Business Studies Class 11 syllabus covers various aspects of business organisations and enterprises, their types, services they offer, how they are formed and more. Amongst the various units of this subjects, Business Services is an important topic which encompasses the integral types of commercial trade and auxiliaries and services offered to ensure the smooth working of the commerce and trade sector. If you are studying this topic and don’t know where to begin or which concepts to cover first, this blog has collated Business Services class 11 notes exploring the key topics and concepts described in this chapter.
This Blog Includes:
- What are Goods and Services and How are they Different?
- Types of Services
- Other Types of Business Services
- Business Services Class 11 MCQs
- Business Services Class 11 Important Questions
What are Goods and Services and How are they Different?
Beginning with the Business Studies Class 11 notes, let’s first take a look at the basic definition of Goods and Services and their key differences. Goods are physical products that are transferred from the seller to the purchaser. When it comes to goods, the transfer of ownership facilitated by the seller to the buyer is a distinctive feature. On the other hand, services are intangible, i.e., cannot be touched or seen physically and in terms of their nature, they are based on the experience of the consumer.
Nature of Business Services
- Intangibility: Services can only be experienced. Hence, the service provider has to consciously work on delivering a pleasant experience to the customer.
- Inconsistency: Since there is no tangible product to be delivered to the customer, they are inherent inconsistencies in service. As a result, service providers can alter the service to meet each customer’s expectations and needs.
- Inseparability: The production and consumption of services co-occur. They are inseparable.
- Inventory (Less): Unlike goods, services cannot be produced earlier for consumption later. Services are perishable, and service providers can store only associated products, but not the service itself.
- Involvement: Another critical characteristic of a service is that the customer is involved in the production. The service can be customized to meet the needs of the customer.
Types of Services
The chapter on Business Services also covers the different types of services which is also major point of difference that sets them apart from goods. Services are classified into three different categories:
|Business Services||Used by businesses for various activities.|
|Social Services||Voluntary services to help achieve social goals. Eg. Volunteering to improve living conditions of slums, etc.|
|Personal Services||Experienced differently by each customer—Eg: tourism, restaurants, and recreational facilities.|
Now that we are familiar with the types of services, let’s take a look at the primary business services.
Commercial banks play a significant role in ensuring the growth of an economy. Banks offer institutional credit to individuals and corporations. The primary purpose of a bank is to accept money from customers for deposits. It also lends money to customers on interest. Simply put, a bank creates economic activity by dealing with money. It mobilizes the individual savings of customers and makes funds available to businesses for various activities. Besides lending money, banks also offer different financial products to customers for a price, i.e., commission, interest, discounts, etc.
Types of Banks in India
Another key concepts you must study while going through Class 11 Business Services Notes is the different types of banks. Here we have elaborated the various types of banks and their key characteristics:
These banks accept deposits from the public and use it for lending and investment and are directed by the Indian Banking Regulation Act of 1949. There are two types of commercial banks offering finance-related and banking services to the public:
Public sector banks – The government is the primary stakeholder. They need to focus on social objectives over profitability.
Private sector banks – Owned, managed, and controlled by private operators. They are free to operate as per market needs.
Amongst the important types of banks covered in the chapter on Business Services, the primary objective of Cooperative banks is to provide cheap credit to their members. They are governed by the State Cooperative Societies Act. It’s a significant source of rural credit.
These can be industrial banks, foreign exchange banks, export-import banks, development banks, etc. These banks offer financing for large industrial projects, foreign trade, etc.
The RBI (Reserve Bank of India) is the central bank in India. It supervises and regulates all commercial banks. It’s also the government’s banker and is in charge of the nation’s credit policies.
Now that you know about the types of Banks, the next topic covered in the Business Services chapter on Class 11 is e-Banking and its benefits. e-Banking refers to the process of accessing one’s banking account via the internet. Today, all major commercial banks offer e-Banking services to their customers. Here are the comprehensive study notes on e-Banking:
Benefits of e-Banking for customers:
- 24 x 7, 365 days of the year access to banking facilities
- Customers can carry out an array of banking services right from the comforts of their home
- Enhanced customer satisfaction due to increased convenience
Benefits of e-Banking for banks:
- Improved customer satisfaction, which gives a competitive advantage to the bank
- Unlimited banking network
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Major Functions of Commercial Banks in India
The chapter on Business Services in Class 11 further elaborates upon the key functions and operational features of commercial banks in the Indian context. So, here we have summarized the major functions of Commercial Banks in India:
1. Collection of Deposits: Commercial banks accept deposits from their customers. The major types of deposits are:
- Savings account deposits
- Fixed deposits
- Recurring deposits
- Current account deposits
2. Lending of Funds: Besides accepting deposits from customers, commercial banks also lend loans and other credits to eligible customers. The bank raises the money for these loans from the deposits received from customers.
