known as CBS. CBS is that banking system which makes banking convenient by changing the status of a customer from 'Customer of a Branch' to 'Customer of the Bank' facilitating speedy and effective banking anywhere and at all times. In this system, a customer by opening a bank account in one branch (which has CBS facility) can operate the same account in all CBS branches of the same bank anywhere across the country.
         6.       Internet Banking : Computer and Internet are commonly used by the people. So as to facilitate them, banks have started transactions over internet. The customer having an account in the bank can log on to the banks website and access his bank account. He can make payments for bills, give instructions for money transfers, fixed deposits, collection of bills, etc.
         7.       Phone Banking : Customer of the bank having an account can get information of his account, make banking transactions like fixed deposits, money transfers, demand draft, collection and payment of bills, etc. by using telephone. As most of the people are using mobile phones, phone banking is possible through mobile phones. In mobile phone, a customer can receive and send messages (SMS) from and to the bank in addition to all the functions possible through phone banking.
         8.       National Electronic Funds Transfer (NEFT) : NEFT refers to a nation-wide system that facilitates individuals, firms and companies to electronically transfer funds from any bank branch to any individual, firm or company having an. account with any other bank branch in the country, NEFT settles transactions in batches. The settlement takes place at a particular point of time. All transactions are held till that time. e.g. NEFT settlement takes place 6 times a day during the week days (9.30 am, 10.30 am, 12.00 noon, 1.00 pm, 3.00 pm, 4.00 pm) and 3 times during Saturdays (9.30 am, 10.30 am, 12.00 noon). Any transaction initiated after a given settlement time will have. to wait till the next given settlement time.
         9.       Real Time Gross Settlement (RTGS) : RTGS refers to fund transfer system where transfer of funds takes places from one bank to another on a `Real Time' and on `Gross' basis. Settlement in `Real Time' means payment transaction is not subjected to any waiting period. The transactions are settled as soon as they are processed. `Gross' settlement means the transaction is settled on one to one basis without bunching or netting with any other transaction. This is the fastest possible money; transfer system through the banking channel. The RTGS service for customers is available from 9:00 am to 3.00 pm on week days and from 9.00 am to 12.00 noon on Saturdays.

2.3.1  Introduction
Insurance is a protection against financial loss arising on the happening of an unexpected event. As an individual's life is subject to various risks in personal life, death by accident or premature death. In business, person's business property is subjected to loss by fire, theft and natural calamities. Insurance is a device by which loss suffered from various risks to an individual can be minimised. Insurance provides indemnification against loss arising from happening of some event.

2.3.2  Meaning
Insurance is a contract entered between two parties i.e. the company assuring in the contract of insurance to compensate is known as insurer/assurer. While the person to whom such assurance is given is known as insured/assured. In this contract the insurer is free to compensate for the specific loss to the insured who is in consideration of which pays insurance premium.

2:3.3 Definition  
         1.       A contract of insurance maybe defined as "a contract between two parties whereby the insurer agrees to pay to the insured a certain sum of money on the happening of certain events or agrees to indemnify the insured or assured from losses arising from certain specified events."
         2.       According to Insurance Act of 1938, Insurance is defined as "A provision which a prudent man makes against inevitable contingencies."
·         Insured : The person to whom a compensation is to be paid, in case of loss is called the insured.
·         Insurer : The company that agrees to pay compensation on the happening of a specific event against the payment of regular premium is called the insurer.
·         Premium : Fixed amount to be paid to the insurer by insured.
·         Policy : The statement of contract between the insured and the insurer. It contains the terms and conditions of the insurance contract.
·         Subject matter of Insurance : It refers to the subject against which the policy is taken.
    a.  In life Insurance, the life of the assured is a subject matter.
    b.  In fire Insurance, the goods and assets or property of the insured is the subject matter.
    c.  In marine insurance, the cargo or ship is the subject matter.
·         Claim : It is the demand made by the insured on the insurer to compensate for loss on the happening of the event.
·         Proposal : If is a written request by the propose (insured) to the insurance company to issue an insurance policy.

   Insurance is a contract between two parties. Hence, all the elements of a valid contract should be present in every insurance contract. Besides these elements, there are certain other principles also to be followed essentially at the time of entering into an insurance contract, which are as follows :  
         1.       Principle of Utmost Good Faith (Uberrimae Fidei) : All types of insurance contracts requires utmost good faith towards each other. The insurer and the insured must also disclose all material facts, clearly, correctly and completely.
                  If the insurer finds that certain material facts relating to the contract was not disclosed the insurer may avoid the contract, this principle is more important for life Insurance as the information disclosed will affect the decision of the Insurance Company to decide whether to accept or reject the proposal. e.g. Mr. A takes Insurance Policy for Rs. 10 Lakhs for himself. He had not disclosed his medical illness (heart problem) in the contract. Mr. A died with a heart attack after 2 years of taking the policy, The insurance company comes to know about Mr. A's illness only after his death. Under these circumstances, Insurance company is not liable to pay any amount to the dependants of Mr. A, as the contract between Mr. A and insurance company is void. Mr. A did not follow the principle of utmost good faith. Hence, the insurance company, can cancel the contract.
         2.       Principle of Insurable Interest : The insured must have insurable interest (financially) in the subject matter of insurance. In Life Insurance it refers to the life insured. In Fire and General Insurance, it must be present at the time of occurrence of loss and in Marine Insurance, the insurable interest exists only at the time of the occurrence of the loss. The owner of the contract is said to have insurable interest as long as he is the owner. It is applicable to all contracts of insurance. Following are, the cases of insurable interest.
                  a.            A person has insurable interest in his own life arid his property.
                  b.       A wife has insurable interest in the life of her husband.
                  c.       A businessman has insurable interest in the goods he deals with and in the business property.
                  d.       A creditor has insurable interest in the life of the debtors to the extent of loan given.
                  e.       A partner has insurable, interest in the life of other partners (partnership firm).
                            The subject matter of insurance must be a physical object and must be subject to risk. Absence of insurable interest will make the contract of insurance invalid. Insurable interest must be present at the time of taking the policy and at the time of making the claim. e.g. Owner of the house has insurable interest in his house, therefore, he insures the house.
         3.       Principle of Indemnity : Indemnity means a guarantee or assurance to put the insured in the same position in which he was immediately prior to the happening of the uncertain event. The insurer undertakes to make payment of actual loss incurred by the insured.  
                  Insurance contract is signed only for getting protection against unpredicted financial losses arising to the future uncertainties. Insurance contract is not made for making losses arising due to the future uncertainties. Compensation is paid in proportion to the losses incurred. The amount of compensation is limited to the amount assured or the actual loss, whichever is less. It is applicable to fire, marine and general Insurance. However, in case of life insurance, the principle of indemnity does not apply because the value of human being cannot be assessed in monetary terms. e.g. If a person has insured his property for Rs. 3 lakhs and it is destroyed by fire and actual loss is worth Rs. 2 lakhs then he will be paid the actual loss of Rs. 2 Lakhs.
         4.       Principle of Contribution : This principle is a corollary to the principle of indemnity. It is applicable to all contracts of indemnity. Under this principle the insured can claim the compensation only to the extent of actual loss either from any one insurer or all the insurers. If one insurer pays full compensation then that insurer can claim proportionate claim from the other insurers. e.g. (i.) Mr. Raj insured his house worth Rs. 60 lakhs with three insurance companies. A. Co. Ltd. Rs. 10 lakhs, B. Co. Ltd. – Rs. 20 lakhs and C. Co. Ltd. – Rs. 30 lakhs. At the time of loss incurred, the compensation will be paid by the insurance companies in the ratio of 1:2:3. (ii.) Mr. S Insures his property worth Rs. 1 lakh with 2 insurers, with A. Co. Ltd for Rs. 90,000 and with B. Co. Ltd for Rs. 60,000. Mr. S actual property destroyed is worth Rs. 60,000 then Mr. S can claim the full loss of Rs. 60,000 either from A. Co Ltd or B. Co. Ltd. Or he can claim Rs. 36,000 from A. Co. Ltd and Rs. 24,000 from B. Co. Ltd in the ratio of 3:2.
         5.       Principle of Subrogation : According to principle of Subrogation, after the insured is compensated for the loss due to damage to property insured then the right of ownership of such, property passes on to the insurer. This principle is corollary of the principle of indemnity and is applicable to all contracts of indemnity. This principle is applicable only when the damaged property has any value after the event causing the damage. The insurer can benefit out of subrogation rights only to the extent of the amount he has paid to the insured as compensation. e.g. (i.) A person has insured his furniture for Rs. 50,000 against fire and a part of the furniture was destroyed by the fire and the actual loss was Rs. 35,000. Applying this principle, a compensation of Rs. 50,000 will be paid by the insurer and he will take charge of the remaining furniture. (ii). Mr. A insures his house for Rs. 1 Crore. The house is totally destroyed by the negligence of his neighbour Mr. B. The insurance company shall settle the claim of Mr. A for Rs. 1 Crore. At the same time, it can file a lawsuit against Mr. B for Rs. 1.2 Crores., the market value of the house. If Insurance Company the case and collects Rs. 1.2 Crores from Mr. B, then the insurance company can retain Rs. 1 Crore (which it has already paid to Mr. A) plus other expenses such as court fees, etc. The balance amount, if any, will be given to Mr. A, the insured.
         6.       Principle of Mitigation of loss : Under this principle, insured must always try his level best to minimise the loss of his insured property, in case of uncertain events like fire outbreak, blast etc. The insured must take all possible measures and necessary steps to control and reduce the losses. The insured must not neglect and behave irresponsible during such event just because the property is insured. Hence, it is responsibility of the insured to protect his insured property and avoid further losses. e.g. Mr. A's house is on fire due to an electric short circuit. In this tragic incident, Mr. A must try his level best to stop the fire by all possible means like calling fire brigade, use fire extinguishers (if available), etc. He must not remain inactive and watch his house burn; only because it is insured.
         7.       Principle of Causa-Proxima (Nearest Cause) : Principle of Causa-Proxima means when a loss is caused by more than one causes, the proximate (nearest) cause should be taken into consideration to decide the liability of the insurer. The property may be insured against some causes and not against all causes, in such an instance, the proximate cause of loss to be found. If the proximate cause is the one which is insured against, the insurance company is bound to pay the compensation and vice versa. e.g. A ship was insured against losses resulting from collision. There was a collision and the ship was delayed for a few days. Due to the delay, a cargo of Mangoes in the ship became rotten and unfit for consumption. Now, there are two causes of loss; collision and delay, but the nearest / proximate cause for rotten mangoes was delay. As the ship was insured against collision and not delay, the insured will not get any compensation from insurance company.      

