ANCILLARY SERVICES BY BANKS BANKS Banks play an important role in the field of trade, commerce and industry.

. They promote and mobilize savings by providing safety, confidentiality and attractive rate of interest. Banks inspire confidence in people and help in creating banking habits in them. BANK SERVICES Primary services: Borrowing and lending of money Secondary services (or ancillary services): Services offered by banks to help the customers such activities include collection of cheques, dividend, warrants, etc. on behalf of customers as well as effecting transfer of funds, remittances by mail and telegram in order to attract customers and make banking services effective. CATEGORY OF ANCILLARY SERVICES Rendered to banks own customers Available to general public

SERVICES OF BANK TO ITSCUSTOMERS: Some of functions in this category are enumerated below: (a) Dealing in Bills of Exchange, Promissory Notes, Hundies and Drafts. (b) Issuing letter of credit, Travelers cheques and Circular notes. (c) Buying, selling and dealing in bullion as well as foreign exchange and foreign bank notes. (d) Acting as agent for clients, buying and selling shares and debentures, and acting as underwriter. (e) Collection and remittance of money and extending guarantee against loans raised by customers.

SERVICES TO THE GENERAL PUBLIC 1. Providing facility of lockers for the safe custody of valuables. 2. Financial assistance for the establishment of trusts, association, clubs and charitable institutions. 3. Performing certain functions as are incidental or conducive to the promotion and advancement of trade and commerce. 4. Extending financial help to the weaker sections of society for self employment. 5. Issue of bank drafts, gift-cheques, banker's cheques, etc. 6. Providing financial assistance to the physically handicapped to engage in gainful occupation and earn their livelihood. TYPES OF ANCILLARY SERVICES Remittance of funds Safe custody of valuables Safe deposit vaults Merchant banking

Bid bonds and performance guarantees Credit/Debit cards Standing instruction Gift cheques Teller system Stock invest

REMITTANCE With a network of their branches spread over the entire country banks are eminently suitable institutions for transfer of funds from one place to another Mail transfers Telegraphic transefer Banks Drafts Traveler cheques SAFE CUSTODY OF VALUABLES Banks render a valuable service by accepting the valuables of their customers for safety custody:-By accepting the valuables-By hiring out safe deposit vaults to the customer-By facility of nomination. MERCHANT BANKING Merchant banking comprises in rendering services of non-banking nature to the industrial and business houses. Divisions of merchant banking services-project counseling-preparation of feasibility Report-term finances-Obtaining government consentWorking capital-As managers to new issues-Arranges foreign currencyJoint venture abroad.

BID BONDS AND PERFORMANCE GUARANTEES Banks render valuable services to their customers by providing guarantees on their behalf in favor of third parties, specially the government departments and foreign importers. The bid bonds and performance guarantees are also being issued in case of export of capital goods and overseas construction contracts. Dealing in bills of exchange, promissory notes, letter of credit. CREDIT CARDS SERVICES It is an instrument which provides instantaneous credit facility to its holder. Called Plastic money. Parties involved-the issuing bank-the card holder-the member establishments. DEBIT CARDS FACILITY Provides same facility as the credit card but instead of providing credit facility it debits money from the users account. STANDING INSTRUCTIONS Payment of life insurance premium of L.I.C. Payment of periodic membership fee, subscription to clubs, libraries, professional associations or charitable institutions. Payment of other bills of the customers Transfer of specified amounts from one account of the customer to another account Collection of dividends on behalf of customers Collection of pension from government deposits. Collection of interest on government securities held in safe custody. GIFT CHEQUES Banks issue gift cheques to the member of the public to enable them to present a specified amount to some friend or relation

 These are payable on demand hence the payee can claim the money at any branch of the issuing bank TELLER SYSTEM Generally used to reduce the effort in presenting a cheque for payments in terms of number of persons involved and time duration. Generally a cashier is designated as Teller who handles cash up to specified amounts immediately on presentation of cheques etc. STOCK INVEST Reserve Bank of India has permitted 56 banks to issue Stock Invest, Rule in stock invest: 1 . Na me of the capital issu ing co mp an y h as to b e filled b efo re delivering to the applicant 2. Restricted to individual investors and mutual funds 3 . Issued ag ainst term d epo sits and credit balan ces in sav ing and current accounts. 4 . E f f e c t i v e c e i l i n g o f Rs.50000 per individual per capital (not applicable for mutual funds). 5. Original stock invest should be enclosed . 6 . Bank s lien on d epo sits accoun t in resp ect of unu sed sto ck invest shall not be lifted before 4 months. CONCLUSION All these ancillary services are providing competitive advantage to the banks in terms of customer satisfaction and also customer loyalty But all these implementation requires a lot of patience and conscious efforts.