Ancillary Services in Banking – Ancillary Services provided by a Bank
All banking services can be roughly classified into two groups. The first is primary services, which include taking demand deposits and providing loans to consumers according on their needs.
Banks offer a wide range of auxiliary services, or supporting services, in addition to their regular primary activity. Let’s examine a few of their most crucial services.
Payment services
It denotes a money transfer from one bank branch to another, either within the same bank or among separate banks. [Ancillary Services in Banking]
Local transfers can be made using Bankers Cheques (BC), while transfers between financial institutions can be made using Demand Drafts (DD), Telegraphic Transfers (TT), Mail Transfers (MT), National Electronic Fund Transfers (NEFT), and Real Time Gross Settlements (RTGS) for a fee. The customer must complete all required fields for the remittance, including
- Type of remittance, such as by filling out DD/TT/MT, etc.
- Address and name of the recipient.
- Name of the branch where the transfer should be made.
- Name, address, and, if necessary, a customer’s account number.
Keeping Services
- The facility is commonly referred to as a safe deposit box.
- Customers are given the option to store their valuables and critical documents in a locker that has been particularly made. On them, a predetermined rental is assessed.
- Individuals (who are not children), businesses, limited companies, certain associations, and societies may rent lockers.
- A year is the minimum rental time for lockers.
- Lockers come in four sizes: small, medium, big, and extra large, each with a distinct rental price.
- An individual hirer has access to the nomination facility.
- Banks have the right to impose fines in cases of past-due rent.
[Ancillary Services in Banking]
Currency Services
- A person needs foreign currencies when they travel to other countries or want to purchase any goods from abroad.
- These currencies are offered by the bank to its clients.
- Only authorised bank branches are able to carry out these operations, and all transactions are completed over the counter.
- A person has the option of sending foreign currency to banks when earning or receiving it from overseas.
- These currency exchange transactions are carried out in accordance with the policies and guidelines set forth by the central banks of the individual nations.
- Foreign Exchange Management Act (FEMA), 1999 restrictions apply to all transactions in India.
Payment Services
The introduction of card services was initially done for convenience and safety reasons, but today it is the most widely used method of payment. Customers receive credit cards and debit cards, which are the two most common forms of cards issued by the bank. [Ancillary Services in Banking]
A credit card holder can purchase goods or services from a merchant establishment where such an arrangement is allowed by using their card. The cardholder is then sent a bill outlining the debts that must be settled within 30–40 days. It has a set interest rate.
Credit cards and debit cards are equivalent. The only distinction is that as each transaction is notified, a certain amount of dues is debited from the cardholder’s account.
Banking services online
Performing any task or activity without being physically present in the bank branch is currently the most popular way to conduct banking business.
It’s sometimes referred to as internet banking or online banking. Sitting in front of a computer or smartphone screen allows one to perform a variety of tasks. [Ancillary Services in Banking]
For instance, moving money between accounts at the same bank or at different banks, keeping excess cash in a fixed deposit account, shopping online, etc. The only thing required of him or her is to use the ID and PASSWORD provided by the bank to log into their virtual account.
Services for insurance
- The risk of practically every part of a person’s life is covered by a variety of insurance products that banks offer, including life, health, valuable assets like personal vehicles, debit and credit cards, and others.
- It is also referred to as Bancassurance because it involves a collaboration between a bank and an insurance provider.
- The clientele of the bank is where the insurance firm sells its various products.
- Both businesses benefit financially from this cooperation. By offering the products, banks can generate more money, and the insurance firm can grow its clientele.
- ICICI Prudential, Bajaj Allianz, etc. are few examples.
Additionally, some banks provide investment services to their business clients. Services for portfolios is another name for it. They advise their clients specifically on how to make wise investments or raise money for their businesses. These services are also available to any individual consumer from their particular bank. [Ancillary Services in Banking]