A.      Life. Insurance
         B.      Fire Insurance    
C.      Marine Insurance

Meaning :
Under Life Insurance contract, the human life is insured against death, old age, sickness, accident etc. Life insurance contract is not a contract indemnity. Therefore, the insurer has to pay a definite sum on the maturity of the policy. The sum has to be paid after the death of insured or at the expiry of the term.
Life Insurance is not for the person who passes away, but it is for those who survive. It is the responsibility of every earning member to guard against the events that could affect the family in the unfortunate circumstances of his demise. Thus, having a Life Insurance policy is very vital.
Definition :
         Life Insurance can be defined as "A contract where an insurance company undertakes in consideration of regular payment of premium to pay a certain sum of money to the assured on maturity of policy or death, whichever is earlier".
         1.       Whole Life Policy : The whole life of a person is insured under this policy. The insured cannot receive the money from the Insurance Company till he is alive. The rate of premium is normally very low. The money becomes payable on the death of the insured person to the nominee or the legal heir of the deceased policy holder. This policy is mere beneficial for the family of the deceased, as it provides financial assistance to the family after the death of the insured person.
         2.       Endowment Insurance Policy : Under this policy, insurance is taken for a specific period. The sum assured along with bonus is given on his death to the dependents of family or on the expiry of the specific period, the insured himself receives the sum assured along with bonus. It is a popular plan as it protects the family of the deceased or provided old age pension to the insured.
         3.       Term Insurance Policy : Term Insurance policy is taken for a specific period., It. has lowest; premium among all Insurance plans. Premium is fixed and does not change during the term of the policy. In case of an untimely death, the dependents will receive the benefit amount specified in the term life insurance agreement.
         4.       Money-Back Policy : Money-Back policy provides a regular percentage of the sum assured during the life time of the policy and also guarantee the benefit of full sum assured in the event of the death of the insured to the dependents of the family. This policy is for those people who like to haves savings and Insurance Cover.
         5.       Joint Life Policy : Under Joint Life Policy, two or more persons are jointly assured. The person who takes Joint Life Policy must have insurable interest in each other. It is useful for individuals having common interest, requiring joint safety and security to their lives. It can be taken by the partners of the firm or husband and wife. The sum assured is payable at the end of the specified term or the first death of either of the two lives assured, if earlier.         
         6.       Annuity Policy : The insured has to pay the premium in lump sum or instalments over a certain period of time. The insured will receive back a specific sum periodically from a specified date onwards, either for life or for a fixed number of years. Generally, life annuity is opted by a person having surplus wealth and wants to use this money after his retirement.
         7.       Pension Plan Policy : Pension Policy is different from all other forms of life insurance, as it does not provide any life insurance cover but merely offers a guaranteed income either for a life or for a certain. period. Therefore, this type of insurance is taken so as to get income after retirement.
         8.       ULIP (Unit Linked Insurance Plans) : ULIPs is introduced by the private companies and are very popular as they combine the benefits of life insurance policies with mutual funds. A certain part of the premium is invested in listed equities or debt funds or bonds and the balance is used to provide for life insurance and fund management expenses.

Visit to your nearest LIC branch and inquire about the insurance policies your family can take.
Meaning :
   The Fire Insurance protects the insured against the risks of fire. Any property which is subject to damage by fire can be insured against fire. The loss due to fire, lightning and explosion is also covered by Fire Insurance.
Fire Insurance is for protection and not for profit. The amount of premium of fire insurance depends upon the value of subject matter, place of storage and extent of risk involved. Fire Insurance protects against the risk of damage by fire to property arid assets.
Definitions :
         1.       A fire insurance contract may be defined as an agreement whereby one party, in return for a consideration, undertakes to indemnify the other party against financial loss to property or assets due o fire.
         2.       According to Indian Fire Insurance Act, 1938 : "In addition to other insurances, fire insurance is that insurance contract which takes place against fire and such other risks which are mentioned in the fire insurance contract."
         1.       Valued Policy : This is a type of policy where the value of the subject matter of Insurance is agreed upon at the time of making the contract. The insurer has to pay a specified amount or value irrespective of the amount of loss caused due to fire. Valued policy is taken for those goods whose value becomes difficult to calculate in case of loss by fire. This types of policy can be taken for art work, paintings, etc where the value of the damaged articles become difficult to assess/measure.
         2.       Average Policy : It is a policy which contains an average clause. If the subject matter is not insured as per the exact market value or undervalued, then the insurer is liable to pay that percentage of the loss for which it is insured. e.g. If a policy is taken for Rs. 50,000 against the market value of Rs. 100,000. The loss incurred due to fire is Rs. 40,000, then the insurance company will pay Rs. 20,000 (50% of Rs. 40,000).
         3.       Specific Policy : In case of a specific policy, the property is insured for a definite sum irrespective of the market value. If there is a loss, the stated amount will have to be paid to the policy holder. But the actual value of the subject matter is not considered in this respect. e.g. A property of value Rs. 100,000 is insured for Rs. 60,000 and the loss due to fire is Rs. 30,000 then the insurance company will pay Rs. 30,000 in full as compensation.
         4.       Floating Policy: This policy can be taken for those goods which are lying indifferent localities or godown or warehouses since the quantity of goods lying at different places fluctuate from time to time, it becomes difficult for the owner to take specific policy so businessmen and traders take fluctuating policy. Such a policy is usually taken under one sum and one premium for goods lying at different places.
         5.       Comprehensive Policy : Comprehensive policy covers all types of risks like fire, burglary, riots, explosion, strikes, etc. This policy is also called as all in one policy. This type of policy is not popular in India but very popular in the countries like UK, USA, etc.
         6.       Excess Policy : Excess policy is taken when the value of the stock in the market constantly fluctuates. In such an instance it is not advisable to take one policy of certain sum, but instead two policies can be taken.
         i.                  One policy is for a minimum amount below which value of the stock never falls.
         ii.       Another policy for a difference/excess amount (for a maximum amount of stock) by which price fluctuates. e.g. If the value of stock ranges between Rs. 100,000 and Rs. 130,000, then one policy is taken for Rs. 100,000 and another policy for excess amount i.e. Rs. 30,000.
         7.       Reinstatement Policy : This is a type of Fire Insurance Policy where the insurer undertakes to replace the property or goods lost by fire. In this policy instead of paying compensation for the property by fire, the property is replaced. While paying compensation, the depreciation amount property is not taken into consideration. The rate of premium is higher in Reinstatement Policy.
         8.       Blanket Policy : Blanket Policy covers all fixed and current assets of the assured in one policy. Under this policy all the assets lying at different places are covered under one premium and one policy.

C.      MARINE INSURANCE                          
         Marine Insurance gives protection against losses caused due to the dangers of the sea. Marine Insurance is very useful for foreign trade i.e. for exporters and importers. It has become mandatory for exporters and importers to insure their goods. It also covers the loss or damage to the passengers in cruise during journey on the sea. Marine Insurance covers the dangers of the sea such as sinking of the ship, storm, fire, explosion in the ship, crashing with icebergs, pirates, etc.
Definitions :
         1.       According to Marine Insurance Act, 1963 "An agreement whereby the insurer undertakes to indemnity the assured, in the manner and to the extent thereby agreed, against losses incidental to marine adventure. It may cover loss or damage to vessels, cargo or freight."
         2.       Marine Insurance can be defined as a contract under which the insurer undertakes to indemnify the insured against the losses incidental to marine adventure.
         1.       Voyage Policy : It is a policy in which the subject matter is insured for a particular voyage irrespective of the time involved in it. In this case, the risk begins only when the ship starts on voyage. e.g. Voyage from Mumbai to New York.   
         2.       Time Policy : Time Policy is one in which subject matter is insured for a definite period of time against the perils/dangers at sea. A time policy cannot be for a period exceeding one year, but it may contain continuation clause. The continuation clause means that if the voyage is not completed within the specified time, the risk shall be covered until the voyage is completed or till the arrival of the ship, at the port.
         3.       Mixed Policy : This policy is the combination of time and voyage policy. It therefore, covers the risks for both, particular voyage and for a specified period of time. e.g. A policy can be taken from Mumbai to New York for 40 days voyage starting from 1st February 2012.
         4.       Valued Policy : Under this policy, goods are insured for an agreed value between the insurer and insured. This is applicable, when it becomes difficult for the insurer to assess the value of the goods. In case of cargo this value means the cost of goods plus freight and shipping charges plus 10% to 15% margin for anticipated profits. This agreed value is more than the actual value of goods.
         5.       Floating Policy : Floating Policy is taken for large sum covering several shipments. This policy is mostly taken by exporters in order to avoid trouble of taking out a separate policy for every shipment. This policy covers several shipments till the amount insured is exhausted.
         6.       Blanket Policy: Under blanket policy, the maximum limit of the required amount of protection is estimated which is purchased in lump sum. The amount of premium is usually paid in advance. This policy describes the nature of goods insured, specific route, ports and places of voyages and covers all, the risks accordingly.
         7.       Port Risk Policy : Port risk policy covers all the risk of a vessel while it is anchored at the port for a particular period of time. This policy is applicable till the departure of the vessel from the port.
         8.       Composite Policy : This type of policy is purchased from more than one insurers. The liability of each insurer is separate and distinct. This policy is taken when the amount of insurance is very high.

