One app for all your study abroad needs
The NCERT Class 11 Business Studies Chapter 4 discusses the meaning, nature, and types of business services essential for business operations. It covers banking, insurance, transportation, warehousing, and communication services, along with their features, functions, and importance. These solutions provide clear, concise, and CBSE-aligned answers for effective exam preparation. You can also download the free PDF for revision.
Explore Notes of Class 11: Business Studies
NCERT Solutions Class 11 Business Studies Chapter 4: Business Services
This section provides detailed and student-friendly answers for the Class 11 Business Studies Chapter 4 exercise questions. Each answer is explained clearly to strengthen understanding and exam preparation.
Exercise
Short Answer Questions:
1. Define services and goods.
Services are separately identifiable, essentially intangible activities that provide satisfaction of wants and are not necessarily linked to the sale of a product or another service. Their purchase does not result in ownership of anything physical.
Goods are physical products capable of being delivered to a purchaser and involve the transfer of ownership from seller to customer.
2. What is e-banking? What are the advantages of e-banking?
e-banking is a service provided by banks that allows customers to conduct banking transactions such as managing savings, checking accounts, applying for loans, or paying bills over the internet using a personal computer, mobile telephone, or handheld device.
Advantages of e-banking:
(i) Provides 24 hours, 365 days a year services.
(ii) Transactions can be made from the office, house, or while travelling via mobile.
(iii) Promotes transparency in financial statements through digital payments.
(iv) Inculcates financial discipline by recording every transaction.
(v) Offers greater security and unlimited access without branch limitations.
3. Write a note on various telecom services available for enhancing business.
Telecom services are the backbone of business activities, enabling fast and efficient communication. The various types include:
(i) Cellular mobile services – Include voice, non-voice messages, data, and PCO services using any network equipment.
(ii) Fixed line services – Provide voice, non-voice, and data services for long-distance traffic via fibre optic cables.
(iii) Cable services – Offer one-way entertainment-related services with potential for two-way communication.
(iv) VSAT services – Satellite-based communication offering reliable solutions in urban and rural areas for tele-medicine, tele-education, etc.
(v) DTH services – Satellite-based media services received directly via dish antenna and set-top box, providing multiple channels.
4. Explain briefly the principles of insurance with suitable examples.
The principles of insurance are:
(i) Utmost good faith – Both parties must disclose all material facts. Example: Insured must reveal health conditions in life insurance.
(ii) Insurable interest – Insured must have a financial interest in the subject. Example: A person has an interest in his own life.
(iii) Indemnity – Insurer compensates actual loss (applies to fire/marine). Example: A House insured for INR 4 lakh gets the actual loss amount after a fire.
(iv) Proximate cause – Compensation only if the stated peril is the nearest cause. Example: Loss due to fire during a riot is covered if the fire is proximate.
(v) Subrogation – Insurer gets rights of insured after payment. Example: The Insurer can recover from the third party causing damage.
(vi) Contribution – In double insurance, insurers share the loss proportionally. Example: Two policies on the same property share a claim.
(vii) Mitigation – Insured must minimise loss. Example: Owner tries to save goods from fire.
5. Explain warehousing and its functions.
Warehousing involves the scientific storage of goods to maintain quality, value, and usefulness. Modern warehouses are logistical service providers ensuring the right quantity, place, time, form, and cost.
Functions of warehousing:
(i) Consolidation – Receives goods from different plants and dispatches to a customer in one shipment.
(ii) Break the bulk – Divides large quantities into smaller lots for clients.
(iii) Stockpiling – Stores seasonal goods for release based on demand.
(iv) Value-added services – Provides packaging, labelling, grading, and in-transit mixing.
(v) Price stabilisation – Adjusts supply with demand to control price fluctuations.
(vi) Financing – Advances money against goods and supplies on credit.
Also Read: CBSE Class 10 Economics Chapter 3 NCERT Solutions
Long Answer Questions:
1. What are services? Explain their distinct characteristics.
Services are separately identifiable, essentially intangible activities that provide satisfaction of wants and are not necessarily linked to the sale of a product or another service. Their purchase does not result in ownership of anything physical.
Distinct characteristics:
(i) Intangibility – Cannot be touched; experiential. Example: A Doctor’s treatment cannot be tasted or touched.