3. Cheque Facility: Banks use clearinghouses to collect cheques on behalf of their customers.
4. Agency Functions: Banks also submit insurance premiums from the side of their clients. They are also responsible for collecting interest, pension, and dividends, etc.
5. Allied Services Besides the above services, banks also offer locker facilities, bill payments, and other allied services to customers.
The next sub-topic we have summarized in our Business Services Class 11 notes is Insurance and its functions. In simple terms, insurance is the contract between the insurance company and the insured. The insurance company agrees to pay the insured if a specific event happens. For this, the insured provides timely payments to the insurer and these payments are often called as premiums.
Functions of Insurance
- Distribution of risk
- Better utilization of capital
- Formation of capital
- Promotion of foreign trade
- Credit facility
- Social welfare
Types of Insurance
The chapter on Business Services explains that insurance policies are of different types to meet the varying needs of each customer. The major categories are:
In this type of coverage, the insurer pays an assured sum to the nominee(s), if the policyholder dies during the policy term. It helps in meeting two types of risks:
- Risks of dying too early
- Risks of dying too late
Life Insurance can further be classified into:
- Whole Life Policy: As the name implies, in this policy, the insured is covered for his entire life. The insured sum is paid only at the death of the policyholder.
- Endowment Policy: Under this plan, the insurance company pays the sum assured on the death of the policyholder or on attaining a specific age.
- Joint Life Policy: This policy covers the life of two or more persons under a single plan.
- Annuity Policy: This policy pays a specific sum after the insured attains a particular age. The amount is paid out monthly, quarterly, half-yearly, or annually.
- Children’s Endowment Policy: This plan is taken to meet a child’s expenses like higher education or marriage.
While going through the Business Services Class 11 notes, you must also study the key features and elements of General Insurance. It includes other insurance policies that offer coverage to property. Examples of general insurance include:
- Fire insurance – Under this plan, the insurer pays indemnity to the insured for financial losses incurred as a result of a fire outbreak. It can be further classified into:
- Specific policy
- Double insurance
- Marine Insurance – It’s generally taken by a ship-owner, freight receiver, or cargo owner. Here are the types of Marine Insurance:
- Hull insurance
- Cargo insurance
- Freight insurance
Other Types of Business Services
In the following sections we have mentioned the important pointers on different types of services which you might revise while covering our Business Services Class 11 notes:
To put it simply, Communication can be elaborated as the exchange of ideas, views, messages and opinions and the like between multiple individuals. Those services which facilitate communication between the general public, business and for various other purposes are called as communication services. Take a look at the major types of services described in the chapter on Business Services:
The government offers postal services within India as well as overseas. Key features of postal services are:
- It is monitored and authorized by the government.
- The Indian postal department offers national and foreign posts.
- Post offices have also commenced speed post service, to compete with private courier services.
The two significant challenges presently faced by postal services are Bureaucracy and slower speed.
Telecommunication services are the backbone of any business activity. Without efficient and modern telecom services, businesses will not be able to provide the right services. As per the Class 11 chapter on Business Services, Telecom services are classified into:
- Cellular mobile services
- Landline services
- Radio paging services
- DTH services
- VSAT services
- Cable services
It refers to the physical movement of goods from one part of the country to another. These services essentially build a much-needed link between the producer and the end consumer.
A warehouse is a place that is used for holding and preserving goods. Goods are stored in a warehouse from the time of production until it is sold to the customer. As described in Class 11 chapter on Business Services, here are some of the major functions of warehousing:
- Price stabilization
- Value-added service
- Risk bearing
Further, here are the different types of Warehouses you must know:
- Government warehouses
- Public warehouses
- Private warehouses
- Cooperative warehouses
- Bonded warehouses
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Business Services Class 11 MCQs
Here are some practices MCQs for Business Services Class 11:
- Name the five I’s of services.
- What do you mean by insurance?
- Give examples of companies offering DTH services in the country.
- Define Banking.
- What are the different types of insurance?
- Riya’s father is saving 2,000 every month until her graduation so that he could her gift her the money when she graduates. Which bank deposit should he choose to secure his savings?
- Name any one essential function of commercial bank.
- What is e-banking?
Business Services Class 11 Important Questions
Now that you are familiar with the key concepts of this chapter through our insightful Business Services Class 11 notes, you must prepare for the following frequently-asked exam questions:
- What are the types of warehouses?
- List the differences between goods and services?
- What are the benefits of e-Banking?
- What are the primary functions of commercial banks in India?
- Explain the types of banks in India
Hence, we hope that this blog summarizing Business Services Class 11 notes helped you cover the key topics and concepts in this chapter. Confused about which course to choose after 12th? Our Leverage Edu experts are here to help you pick the best program and university as per your interests and career aspirations! Sign up for a free session with us today!