         2.4.1  Meaning :
Commerce includes trade and aids to trade. Communication is the main aid to trade. Communication is an art of exchanging ideas, facts, information. etc. from one person to another. The process of passing any information from one person to the other person with the help of some medium is termed as communication. Communication process is a simple process where a message is being transferred from a sender to the receiver. The receiver after receiving the message understands the message in the desired form and then acts accordingly.
There are different types of communication like post, telephone, internet, mobile phone, TV and media, Radio, press media, etc.

2.4.2  POSTAL SERVICES (Traditional Modes of Communication)
         Introduction :
         Postal services originated with the necessity of communicating written messages. In the past, one could exchange messages in writing, by sending with an individual known as "runners". Even trained pigeons were used to carry letter from one place to another.
         In India, till 1837, the postal service was used solely for sending official mail. After 1837, the postal services were made available to the public. Post offices offered several other services including remittance of money, delivery of parcels, banking, insurance and many other services.
The department of post comes under ministry of communication and information Technology and operates the largest postal network in the world. With 1,55,333 post offices, Indian post employs over half a million people and services over 300 million customers each year.
The services of carrying letters and parcels, arranging remittance of money, accepting deposits of money, etc are the various services offered by the post office which can be used by the public. All these services are known as postal services. Postal Services are administered by Government of India throughout the country and the charges for all these services are minimal; which the common man can afford. It is a most dependable means of written communication.

Mail Services is one of the main services of post office that deals with collection of letters and parcels from the sender to distribute among the receivers. Indian postal service deals with both inland and international mails.
1.       Post Card : post card is the cheapest means-of written communication. It is a card on both sides of which we can write our message. It has a specified space to write the address of the receiver. In the post office, two different types of post cards are available. One is 'ordinary post card' and the other, is 'competition post card'. While ordinary post. cards are used for writing letters, competition post cards are used to send reply to questions asked in various competitions announced through radio, television, newspapers and magazines.
2.       Inland Letter Card : Like post card, written message can also be send using inland letter card. This card is sold by post offices and is commonly used for sending messages within our country. Unlike post card, the written portion of the inland letter card is folded and sealed. Only names and addresses of the receiver and the sender remain open. Thus, these ensure secrecy of the message. However, no enclosure is allowed inside the inland letter cards. A special type of card just like inland letter card is used for sending messages to foreign countries. It is known as "aerogram".
3.       Envelope : As post cards are not suitable for sending confidential messages and in inland letter card it is not possible to send any enclosure although it ensures secrecy of the message. If one wants to send an application or bio-data seeking .employ rent in any organization, a postal envelope or an ordinary envelope with postage stamps affixed on it can be used for sending enclosures. It is a small size paper packet having one side open. After keeping your enclosure in it, you need to close it and sent it to the receiver.
4.       Parcel Post : The postal facility through which articles can be sent in the form of parcels is known as Parcel Post. It provides reliable and economical parcel delivery service. Under parcel post services, parcels of specified size and weight can be sent across the country as well as outside the country. Postal charges vary according to the weight of the parcel. Separate postage is to be paid for inland and foreign parcel post.  
5.       Book Post : Printed materials, printed books, periodicals, greeting cards can also be mailed as book post. Under book post, envelopes containing books or documents should only be closed but not sealed. It should be mentioned on the face of the envelope as "Book Post". The postage on Book post mails is less than the postage on sealed envelopes.
6.       Telegrams : Telegrams is an important medium of sending messages to distant places. Whatever message the sender writes in the telegram, it is communicated in the same form to the receiver. First of all the message is communicated by one post office to the other post office situated nearest to the place of the addressee. From there a postal employee takes the message to the house of the receiver. The expense on the telegram is calculated on the basis of the words written in the message.
7.       Telephones : In India, telephone service was started by the post and telegraph department in 1881. Talking to a person in the same city is called a local call and. talking to a person in some other city is called a trunk call. Telephone is the best medium for quick communication both in and outside the country. These days the telephone service is being provided by The Videsh Sanchar Nigam Ltd. (VSNL), Bharat Sanchar Nigam Ltd. (BSNL) etc. Mostly business messages are communicated through the medium of the telephone.

Post offices also offer various mail services having some extra advantages like sending mails faster, ensuring certainty of delivery of mails, compensating the sender in case of loss or damage to the mail during transit, etc. One can avail of the benefit of all these facilities by paying additional postage.
         1.       UPC (Under Postal Certificate) : When ordinary letters are posted, the post office does not issue any receipt because we generally drop in the letterbox of the post office in the locality. However, if a sender wants to have a proof that actually the letters are posted, then a certificate can be obtained from the post office on payment of prescribed fee. This is called 'certificate of posting'. A completed letter with all details is given in the Post Office. The post office will put its seal on that paper and return to the sender. This paper now serves as an evidence of posting the letters. UPC is written on the face of the envelope.
         2.       Registered Post : The post office offers registered post facility through which one can send our letters and parcels. These mails are handed over to the post office affixing additional postage as. registration charge. On receiving the mail the post office immediately issues a. receipt to the sender, which also serves as a proof that the mail has been posted. "Acknowledgement Due Card" can be sent along with the registered mail. This form is signed by the receiver (addressee) on delivery of the article and returned to the sender by post. The envelope must be superscribed as 'Registered post AD'.
         3.       Insured Post : While mails are in transit they can get damaged or lost, resulting in a loss to the sender. In case of ordinary letters, registered letters or parcels, post office cannot be held liable for any loss or damage to the article. However, there is a provision that a sender can insure the letter or parcel, so that, in case of any loss or damage to the letter or parcel, the post office shall compensate for it. Thus, insured post is a type of mail service through which valuable articles may be sent after insuring these upto a specific amount. The insurance premium is paid to the post office according to the ,value for which the mail is insured.
         4.       Speed post : Sometimes because of some urgency or to avoid delay we want our mail should reach the addressee at the earliest. Here post office provides time-bound as well as guaranteed mail delivery through its Speed Post Service. Under this service; letters, documents and parcels are delivered faster i.e. within a fixed time frame. This facility is available at specific post offices. The post office charges relatively more postage for speed post than that of ordinary mail and it varies according to distance.
         5.       Post Restante : When it is necessary to send letter to a person whose exact address is not known you can send it to the postmaster of that area in which the receiver-resides. These letters are called Post Restante Letters. While sending such letters you have to specifically mention post restante' or `care of postmaster' on the face of the letters. With this indication the letter will be retained at the post office at the receiving end and delivered to the addressee on his calling the postmaster concerned. The post office at the receiving end retains such letters for a maximum period of 14 days. Then it is returned back to the sender or to the Return Letter Office. This facility is particularly suitable for tourists and traveling salesmen who are not sure about their address in a particular place or for any other person looking for a fixed address at a new place.
         6.       VPP (Value Payable by Post) : The value payable by post is for the persons who wish to pay for articles sent to them at the time of receipt of the articles and also to meet the requirements of traders and others who wish to recover through the agency of post office, the value of the article supplied by them. Registered parcels, registered letters, registered book packets and newspapers repaid with postage of newspaper rates of postage and with registration fee may be transmitted by inland post as value payable postal articles. The amount specified for remittance to the sender should not exceed Rs. 1000.

       1.       Money Order : A money, order is an order issued by the post office for the payment of a sum of money to the person to whom it is sent through the post office. A 'payee' is the person named in money order as person to whom the money is to be paid. The advantage of sending money to someone through money order is that the money is delivered at the house of the receiver.
       2.       Instant Money Order : Indian. post presents Instant Money Order (IMO) the instant on-line money transfer service which is convenient, reliable and affordable. IMO is an instant web based money transfer service through which one can transfer money from Rs. 10,000 to Rs. 50,000 from designed IMO post offices. It is simple to send and receive money.
       3.       International Money Transfer : Money transfer service scheme is a quick and easy way of 'transferring personal remittances from abroad to beneficiaries in India. Only inward personal remittances into India are permissible. No outward remittance from India is permitted. Money transfer is now available through post offices in India, which helps in instant remittance of money from around 195 countries to India. The receiver can collect the money within minutes after the sender has made the remittance. This service is helpful to NRI dependent families in India, visiting International tourists and foreign. students studying in India.   
       4.       Money Gram : The department of Post has entered into an International Co-operation Agreement with Money Gram payment system, Inc., USA to offer to the general public, the Money Gram international. Money Transfer service through selected post offices in India. This service has started from 29th September, 2011.
       5.       Money Order Videsh : Money Order Videsh is a new offering of Indian post to facilitate remittances to foreign countries and receiving the remittances from foreign countries through the medium of post office. This service was started from 24th October, 2009. These services are offered through head post offices.
       6.       Electronic International Money Order Services : International Money remittance between people of India and the UAE became easier after India Post and Emirates Post, UAE signed an agreement to launch Electronic International Money Orders through postal network using secure International Financial System (IFS) of the UPU (Universal Postal Union) from February, 2008.
       7.       Foreign Exchange Services: Many Indians go abroad for travel, studies and business and also large number of foreign tourists visit India on vacation and business. The need arose for a reliable and quality service provider for purchase and sale of foreign exchange. At many, places, there- is no bank or facilities to avail foreign exchange. India Post with a network of more than 1.5 lakh post offices is best to offer forex services in an efficient and economical manner. Now Indian post in association with HDFC Bank, provides Forex services through selected Post Offices in India.