(ii) Inconsistency – No standard output; varies with customer demands. Example: Mobile services are altered per user needs.
(iii) Inseparability – Production and consumption occur simultaneously. Example: ATM requires customer presence.
(iv) Inventory (Less) – Perishable; cannot be stored. Example: Railway journey experienced only when provided.
(v) Involvement – Customer participates in delivery. Example: Customer specifies requirements in personal services.
2. Explain the functions of commercial banks with an example of each.
Here are the functions of commercial banks:
(i) Acceptance of deposits – Takes money through current, savings, and fixed accounts. Example: A Savings account encourages individual savings with RBI-decided interest.
(ii) Lending of funds – Provides loans like overdrafts, cash credits, and term loans. Example: Cash credit facility for business working capital.
(iii) Cheque facility – Collects cheques drawn on other banks. Example: A crossed cheque deposited only in the payee’s account.
(iv) Remittance of funds – Transfers money via drafts or pay orders. Example: Bank draft sent to another city for payment.
(v) Allied services – Offers bill payments, lockers, and underwriting. Example: Locker facility for safe custody of valuables.
3. Write a detailed note on the various facilities offered by the Indian Postal Department.
The Indian Postal Department operates through 22 postal circles and offers:
(i) Financial facilities – Savings schemes like PPF, Kisan Vikas Patra, National Saving Certificates; retail banking functions (savings account, recurring deposits, money order).
(ii) Mail facilities – Parcel transmission, registration for security, and insurance cover during transit.
Other Allied facilities are:
1. Greeting post – Range of greeting cards for occasions.
2. Media post – Advertising via postcards, envelopes, letterboxes.
3. Direct post – Addressed and unaddressed direct advertising.
4. International Money Transfer – With Western Union for remittances from 185 countries.
5. Passport facilities – Partnership with the Ministry of External Affairs for applications.
6. Speed Post – Over 1000 destinations in India, links with 97 countries.
7. E-bill post – Bill payment collection for BSNL and Bharti Airtel.
4. Describe various types of insurance and examine the nature of risks protected by each type of insurance.
Here are the types of insurance:
(i) Life Insurance – Protects against the uncertainty of life (death or longevity). Example: Whole life policy pays after death; endowment pays at maturity or death.
(ii) Fire Insurance – Covers loss due to fire (accidental). Example: Compensates damage to insured property, like a factory building.
(iii) Marine Insurance – Covers marine perils (collision, fire, piracy) for ship, cargo, freight. Example: Hull insurance for ship damage; cargo insurance for goods in transit.
Risks that are protected under these insurances are:
- Life: Premature death (family support), old age (reduced earnings).
- Fire: Accidental fire causing property damage.
- Marine: Perils of sea affecting ship, cargo, or freight non-delivery.
5. Explain in detail the warehousing services.
Warehousing is scientific storage maintaining quality and usefulness, now evolved into logistical services delivering the right quantity, place, time, form, and cost using automation.
Types of warehouses:
(i) Private warehouses – Owned/leased by companies for their own goods; offer control and flexibility.
(ii) Public warehouses – Licensed for public use on a fee; provide flexibility and value-added services.
(iii) Bonded warehouses – For imported goods before duty; allow part removal, duty in instalments.
(iv) Government warehouses – Fully owned by the government (e.g., FCI, CWC).
(v) Cooperative warehouses – Set up by cooperatives for members.
Functions of Warehouses are:
(a) Consolidation – Combines goods from multiple plants for a single shipment.
(b) Break the bulk – Divides bulk into smaller client-specific quantities.
(c) Stockpiling – Seasonal storage (e.g., agricultural products) for gradual release.
(d) Value-added services – Packaging, labelling, grading, blending.
(e) Price stabilisation – Balances supply and demand to prevent price volatility.
(f) Financing – Advances funds against goods; supplies on credit.
Download the PDF for NCERT Solutions Class 11 Business Studies Chapter 4: Business Services
You can download the NCERT Solutions for Class 11 Business Studies Chapter 4 for easy revision and offline study.
Explore Solutions of Class 11: Business Studies
Related Reads
For more topics, follow LeverageEdu NCERT Study Material today!
