Banking Services

Bank is an institution that accepts deposits, withdrawal by cheques and makes loans
and advances for the purpose of earning profits.

Types of banks:-

Commercial Co-operative Specialized Central banks

banks banks banks

Private Sector Public sector

1. Commercial banks:
Public sector bank - Owned by govt. e.g. SBI, PNB, OBC. etc.

Private sector Banks - Owned by private promoters HDFC, ICICI, AXIS etc.
emphasize more on profitability.

Foreign banks - Own & managed by foreign promoters HSBC, Standard Chartered.

2. Co-operative Bank : - They provide cheap credit to their members, an important

source of rural credit i.e. Agriculture financing in India, e.g. Delhi Nagrik Shastri Bank
etc.

3. Specialised Bank :- They are foreign exchange bank industrial banks,

development banks, export/import bank etc. These banks provide financial aid to
industries, heavy turnover / key projects & foreign trade e.g. IDBI, SIDBI etc.

4. Central Bank :- The Central Bank of a country in the Apex institution & the
monetary authority. It issues currency & controls money supply & credit in the
country. It supervises, controls and regulates the activities of all commercial Banks. it
also acts as a banker to the govt. Reserve Bank of India is the Central Bank of our
country.

INSURANCE :

Meaning :- It is a contract where one party takes the responsibility of the risk of
other party in exchange of some fixed fee.
PRINCIPLES OF INSURANCE:

1) Principle of the utmost good faith: It refers that no material or important facts
should be concealed by both the parties to the insurance contract.

2) Principle of Insurable Interest : It refers that there must be such a relationship

between the Insured and the subject matter of insurance that the insured stands to
benefit by its safety and to loose by its loss.

3) Principle of Indemnity: It refers that the insured can get only the compensation
against actual loss and he cannot make profit out of it.

4) Proximate Causes: When the loss is the result of two or more causes, the
proximate cause, i.e. the direct the most dominant & most effective cause of loss
should be taken into consideration. The insurance company is not liable for the
remote cause.

5) Principle of Subrogation: It refers that if the insured compensate the insured

then all the rights related to the subject matter of insurance get transferred to the
insurer.

6) Principle of contribution: - If the same subject matter, except life is insured by

more than one insurers, then the actual loss will be shared by all the insurer.

7) Principle of mitigation:- If refers that the insured should try to minimize the loss
of the subject matter of the insurer even if it is insured.

Types of Insurance

Life Insurance General Insurance

Fire Marine Miscellaneous

Life Insurance: It is a contract under which the insurer, in consideration of a

premium, undertakes to pay a fixed sum of money on the death of the insured or on
the expiry of a specified period of time, whichever is earlier.

Fire insurance: it is a contract whereby the insurer undertakes to make good any
loss/ damage caused by fire during a specified period.

Marine Insurance: A marine insurance is an agreement where by the insurer

undertakes to indemnify the insured loss against perils of the sea.
Difference between LIFE, FIRE and MARINE insurance

BASIS OF LIFE INSURANCE FIRE INSURANCE MARINE

DIFFERENCE INSURANCE
Subject matter Human life Assets Ship, cargo or
freights
Element Both protection and Protection only Protection only
investment
Insurable interest Must be present at Must be present Must be present at
the time of effecting both at the time of the time when
the effecting the policy claim falls due
as well as when the
claim falls due
Duration Usually exceeds a Does not exceed a Period or voyage or
year year mixed
Indemnity Not based on Is a contract of Is a contract of
principle of indemnity indemnity
indemnity
Surrender value Has a surrender Does not have any Does not have any
value surrender value surrender value

TYPE OF INSURANCE :

(A) Life Insurance :

- Whole life policy:- Amount payable will not be paid before the death of the
assured. It will be payable to legal heir (s)

- Endowment life Insurance: Sum assured is given in full payment after completion
of policy / death of insured, whichever is earlier.

- Joint Life Policy: Policy taken up by two or more persons.

- Annuity Policy: Policy money is payable monthly.

- Children Endowment Policy:- for children to meet higher education or marriage

expenses.

(B) General Insurance :- Fire Insurance , Health Insurance , Crop Insurance ,

Vehicle Insurance , Cattle Insurance.

(c) Marine Insurance:- Ship Insurance , cargo Insurance , freight Insurance .