       1.       Bill Mail : Communication, in the form of financial statements, bills, monthly accounts Bills or any such other items of similar nature may be posted by services provider to customer at least once in 90 days under this service.
       2.       Retail Post : Retail Post includes services like collection of electricity bills, telephone bills, insurance premium, collection of taxes and fees for the government, etc. Further under Retail Post, the post office sell 'Application forms of UPSC, SSC, AFMC, Universities, etc., thus providing convenience to the common man in getting applications for various examinations.
       3.       E-Payment : The most convenient way to pay bills under one roof. India Post specializes in acceptance of payment across the counter. E-Payment is a 'Many to One' service through which bills i.e. telephone, electricity, ICICI, etc are paid by customers in post offices.
Visit your nearest post office and inquire about the procedure and facilities available for sending and receiving money.

During the last few years many modes of communication have been developed. With the help of these mediums messages can be communicated to other places quickly, safely and confidentially. These services are two types:
         1.       Courier Services : A Courier is a person or company who delivers messages, packages -and mail. Courier are different from ordinary mail services by features such as speed, security, tracking, signature, specialization of express services and swift delivery times. As a premium services, courier are usually more expensive than usual mail services: Different courier services operate in different towns and cities to regional, national and global services. The world's largest courier companies are DHL, FedEx, TNT, UPS and Aramex.
         2.       Electronic Services : Technological development has made it possible to exchange messages with the help of many electronic services. The sending of a message has never been easy as in the case with electronic services. The popular electronic services are as follows:
         i.        Fax : It refers to that electronic machine through which a written message can be sent to any part of the world at the utmost speed. This service is available for all the 24 hours. The written message reaches its destination the moment it is inserted in the fax machine.
         ii.       Internet : The information technology has covered a long distance and reached a stage when the whole world seems to have confined itself in a single room.
                  The popularity of the Internet is growing every day. The simple reason for it is that the amount of information received through it is very large. It has the capacity to satisfy the needs of the children, the youth and the old.
         iii.      E-mail : E-mail is that system of electronic letter exchanging in which through the medium of internet the messages are exchanged on the computer. The message can be long as well as short. With regard to e-mail messages, the immediate presence of the receiver is not necessary. The messages kept on gathering on the computer of the receiver. We can look at them, read them and get them printed whenever we desire. We may keep them stored in his computer or erase them.

India is the world's fastest growing industry in term of Wireless connections after China, with approximately 811.59 million mobile phone subscribers. According to the world telecom industry, India will have approximately 1.2 billion mobile subscribers by 2013. The numbers of subscribers will exceed the total subscribers count in China, by 2013.
In 1851, telecom was started by British East India Company. A separate department was opened to the public in 1854.
In early 1881, Oriental Telephone Company Limited of England opened telephone exchanges at Calcutta (Kolkata), Bombay (Mumbai), Madras (Chennai) and Ahmedabad. On 28thJanuary 1882, the first formal telephone service was established with a total of 93 subscribers.
In the year 1975, Department of Telecom (DoT) was responsible for telecom services in entire country after separation from Indian Post and Telecommunications. Decades later Mahanagar Telephone Nigam Limited (MTNL) was chipped out of DoT to run the telecom services of Delhi and Mumbai.
In 1990s, the telecom sector opened up by the government for private investment. In 1995, TRAI (Telecom Regulatory Authority of India) was set up. In 2000, the Government of India renamed Department of Telecom as Bharat Sanchar Nigam Limited (BSNL).
In last 10 years many private operators specially foreign investors successfully entered the high potential Indian Telecom market. Globally acclaimed operators like Vodafone, Docomo, Telenor, NTT, Sistema, Maxis, Etisalat, etc. invested in India mobile operations.

         1.       Pager Services : Pager communication was successfully launched in India in the year 1995. Pagers were looked upon as devices that offered the much needed mobility in communications, especially for-business. Motorola was a major player with nearly 80% of the market share. The other companies included Mobilink, Pagelink, BPL, Usha Martin telecom and Easy Call. Pagers were generally worn on the belt or carried in the pocket.
                  Pager Companies in India offered their services in regional languages also. By 2002, Motorola stopped making or servicing pagers when mobile phones were commercially launched in India.
         2.       Mobile Communication : A basic mobile phone (cellular phone or cell phone) is a device that can make and receive telephone calls and send text messages. In 1991, the second generation (2G) cellular technology was launched by Finland, which sparked competition in this sector. Ten years later, in 2001, the three generation (3G) was launched in Japan. In March 2011, South Korea announced that they had expanded its high speed wireless broadband network by 4G covering 85% of the population. In early 2011, 4G mobiles were released by Motorola, HTC and Samsung. Low end mobile phones are subtitled with more advanced phones through the use of native software application known as Smart Phones.
         3.       Broadband Communication : After USA, Japan, India stands third largest Internet users of which 40% of Internet is used via mobile phones. India ranks one of the lowest provider of broadband speed as compared to countries such as Japan, Norway, etc.
         4.       Next Generation Network (NGN) : Next Generation Network, multiple access networks can connect customers to a core network based on IP technology. These access networks include fiber optics or coaxial cable networks connected to fixed locations or customers through Wi-Fi as well as 3G networks connected to mobile users.
         5.       Indian Satellites : India has launched more than 50 satellites of various types, since 1975. The organization working for Indian Satellites is the Indian Space Research Organization (ISRO). Out of 21 satellites launched in the course of the Indian National Satellites (INSAT) programme, 11 are still in operation.

2.5.1  Meaning :
We always need different types of goods in our day-to-day life. We may buy some of these items in bulk and stock them in our house. Similarly, businessmen also need a variety of goods for their use, some of them may not be available all the time, but we may need those goods throughout the year, e.g.
Sugarcane is produced during a particular period of the year. Since sugar production takes place throughout the year, there is a need to supply sugarcane continuously. So proper storage is needed for sugarcane and after production, sugar is. also needed to be stored for sometime before distribution. Storage involves proper arrangement for preserving goods from the time of production till its actual use or consumption. When this storage is done on a large scale in a specified manner, it is called warehousing. The place where goods are kept is called 'warehouse'. Warehousing creates time utility and makes goods available at the time of requirement.

2.5.2  Definition :
A warehouse is defined as "an establishment for the storage or accumulation of goods".
   Warehouses preserve goods on a large scale in a systematic and orderly manner. They provide protection to goods against heat, wind, storm, moisture, etc. and also cut down losses due to spoilage, wastage, etc. This is the basic function of every war house. There are many other functions in addition to these basic functions which are as follows:
         1.       Storage of goods : The basic function of warehouses is to store large stock of goods. These goods are stored from the time of their production or purchase till their consumption or use.
         2.       Protection of goods : A warehouse provides protection to goods from loss or damage due to heat, wind, dust, etc. It makes special arrangements for different products according to their nature. It also helps to reduce the losses due to spoilage or wastages during storage.
         3.       Financing : When goods are kept in a warehouse, the depositor gets a receip which acts as a proof about the deposit of goods. The warehouse, also issues a document in favour of the owner of goods which is called a warehouse-keeper's warrant. The warehouse warrant and receipt are negotiable instrument and can be negotiated by endorsement and delivery. Thus the owner of-the goods can raise finance from banks, financial institutions, etc.
         4.       Risk-Bearing : The entire responsibility of the goods stored in the warehouse is passed to the warehouse keeper, once the goods are handed over to him for storage. Thus, the risk of loss or damage to goods in storage is borne by the warehouse-keeper. Since he is bound to return the-goods in the same condition, warehouse becomes responsible for any loss, theft, damage, etc. Thus warehouses take all precautions to prevent the goods from any loss.
         5.       Grading and Branding : Warehouses also perform the functions of grading and branding of goods on behalf of the manufacturer, wholesaler and the importer of goods. It also provides facilities for packaging of goods for the convenience of handling.
         6.       Processing : Certain commodities are not consumed in the form they are produced. Processing is required to make them consumable. e.g. Paddy is polished, timber is seasoned, fruits are ripened, etc. Sometimes warehouses undertake these activities on behalf of the owners.
         7.       Transportation : Warehouses can provide to the buik depositors. It collects goods from the place of production and also sends goods to the place of delivery on the request of the depositors.
         8.       Time and Place Utility : Warehouses create time utility by preserving the goods till it is demanded. It also creates place utility by providing the goods at the place, where they are required.

