Give the benefits of service sector.

The Benefits of service sector are as follows :

1. Meeting Financial Requirements :

The industrialists and traders often face the shortage of capital for buying materials and holding stock. This problem is solved by the commercial banks and other financial institutions which meet the financial requirements of trade and industry. Commerical banks also offer loans to consumers for the purchase of durables such as scooter, refrigerator, T V, etc. They facilitate remittance of funds from one place to another and also settlement of credit transactions.

2. Coverage of Business Risks : Business firms are exposed to several risk such as theft, fire, flood, etc. Such risks are covered by insurance companies through various policies issued against payment of required insurance premium. Insurance companies cover the risks of goods in storage and also in the process of transit of goods to traders and consumers. Business premises, stock, furniture, plant and machinery can be insured against fire, theft, and other risks.

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Write down the minimum and the maximum amount to be remitted through RTGS.


1. Minimum amount: It is one lakh rupees.

2. Maximum amount : There is no upper ceiling for RTGS transaction.

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What is the full form of IFSC ?

Full form of IFSC is Indian Financial System Code.
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What is the essential information that remitting customer would have to furnish to a bank for the remittance to be effected through RTGS ?

The remitting customer has to furnish the following information to a bank for effecting RTGS:

1. Amount to be remitted.

2. His account number which is to be debited.

3. Name of the beneficiary bank.

4. Name of the beneficiary customer.

5. Account number of beneficiary customer.

6. Sender to receiver information if any.

7. The IFSC code of the receiving bank branch.

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 Describe the various features of commercial banks.


 (i) Role of an intermediary : Bank is an intermediary between those who have surplus funds, i.e., the depositors of funds and those who need these funds i.e., the borrower of money.

(ii) Mobilizes capital : It accepts deposits from all section of society. The amount so accumulated is made available to trade, industry and commerce. Thus, it directly leads to mobilization of financial resources of the society lying scattered in small amounts.

(iii) Plays the roles of creditor and debtors : A bank plays the role of creditor and debtor at the same time. It is indebted to all the depositors whose money, for the time being it is using, to advance loans, etc., to its needy clients. At the same time, it is a creditor to those whom it has granted loans and advance.

(iv) Creator of Money: Banks create money when they grant overdraft and credit facilities to account holders.

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