Warehouse is a storage structure constructed for the, protection of the quality and, the quantity of the stored goods. A businessman has to keep different kinds of goods, so there is always a need for different types of warehouses, which are as follows.
         1.       Private Warehousing : Private warehouses are owned and managed by the manufacturers or traders to store their own goods. Big business firms which need large storage capacity on a regular basis construct their own warehouses. The private warehouses are licensed to private person only for e goods imported by him or on his behalf are to be stored in such warehouses. Generally these warehouses are constructed by farmers near their fields, by wholesalers and retailers near their business areas and by manufacturers near their factories. The facilities provided therein are according to the nature of products to be stored.
         2.       Public/Commercial Warehouses : This type of warehouses are established to provide storage facilities to the general public for payment of certain fees. It may be owned by an individual, partnership firm, company, etc. These warehouses have to obtain the license from the government and work as per the rules framed by the government. They are generally located near railway stations, highways, airport, seaport, etc. Many facilities are provided. by these warehouses such as packaging, grading, inspection to be done by prospective buyers, etc.
         3.       Government Warehouses : These warehouses are owned, managed and controlled by central and state governments or public corporations or local authorities. It is difficult for the small traders, farmers, businessmen, etc. to own a warehouse, so these government warehouses assist them in storing their goods at a nominal charge. Central Warehousing Corporation of India, State Warehousing Corporation and Food Corporation of India are examples of agencies maintaining government warehouses.
         4.       Bonded Warehouses : Bonded warehouses are licensed by the government for staring imported goods till the custom duty is not paid. They are located near the ports. They are either operated by the government or custom authorities. The warehouse-keeper is required to give an undertaking or Bond that it will not allow the goods to be removed without the consent of the custom authorities. The goods are held in bond and cannot be withdrawn without paying the custom duty.
                  Such warehouses are very useful to importer and exporters. If an importer is unable to pay custom duty after the arrival of goods, he can store the goods in a bonded warehouse And by making payment 11 of custom duty in instalments, can proportionately withdraw the goods. Goods lying in a bonded warehouse can be packaged, graded and branded for the purpose of sale Central warehousing corporation operates 75 custom bonded warehouses.
         5.       Duty Paid Warehouses : If an importer faces any problem in transportation of goods, after making payment of duty, then goods can be stored, at a Duty Paid Warehouses: All duty paid warehouses are public warehouses which are available to all the importers whether big or small. Duty paid. warehouse helps the importers as proper care of goods is taken, processing of goods can be done like sorting, re-packing etc. Such warehouses are more helpful for some businessman, who re-export the goods.
         6.       Co-operative Warehouses : These warehouses are owned, managed and controlled by co­operative societies. They mainly provide warehousing facilities at the rural areas. These type of warehouses are very useful for farmers and traders. They provide warehousing facilities at the most economical rates to the members of the society and also to the public.
         7.       Cold Storage Warehouses : Cold Storage warehouses provide facilities for perishable commodities like fisheries, poultry, dairy products, vegetables, fruits, flowers, etc. In cold storage warehouse, goods are stored and refrigerated at very low temperatures so as to preserve them and use them in the future. International trade for these products has become possible only with cold storage warehouses. e.g. Green Peas produced in India are exported to foreign countries.
Collect the information regarding the products kept in the cold storage warehouse.

2.6.1  Moaning :
In India, transport plays an important role in nation's economy. Since the economic liberalization of the 1990's, development of infrastructure within the country has progressed at a rapid pace and today there is a wide variety of modes of transport by Land, Water and Air are available in India.
Transportation is the movement of people, animals and goods from one location to another. Transport infrastructure consists of the fixed installations necessary for transport, and may be roads, railways, airways, waterways, canals and pipelines and terminals such as airports, railways stations, bus stations, trucking terminals and seaports. Terminals maybe used both for interchange of passengers and cargo and for maintenance.
Indian public transport system are among the most heavily used in the world. India's rail network is the 4th largest and most heavily used system in the world, transporting over 6 billion passengers and over 350 million tons of goods annually.

         1.       Helps in Production : Transport system helps the manufacturer to take the raw materials and other requirements quickly from the places, where it is available to the production centres. It helps the movement of the labour from their houses to the place of their work. It also makes possible quick dispatch and distribution of finished goods to the centres of consumption.
         2.       Expanding Markets : It reduces the gap between the producers and consumers. It helps to cover the wider area of market places by making the goods available, whenever need arises. Transport plays an important role in distribution and marketing of goods. Air transport plays an important role in the success of an international trade.
         3.       Create Place Utility : Transport is useful for carrying the goods from the place of its availability to the place of its requirement. Only, because of transport, it has been possible for the people staying at far places to get the benefit of goods, which are not available near to them. e.g. Apples from Kashmir are transported throughout the country, Mangoes from India are exported to different countries, etc.
         4.       Stability of Prices : Transport helps to maintain the prices of the goods by providing the goods at the proper time and satisfying the consumer demand for the goods. It helps to maintain balance between the demand and supply of goods, which ensures stability of prices. If there is a shortage of goods at a certain place, it can easily be satisfied with the help of efficient transport system.         
         5.       Creates Employment : Transport provides direct employment to transport owners, drivers, mechanics, helpers and so on. It also provides indirect employment by facilitating the movement of goods and people from one place to another. So, it providing direct and indirect employment to 'the number of people.
         6.       Improves Standard of Living : Transport helps people to enjoy a better standard of living by providing them with goods of their choices from faraway places or places of its availability. As transport creates employment it gives an opportunity to people to earn good amount of income. e.g. Imported cars can be transported from foreign countries.
         7.       Cost Reduction : The cost of Production and distribution can be reduced with the help of efficient, cheap and quick means of transport. The goods can be sold at low prices which in turn will increase demand and expand market. Increase in demand for goods can lead to large scale production and demand can be fulfilled by transporting finished goods to the places of its demand for consumption.
               8.           Provides help during Emergency : People are badly affected during natural calamities like foods, earthquakes, landslides, etc. and also during riots, bomb blasts, accidents, fire, etc. Transport helps the people by providing them with the necessities like food, water, medicines, etc. and also helps them to travel to their destinations. Various transport facilities can be used during the time of emergency and rescue operations can be done with helicopters, fire brigades, etc.
         9.       National Defence: Transport plays an important and special role in the defence of the country. An efficient transport network system ensures quick movement of troops, arms and ammunition from one place to another. It also keeps a check on external aggression on the boundaries of the country.
         10.     Economic Development: Economic development of a country depends on a good network of transport system and industrial development. New industries are established where there is a good network of transport. Due to industrialization, employment opportunities have generated standard of living. This leads to increase in demand for goods and services. Increase in demand for goods induces a producer to conduct production on large scale. This all gives rise to economic development of a nation.

Transport is possible through land, air and water, which are called as different modes of transport. On land, we use trucks, tractors, etc. to carry goods, train, bus, cars to carry passengers. In air transport, we have aeroplanes, helicopters to carry passengers as well as goods. In water transport, we have ships, cargo, etc. to carry goods and passengers. All these are known as different means of transport.
Initially, there were traditional means of transport available which are as follows:
         1.       Walking: People used to cover long distances on foot. Walking still continues as an important means of transport in rural areas. MMRDA has commenced the constructions of more 50 skywalks as a part of the Mumbai skywalk project.
         2.       Palanquin : Palanquin also known as palkis, were one of the luxurious methods used by the rich and noblemen for travelling. In the past, it was used to carry a deity or idol of the god. Modern use of the palanquin is limited to Indian weddings and pilgrimage.
         3.       Bullock Carts and Horse Carriages : These were traditionally used for transport; especially in rural india. Today, they are used in smaller, towns and are referred as Tonga or Buggies. Victorias of Mumbai are still used for tourist purpose.
         4.       Bicycles : Bicycles are a common means of travel in most part of India. Along with walking, cycling accounts for 50% to 75% of usage in rural areas. India is the second largest producer of bicyeles in the world. Pune is the first city in India to have dedicated lanes for cycles. It was built for the 2008 Commonwealth Youth Games.
         5.       Hand Puller : This type of transport is still available in Kolkata wherein a person pulls the rickshaw by hand. The Government of West Bengal proposed a ban on these rickshaws in 2005 'describing them as "inhuman".
         6.       Cycle Rickshaw : Cycle rickshaws were introduced in India, in 1940's. They are bigger tricycles, where two people sit on an elevated seat at the back and a person pedals from the front.                                                                                   
         7.       Trams : During British Era, Trams was introduced in many cities including Mumbai and Kolkata. They are still in use in Kolkata and provides an emission-free means of transport.
Different modes of transport includes Rail, Road, Water, Air, Cable, Pipelines and Space which are as follows:
         1.       Road Transport
         2.       Rail Transport
         3.       Water Transport
         4.       Air Transport
         5.       Other Modes of Transport
Make a list of different means of transport available on different occasions.

Roads are the means that connect one place to another on the surface of the land, different vehicles plying on roads like bullock carts, cycles, motorcycles, cars, truck, buses, etc. All of these constitute different means of road transport. Extension of roads of every corner of the country have also enhanced the use of motor driven transport. The types of motor vehicles used to carry goods and passengers include taxis, auto-rickshaws, scooters, vans, buses, tempos and trucks, etc.
The livery of the taxis in India varies from state-to state. In Delhi and Maharashtra, most taxicabs have yellow-black livery while in West Bengal, taxis have yellow livery. Private taxi operators are not required to 6ve a specific livery.
An auto rickshaw is a three-wheeler vehicle for hire that has no doors and is generally characterized by a small cabin for the driver in the front and 4 seat for passengers in the rear.
Buses take up over 90% of public transport in Indian cities, and serve as a cheap and convenient mode of transport for all classes of society. Services are mostly run by state government owned transport corporations. Bus Rapid Transit (BRT) systems and air conditioned buses have been taken by the various state government to improve the bus, public transport systems in cities. Besides these buses, the country also have Double Decker Buses. Double Decker Buses are found in cities like Mumbai, Chennai, Kochi, Trivendrum.
India has a network of National Highways connecting all the major cities and state capitals, forming the economic backbone of the country. All national highways are metalled, but very few are constructed of concrete, the most notable being the. Mumbai-Pune Expressway.
         India has a number of iconic bridges ranging    from the recently constructed Bandra-Worli Sea Link.
         Advantages of Road Transport
Rod transport'has the following advantages.
         i.        It is a relatively cheaper mode of transport as compared to other modes.
         ii.       Perishable goods can be transported at a faster speed by road carriers over a short distance.
         iii.      It is a flexible mode of transport as loading and unloading is possible at any destination.
         iv.      It provides door-to-door service.
         v.       It helps people to travel and carry goods from one place to another, in place which are not connected by other means of transport like hilly areas.
         Limitations of Road Transport
Road Transport has the following limitations.
         i.        Due to limited carrying capacity road transport is not economical for long distance transportation of goods.
         ii.       Transportation of heavy goods or goods in bulk by road involves high cost.
         iii.      It is affected by adverse weather conditions. Floods, rain, landslide, etc., sometimes create obstructions to road transport.
         iv.      There is a possibility of road accidents which are common, mainly on highways.
         v.       It causes pollution due to the use of diesel, which affects the health of people. It also causes noise pollution.

2.       TRANSPORT
Rail services in India, first introduced in 1853, are provided by the state-run Indian Railways, under the supervision of the Ministry of Railways. Indian Railways provides an important mode of transport in India, transporting over 18 million passengers and more than 2 million tonnes of freight daily across one of the largest and busiest rail networks in the world.
Transportation of goods and passengers on rail lines through trains is called rail transport. It occupies an important place in land transport system of our country and is the most dependable mode of transport to carry goods and passengers over a long distance. Besides long distance, local Sport of passengers is also provided by local trains or metro rail in same metropolitan cities.
The Mumbai Suburban Railway is the first rail system in India which began services in Mumbai in 1867, transports 6.3 million passengers daily and has the highest passenger density in the world.
Monorails in India are generally considered as feeder systems for the Metro. The Mumbai Monorail will     be the first monorail in India.     
The first modern rapid transit in India was the Kolkata Metro, with operations started in 1984. Chennai MRTS in 1997 Delhi Metro in 2002. The Namma Metro in Bangalore in 2012. Currently, rapid transit systems have been deployed in these cities and more are under construction or in planning in several major cities of India.
The Indian Railways has also initiated a number of highly ambitious projects to provide connectivity to the remote and inaccessible areas of the country like The Konkan Railway, Mangalore and Mumbai;; Kashmir Railway.
Proposals have been made to introduce high-speed rail in India. A proposal has been made to build a Maglev track within the city of Mumbai, connecting it to the national Capital of New Delhi, as well as other parts of Maharashtra in the form of the Mumbai Maglev.
         Advantages of Rail transport :
Rail Transport has following advantages:
         i.        It is a convenient mode of transport for travelling long distances.
         ii.       It is comparatively faster than road transport.
         iii.      It is suitable for carrying heavy goods in large quantities for long distances.
         iv.      Its operation is less affected by adverse weathers conditions like rain, floods, fog, etc.
         v.       It ensures safety and security of goods. Even costly and delicate goods can be sent by Rail.
Limitations of Railway transport :
Rail Transport has following limitations.
         i.        It is relatively expensive for carrying goods and passengers over short distances.
         ii.       It is not available in remote parts of the country.
         iii.      It provides service according to fixed time schedule and is not flexible for loading or unloading of goods at any place.
         iv.      It involves heavy losses of life as well as goods in case of accident.
         v.       It does not provide door to door services. It does not reach remote areas.

Water transport refers to movement of goods and passengers on waterways by using various means like boats, steamers, launches, ships, etc. With the help of these means goods and passengers are carried to different places; both within as well as outside the country. Within the country, rivers and canals facilitate the movement of boats, launches, etc. Since the goods and passengers move inside the country, this type of transport is called inland water. transport. When the different means of transport are used to carry goods and passengers on the sea route it is termed as ocean transport.
India has an extensive network. of inland waterways in the form of rivers, canals, backwaters and creeks. Freight transport by waterways is highly under utilised in India compared to other larger countries. Cargo is transported in an organised manner is confined to a few waterways in Goa, West Bengal, Assam and Kerala. The Inland Waterways Authority of India (IWAI) is the statutory authority in charge of the waterways in India. The following waterways have been declared as National Waterways:
         1.       Allahabad-Haldia Ganges - Bhagirathi -Hooghly river.
         2.       Saidiya-Dhubri Brahmaputra river.
         3.       Kollam-Kottapuram Champakara and Udyogmandal canals.
         4.       Bhadrachalam-Rajahmundry and Wazirabad-Vijaywada Krishna-Godavari river Kakinada­-Pondicherry canal.
         5.       Mangalgadi-Paradeep and Talcher-Dhamara Mahanadi-Brahmani river.
         Advantages of water transport :
Water Transport has the following advantages:
         i         It is a relatively economical mode of transport for bulky and heavy goods.
         ii.       It is a safe mode of transport with respect to occurrence of accidents.
         iii.      The cost of maintaining and constructing routes is very low as most of them are naturally made.
         iv.      It promotes international trade.
         v.       It protects the goods from sun, rain, wind, dust, etc. as goods are mostly carried in containers, tankers, etc.
Limitations of water transport :
         Water transport has the following limitations.
         i.        The depth and navigability of rivers and canals vary and thus, affect operations of different transport vessels.
         ii.       It is a slow moving mode of transport and therefore not suitable for transport of perishable goods.
         iii.      It is adversely affected by weather conditions.
         iv.      Sea transport requires large investment on ships and their maintenance.
         v.       It has high maintenance costs for ship and tankers as it requires constant repairs and painting of ships.

This is the, fastest mode of transport. It carries goods and passengers through airways by using different aircrafts like passenger aircraft, cargo aircraft, helicopters, etc. Besides passengers it generally carries goods that are less bulky or of high value. In hilly and mountainous areas where other mode of transport is not accessible, air transport is an important as well as convenient mode. It is mostly used for transporting goods and passengers during natural calamities like 6arthquake and flood, etc. During war, air transport plays an important role in carrying soldiers as well as supplies to the required areas. Air transport may be classified as domestic and international air transport. Air transport is carried out in fixed air routes, which connect almost all the countries.
Rapid economic growth in India has made air travel more affordable. Air India, India's flag carrier, presently operates a fleet of 159 aircraft and plays a major role in connecting India with the rest of the world. Several other foreign airlines connect Indian cities with other major cities across the globe.
         Chhatrapati Shivaji International Airport in Mumbai is currently India's busiest airport in terms of passenger traffic.   
         Pawan Hans Helicopters Limited is a public sector company that provides helicopter services to ONGC to its off-shore locations, and also to various State Governments in India particularly in North­east India. There are 40 heliports in India. Indian also has the world's highest helipad at the Siachen Glacier a height of 6400 metre (21,000 ft) above mean sea level.
         Advantages of air transport :
         Air transport has the following advantages.     
         i.        It is the fastest mode of transport.
         ii.       It is very useful in transporting goods and passengers to the area, which are not accessible by any other means.
         iii.      It is the most. convenient mode of transport during natural calamities.
         iv.      It provides vital support to the national security and defence.
         v.       It is less polluting as compared to road transport.
         Limitations of air transport.
It has the following limitations.
         i.        It is relatively more expensive mode of transport.
         ii.       It is not suitable for transporting heavy and bulky goods.
         iii.      It is affected by adverse weather conditions.
         iv.      It is not suitable for short distance travel.
         v.       In case of accidents, it results in heavy losses of goods, property and life.

         a.       Ropeway transport : Ropeway refers to a mode of transport, which connects two places on the hills, or across a valley or river. In the hilly areas, trolleys move on wheels connected to a rope and are used for carrying passengers or goods, especially building materials, food, etc. The famous "Uran Khatola Jagdamba" in Gujarat that carries pilgrims to the temple is an example of ropeway transport, which carries more than 100 passengers at a time.
         b.       Pipeline transport : Pipeline transport sends goods through a pipe, most commonly liquid and gases are sent, but pneumatic tubes can also send solid capsules using compressed air. For liquids/gases, any chemically stable liquid or gas can be sent through a pipeline. Short-distance systems, exist for sewage, slurry, water and beer, while long-distance networks are used for petroleum and natural gas.
         c.       Cable transport : Cable transport is a broad mode where vehicles are pulled by cables instead of an internal power source. It is most commonly used at steep gradient. Typical solutions .include aerial tramway, elevators, escalator and ski lifts; some of these are also categorized as conveyor transport.       
         d.       Spaceflight : Spaceflight is a transport out of Earth's atmosphere into the outer space by means of a spacecraft. While large amounts of research have gone into technology, it is rarely used except to put satellites into orbit, and conduct scientific experiments. However, man has landed on the moon, and probes have been sent to all the planets of the Solar System.


Sr. No.
Point of Distinction
Life Insurance
Fire Insurance
Marine Insurance
A contract whereby the insurance company undertakes to pay a certain sum of money either on death or maturity (whichever is earlier) for a consideration (Premum)
A contract which insurer promises to pay compensation to insured if something happens to the subject matter due to fire or related events.
A contract whereby the insurance company undertakes to pay compensation to the insured in case of loss to him due to dangers (perils) of the sea.
Who takes it
It can be taken by an individual for his own life or for his family members.
It can be taken by exporters, importers and shipping companies.
It can be taken by individuals for their properties or by businessmen for their goods, properties business liabilities, etc.
Subject Matter
In Life Insurance, the life of the Insured is a subject matter.
In Fire Insurance, the goods and assets or property of the insured is the subject matter.
In Marine Insurance, Goods in ship, cargo and freight is the subject matter.
Insurable Interest
It must exist at the time of contract.
I must exist both at the time of contract and also at the time of loss.
I must exist at the time of loss.
The Policy can be issued for any number of years, even until death of the assured.
It is generally for a short period like one year.
It is generally for a short period and may range from one month to a year. Normally, it does not exceed one year.
It is paid either on death or maturity whichever is earlier.
It is paid only if there is loss due to fire during the term of policy.
It is paid only if there is a loss causing event during the terms of the policy.


Sr. No.
Point of Distinction
Life Insurance
Fire Insurance
Marine Insurance
Principle of Indemnity
It is not applicable as a human life cannot be valued in terms of money for calculating the actual loss.
It is applicable as insurance company compensates for the financial loss and the insured is brought back to the same financial condition that he was before the event.
It is applicable as insurance company compensates for the financial loss and the insured is brought back to the same financial condition that he was before the event.
Number of Policies
Insured can take any number of policies on the same life.
Generally, only one policy can be taken. However, double insurance is possible.
Generally, only one policy can be taken. However, double insurance is possible. The beneficiary is the insured person or company.
The beneficiary can be insured (if he survives the selected term) or else the nominee or the legal heir on the death of the assured.
The beneficiary is the insured who has insured the property or goods.
The beneficiary is the insured person or company.
Surrendering of Policy
The policy can be surrendered before the expiry of the term subject to certain conditions.
I cannot be surrendered.
I cannot be surrendered.


Sr. No.
Point of Distinction
Current Account
Savings Account
Fixed Deposit Account
Recurring Deposit Account
It is that account which is maintained by businessman and others who have regular bank transactions.
It is that account which is opened by individuals in order to save a part of their income.
It is that account where a fixed sum of money is deposited for a fixed period
It is that account where depositors can regularly save fixed amount for a specific period.
Customers can withdraw money by cheques.
Customers can withdraw either by cheque or by withdrawals slip.
Customers cannot with draw during the fixed period. If withdrawn earlier, rate of interest will be less than applicable
Customers cannot withdraw during the fixed period. If withdrawn earlier, rate of interest will be less than applicable.
The bank gives a passbook, cheque book, statement of account and pay-in-slip book to the customers.
The bank gives a pass book, cheque book and pay-in-slip book to the customers.
The bank gives a fixed deposit receipt to the customers.
The bank gives a pass book and pay-in-slip book.
Who takes it
It is suitable for traders, businessmen, firms or institutions.
It is suitable for fixed income group, wage or salary earners.
It is suitable for any person with temporary idle cash.
It is suitable for fixed income group.
Constraints on Operations and Withdrawals
There are no restrictions on the operation of a current account as long as there is balance in the account.
The customer have certain restrictions on withdrawals.
Payment is received only on expiry of the fixed period. If withdrawn earlier, then the rate of interest will be less than applicable.
Payment is received after the expiry of the fixed period.


Sr. No.
Point of Distinction
Current Account
Savings Account
Fixed Deposit Account
Recurring Deposit Account
Rate of Interest
Normally, interest is not given
Interest rate if low.
Interest rate is higher. Longer the period, higher will be the rate of interest.
The rate of interest is higher than savings account but less than fixed deposit account.
Nature of Account
It is of continuous nature
It is of continuous nature
90% of the amount of fixed deposit can be given as loan.
90% of the amount in the account can be given as loan.
Temporary overdraft facility is given.
No overdraft facility is given.
It is for fixed period of time except when the fixed deposit receipt renewed.
It is for a fixed period of time.


Sr. No.
Point of Distinction
Road Transprot
Rail Transport
Water Transport
Air Transport
Road transport has limited speed due to bad road conditions, accidents, etc.
It has considerable speed since it runs on tracks which rarely gets disturbed.
It is the slowest mode of transport.
It is the fastest mode of transport.
Carrying Capacity
It has limited carrying capacity.
It has huge carrying capacity.
It has a very huge carrying capacity.
It has limited carrying capacity.

Sr. No.
Point of Distinction
Road Transprot
Rail Transport
Water Transport
Air Transport
Cost of construction and maintenance
It requires limited capital investment in terms of construction of roads, vehicles and their maintenance
The cost of construction of trains, railway tracks is high. Also the maintenance of trains, tracks and stations is high.
It uses waterways which are natural high-ways and hence there is no cost involved. However, there is high cost involved for construction of ships and ports and also maintenance of ships and ports.
It uses airways which are natural and hence there is no cost involved. However, there is a huge cost for constructions of aircrafts and airports. These costs are very high compared to other modes of transport.
Recommended for short distance.
Recommended for both short and long distance.
Suitable for long distances specially across countries and continents.
Suitable for long distances.
Transport Charges
Transport charges are not fixed but are high due to increased fuel prices.
Transport charges are relatively low and are fixed according to the distance.
Transport charges are lowest.
Transport charges are the very high.
Door to door service
It provides door to door service.
It does not provide door to door service.
It does not provide door to door service.
It does not provide door to door service.
Means of Transport
It uses animals, animal carts, motor-cycles three and four wheelers.
It uses passenger and goods train.
It uses boats, big ships, liners, tankers, etc.
It uses aircraft, helicoperters, jets. etc.
It is suitable for transporting the goods in relatively smaller quantities for short distance.
It is suitable for transporting heavy goods in large quantity over long distance.
It is suitable for transporting very heavy goods, machineries in large quantities to any part of the world.
It is suitable for transporting light weight perishable and valuable goods to any part of the world.
Sr. No.
Point of Distinction
Road Transprot
Rail Transport
Water Transport
Air Transport
It provides limited safety to goods from sun, rain, wind, etc.
Goods are kept in locked wagons which provides protection against sun, wind, rain etc.
Goods are safe as they are specially packed.
Good are safe as they are specially packed.
Chances of accidents are more due to poor road conditions and negligent drivers.
Chances of accidents are less because of one way track and good signal system.
Chances of accidents are less in waterways.
Chances of accidents are less because of good maintenance and expert pilots.
Ownership is in the hands of private parties
Ownership is in the hands of the government
It is owned by both private sector as well as public sector.
It is owned by both private sector as well as public sector.

Cheque and Bank Draft

Sr. No.
Points of Distinction
Bank Draft
According to the Indian Negotiable Instrument Act, A cheque is an unconditional order directing the banker to pay a certain sum of money only to the order of a certain person.
A draft is an order to pay money drawn by one office of a bank upon another office of the same bank for a sum of money payable to order on demand.
It aims at facilitating businessman for effecting local payments.
It aims at facilitating immediate outstation payments.
The drawer is the account holder of the bank.
The drawer is the bank itself.
The cheque may or may not be dishonoured.
A draft can never be dishonoured as it is already paid for.
Bank Charges
The bank may not charge for issuing cheque book.
The bank charges a nominal amount to issue a draft.
Payment of crossed cheque cannot be obtained immediately
Payment of bank draft can be obtained immediately.
Facility extended to
Cheque facility is extended to account holders of the bank only.
Draft facilities is extended to both account holders of the bank as well as outsiders.
Cheques issued by an individual may not be cleared due to many reasons such as sign not matching, post dated, less balance, etc.
A bank draft is more reliable as it is issued by the bank only after receipt of payment.

Loan and Overdraft

Sr. No.
Points of Distinction
It is an arrangement under which a certain amount is advanced for a certain fixed period.
It is an arrangement under which the current account holder is allowed to overdraw from the account.
Any account holder i.e. current, savings, fixed deposit can get a loan.
Only current account holders can get overdraft facility.
Rate of Interest
It is lower than that of overdraft.
It is higher than that of loans.
It is for a long period
It is for a short period
Interest Charges
Interest is charged on the amount of loan sanctioned, whether withdrawn or not.
Interest is charged on the amount actually withdrawn.
Amount of loan is larger.
Amount of overdraft is smaller.
Separate Account
Separate account is to be maintained.
No separate account is required.
The purpose is to meet long term requirements.
The purpose is to meet short term working capital requirement.
Amount of loan is to be repaid in instalments or in lump sum on the due date.
Amount of overdraft is adjusted against the deposits in the current account.
Some valuable assets are to be given as security.
Overdraft is sanctioned against hypothecation of stock.

Commercial Bank and Central Bank

Sr. No.
Points of Distinction
Commercial Bank
Central Bank (RBI)
The main function is to accept deposits from public for lending to industry and others.
The main function of the central bank (RBI) is to regulate money supply in the country.
Printing of Currency
The commercial banks cannot print currency notes.
The Central Bank can print currency notes.
Acceptance of Deposits
The commercial bank accepts deposits from public
The Central Bank does not accept deposits from public.
The commercial banks provides loan to industry and commerce.
The Central Bank provides loan to Banks and financial institutions.
It can be owned by private and/or by government agencies.
It is owned and controlled by the government of India.
There are many Commercial Bank in India.
There is only one Central Bank (RBI) in India.
Monetary Policy
The commercial Banks do not frame any Monetary Policy.
The Central Bank frames the Monetary and credit policy.
The Commercial Bank does not keep check on the Central Bank.
The Central Bank Keeps a check on the Commercial Banks.

Bonded Warehouse and Duty paid Warehouse

Sr. No.
Points of Distinction
Bonded Warehouse
Duty Paid Warehouse
Bonded Warehouse is the warehouse where imported goods on which duty is not paid are stored.
Duty Paid Warehouse is the warehouse where imported goods on which duty is already paid are stored.
They are located within the dock area.
They are located in a port-town outside the dock area.
The imported goods stored here are mostly re-exported.
The imported goods stored here are mostly for the domestic markets.
The customs authority closely supervises the working of these warehouses.
These warehouses are not supervised by the customs authority. They are supervised by port authority.
Delivery of goods is done after payment of Import duty. In case of re-export, the import duty need not be paid, only rent and service charges need to be paid.
Deliver of goods can be obtained after payment of the rent charges of the warehouse.
Main purpose would be either the importer needs to re-export the goods or the importer may not be in a position to pay import duty.
Main purpose would be that the importer does not have suitable warehousing facility. Also, he may not require immediate delivery of goods.
Such warehouse may be owned by private or dock authorities.
Such warehouses are owned by public authorities.

Business Services :- It helps in success ful running of the business. It includes services like banking­ insurance, warehousing, communication & transport.
Banking :- It is an institution deals with money, accepts deposits frqin public and grants loans advances to those who needs finds for various purposes.
i.        Types of banks :- central bank, commercial bank, development, bank, co-operative banks, specialised banks, regional rural banks, exchange banks, indigenous bankers & savings bank.
ii.       Functions of commercial bank
A        Primary functions
 a) accepting deposits b) granting loans & advances
B.       Secondary functions
         a) agency functions b) utility functions
E-banlang :- ATM, credit cards, debts cards, EFT, (electronic fund transfer), core banking, internet banking, NEFT (national electronic fund transfer), RTGS (real time gross settlements)
Insurance :- It is a protection against financial loss arising on the happening of an unexpected event. It is a contract between two parties insurer and insured.
i.        Principles of insurance :- utmost good faith, -Insurable interest, Indemnity, Contribution, Subrogation, Mitigation of loss, & Causa-proxima
ii.       Types of insurance :- life insurance, fire insurance& marine insurance.
Warehousing :- It is an establishment for the storage of the goods.
i.        Functions of warehousing                           ,
ii.       Types of warehouses :- private warehouses, public or commercial warehouses, government warehouses, bonded warehouses, duty and warehouses, cooperative warehouses & cold storage warehouses.                                                                                                        .
Communication :- It is an art of exchanging ideas, facts, information, etc from one person to another.
A.       Traditional modes of ,communication
         a)       Postal services :- the services of carrying letters & parcels, arranging remittance of money, accepting deposits of money, etc.
         b)       Types of postal services :- Mail services, specialised mail services, money remittance services & retail services   
B.       Modern modes of communication :- courier services & electronic services (fax, internet & email) telecom-services
     Transport :- Transport is the movement of people, animals & goods from one location to another.
     A.       Role of transport
B.       Modes of transport
a.       Traditional modes of transport b. Modern modes of transport
i. Road transport ii. Rail transport iii. Water transport
iv. Air transport v. Other means of transport
Q.1. A) Select the proper option from the options given below and rewrite the completed sentences:
           1.       Overdraft facility is given to ....................
                     a) Savings account b) Current account c) Fixed account
           2.       The account suitable for creating a saving habit is ....................
                     a) Current account b) Recurring deposit account c) Saving account
           3.       There is no limit on the frequency of withdrawals from a .................... a) Saving account b) Fixed account c) Current account
           4.       Principle of utmost good faith is applicable to ....................
                     a) Life insurance b),Marine insurance c) All types of insurance
           5.       Principle of indemnity is not applicable to ....................
                     a) Life insurance b) Fire insurance c) Marine insurance
           6.       Insurable interest must exist in ....................
                     a) Life insurance contract only b) Marine insurance contract only
                     c) Every insurance contract
           7.       Bonded warehouses are located at ....................
                     a) Railway station b) Villages c) Ports
           8.       Perishable goods are stored in ....................
                     a) Bonded warehouses b) Duty paid warehouses c) Cold storage warehouses
           9.       Postal services are administered by ....................
                     a) Private companies b) Government of India c) Panchayat
           10.     In case of urgency and to avoid delays ................... is sent
                     a) Registered post b) Speed post c) Insured post
           11.     In India railways are owned and managed by ....................        
                     a) Private companies b) Government c) Individuals
           12.     Door to door service is offered by ....................
                     a) Rail transport b) Road transport c) Air transport
           13.     The costliest means of transport is ....................
                     a) Rail transport b) Water Transport c) Air transport
           14.     Road transport is suitable for ................... distance
a) Short b) Long c) Medium
1)      Match the correct pairs :
Group "A"
Group "B"
a. RBI
b. Overdraft
c. Saving account
d. ATM
e. Fixed deposit account
1. Recurring deposit account
2. 12 hours service
3. Withdrawals after fixed period of time
4. Central Bank
5. Current Account
6. Salaried people
7. 24 hours service
8. Commercial bank
9. Cash credit
10. Withdrawal before fixed period of time.

2)      Match the correct pairs :
Group "A"
Group "B"
a. Life Insurance
b. Mitigation of loss
c. Premium
d. Cold storage
e. Warehousing
1. Claim by insured
2. Perishable goods
3. Insurable interest
4. Maximum loss
5. Transfer of goods from one place to other
6. To minimise the loss
7. Imported goods
8. Principal of indemnity
9. Storage of goods
10. Payment made by policy holder

3)      Match the correct pairs :
Group "A"
Group "B"
a. Road transport
b. Rail transport
c. Air transport
d. Postal department
e. Courier services
1. Government owned
2. Co-operative societies
3. Self employed
4. Owned by private companies
5. Door to door service
6. Owned by individuals
7. Costliest means of transport
8. Huge carrying capacity
9. Difficulty in transport
10. Cheapest means of transport
C)      Write a word or phrase or a term which can substitute each one of the following:
         1.       The account suitable for salaried people
         2.       Overdraft facility is given to a certain definite account holder
         3.       An account holder enjoys the privileges of any number of withdrawals
         4.       An account where fixed amount is kept for a specific period.
         5.       A bank, which is known as banker's bank
         6.       The type of insurance where the principle of indemnity is not applicable.
         7.       The policy under which cargo is insured for a specific period & voyage
         8.       The principle of insurance under which the insurer and insured must show complete faith towards each other.
         9.       A device through which calls and messages can be sent and received
         10.     An electronic letter through which the messages can be exchanged on the computer
         11.     A warehouse where the goods, can be stored after the payment of import duty
         12.     The type of warehouse where perishable goods are stored
         13.     The costliest mode of transport
         14.     Means of transport carrying bulk and heavy goods for international trade
         15.     Mode of transport which helps to get goods and passengers at their door
Q. 2.  Distinguish Between the following:
         1.       Current account & Savings account
         2.       Savings account & Fixed account
         3.       Current account & Recurring deposit account
         4.       Cheque & Bank Overdraft
         5.       Loan & Overdraft
         6.       Commercial bank & Central bank
         7.       Life insurance & Fire insurance
         8.       Fire insurance & Marine insurance
         9.       Road transport & Rail transport
         10.     Rail transport & Air transport
         11.     Road transport & Water transport
         12.     Bonded warehouse & Duty paid warehouses
Q. 3. Write Short Notes on the following :
         1.       Nature of business services           
         2.       Types of business services
         3.       Types of banks
         4.       Primary functions of commercial banks
         5.       Agency functions of commercial banks                              
         6.       Utility functions of commercial banks
         7.       E-banking
         8.       Types of life insurance policies
         9.       Types of fire insurance policies
         10.     Types of marine insurance policies
         11.     Functions of warehousing
         12.     Types of warehouses
         13.     Mail services of the post offices
         14.     Specialised mail services of post offices
         15.     Money remittance services of post offices
         16.     Retail services of post offices
         17.     Telecom services
         18.     Functions of warehouses
         19.     Role of transport
         20.     Road transport
         21.     Rail transport
         22.     Air transport
         23.     Water transport
         24.     Other modes of transport
Q. 4.  State with Reasons whether the following statements are TRUE or FALSE :
         1.       Central bank (RBI) cannot accept deposit from the public
         2.       Overdraft facility is given to saving account holders
         3.       Current account is suitable for salaried people
         4.       Cash can be withdrawn from ATM at any time
         5.       The principle of indemnity applies to life insurance
         6.       Insured must have insurable interest in the subject matter at the time of taking the policy
         7.       An individual must always tries to minimise the loss by fire as far as possible
         8.       Duty paid warehouses help to provide storage for perishable commodities
         9.       Private warehouses are used only by its owners
         10.     Post offices provide money remittance services
         11.     E - payment facility is not available to general public
         12.     Air transport is suitable for short distances
         13.     Transport helps in raising standard of living
         14.     Water transport is the costliest means of transport
         15.     Rail transport provides door to door services
Q. 5.  Answer the following questions in short :
         1.       State the nature of business services.
         2.       What are the different types of banks?
         3.       State the primary functions of banks.
         4.       What are the agency functions of banks ?
         5.       State the utility functions of commercial banks.
         6.       What is E-banking ?
         7.       Write different types of life insurance policies.
         8.       State different types of fire insurance policies.
         9.       What are the different types of marine insurance policies?
         10.     State the functions of warehousing.
         11.     State the main services of the post offices.
         12.     What do you mean the specialised mail services of the post offices ?
         13.     State the telecom services as a means of communication.
         14.     What are the functions of a warehousing ?
         15.     Discuss the role of transport.
Q.6.   Answer the following Questions :
         1.       Define bank. Explain different types of banks.
         2.       What is commercial bank? Explain its primary functions.
         3.       Describe the secondary functions of commercial banks.
         4.       Define insurance. Explain the various principles of insurance.
         5.       What is warehousing? Explain different types of warehouses.
         6.       Describe mail services & specialised mail services of the postal department.
         7.       Explain the functions of warehousing.
         8.       Describe the role of transport in modern times.















2019 Board Paper Solution

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HSC ENGLISH SET B 2019 21st February, 2019

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