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Banking transactions done using electronic forms via. internet rather than traditional methods is called electronic banking or e-banking.

A debit card looks like a credit card but it is linked with a current or a savings account. Whenever a person uses a debit card the money gets deducted from the balance in his bank account.
OR
Debit card:

• A debit card looks like a credit card but it is linked with a current or a savings account. Whenever a person uses a debit card the money gets deducted from the balance in his bank account.
• Debit card can be used to make payments at shopping malls, online tickets, ATM centre for withdrawing money, etc.
• When a person buys something from a merchant he gives his debit card. The merchant swipes the card in a portable machine and asks the customer to put his PIN. The billed amount then instantly gets debited from the customer’s account. A customer can use debit card only upto the balance available in his account.

A credit card is a small plastic card issued by the bank to its customer allowing him to purchase goods or services on credit.
OR
Credit card:
A credit card is a small plastic card issued by the bank to its customer allowing him to purchase goods or services on credit.

• Credit card allows to make payments and shop without giving money physically to the merchant.
  The use of credit card became quite wide spread since the end of 20th century.
• To obtain a credit card one needs to apply to its bank. The bank then conducts a systematic study on the credit of that person. The bank studies how much debt can that person pay in a given time. Based on this the bank sets a credit limit for that person and issues him a credit card.
• For example, if a bank studies and finds that a person can pay maximum 20,000 rupees per month then it sets this limit on his credit card i.e. he can use his card to credit money from his account and deposit it in merchant’s account. When the person uses his credit card for purchasing something, the amount get debited from his account i.e. his credit limit and gets credited to seller’s account.
• The bank calculates the total money spent by the credit holder in a month and sends him a credit card statement. The customer needs to make this payment to his bank as per the time limit given by the bank.
• This card can be used while shopping at stores, malls, making online payments like tickets, payment to online stores, etc.

• A traveller’s cheque is a medium of exchange that can be used instead of currency. It is very useful when a person is travelling within country or even abroad. Since the traveller carries cheques he is safe from the danger of hard cash getting robbed or stolen.
• However, today the banking has become much advanced. Banks today offer centralized banking, ATMs, e-banking and even mobile banking.
• Using these facilities one can withdraw cash, transfer money to another account from anywhere.
• In case a person is travelling and he becomes short of money he can ask his family members to deposit money in his account which he can withdraw anywhere from the world using ATM.
• On the other hand to obtain traveller’s cheque one needs to go the bank, complete the formalities and then carry and preserve the cheques.
• Owing to all these reasons people have stopped using traveller’s cheques.

Warehousing refers to holding or keeping of goods from the time of their production or purchase until they are sold or consumed. It removes time gap between production and consumption and thereby creates time utility. In addition to providing services of storage, warehouse also provides logistical service in a cost effective manner. Functions of Warehouses 

1. Consolidation: There are certain goods which are produced in small quantities but are sold to consumers in bulk quantity. Such goods need consolidation. Warehouses receive goods in small quantities from different producers and dispatch them to consumers in bulk. 

2. Break the Bulk: This function is just opposite of consolidation. Under it, the warehouse receives the quantity in bulk from the producers and sells them in small quantities to consumer. These small quantities are then sold to customers according to their requirements. 

3. Stock Piling: Usually there is a time gap between production and consumption of goods. Warehouse fills this gap. It stores those goods which are in surplus i.e., whose supply is more than their demand. When demand exceeds supply, it makes goods available from its own stock.

4. Value Added Services: Warehouses also provide some value added services like transit mixing, packaging and labeling. 

5. Price Stabilization: Warehouses help to equalize demand and supply and thereby stabilize the prices. 6. Financing: Warehouse owners advance money to owners of goods on the security of these goods and they also provide these goods on credit to customers.

A service is an act or performance offered by one party to another. They are economic activities that create value and provide benefits for customers at specific times and places as a result of bringing desired change. According to Sir William B, “Service refers to social efforts which includes the Govt.to fight five giant evils – wants, disease, ignorance, squalor and illness in the society”.

Characteristics of Services

Service is an act or performance offered by one party to another. They are economic activities that create value and provide benefits for customers at specific times and places as a result of bringing about a desired change in or on behalf of the recipient of the service. The term, service, is not limited to personal services like medical services, beauty parlors, legal services, etc. According to the marketing experts and management thinkers the concept of services is a wider one. The term services are defined in a number of ways but not a single one is universally accepted. The distinct characteristics of services are mentioned below:

1. Intangibility: Services are intangible. We cannot touch them, it is not a physical object. According to Carman and Uhl, a consumer feels that he has the right and opportunity to see, touch, hear, smell or taste the goods before they buy them. This is not applicable to services. The buyer does not have any opportunity to touch, smell, and taste the services. While selling or promoting a service one has to concentrate on the satisfaction and benefit a consumer can derive having spent on these services. For example: Railways sells a train ticket from A destination to B destination. Here it is the matter of consumer’s perception of services than smelling it or tasting it.

2. Inventory: Services too, are perishable like labour. Service has a high degree of perishability. Here the element of time assumes a significant position. There will be complete loss of labour. If labour stops working, it is a complete waste. It cannot be stored. Utilized or unutilized services are an economic waste. An unoccupied building, an unemployed person, credit unutilized, etc. are economic waste. Services have a high level of perishability.

3.Inseparability: Services are generally created or supplied simultaneously. They are inseparable. For example, the entertainment industry, health experts and other professionals create and offer their services at the same given time. Services and their providers are associated closely and thus, not separable. Donald Cowell states ‘Goods are produced, sold and then consumed whereas the services are sold and then produced and consumed’. Therefore inseparability is an important characteristic of services which proves challenging to service management industry.

4. Inconsistency: This character of services makes it difficult to set a standard for any service. The quality of services cannot be standardized. The price paid for a service may either be too high or too low as is seen in the case of the entertainment industry and sports. The same type of services cannot be sold to all the consumers even if they pay the same price. Consumers rate these services in different ways. This is due to thedifference in perception of individuals at the level of providers and users. Heterogeneity “makes it difficult to establish standards for the output of service firm.

5. Involvement: In the sale of goods, after the completion of process, the goods are transferred in the name of the buyer and he becomes the owner of the goods. But in the case of services, we do not find this. The users have only an access to services. They cannot own the service. 

For example: a consumer can use personal care services or medical services or can use a hotel room or swimming pool. However, the ownership remains with the providers. According to Philip Kotler, “A service is an activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything” From this it is clear that the ownership is not affected in the process of selling the services.

Mortgage is a legal agreement by which a bank lends money at interest in exchange of keeping ownership of borrower’s immovable property with the condition that it will give the ownership back when the loan is fully repaid.

The money paid by the insurer to the insured, when the insured surrenders his policy, is called Surrender Value of the policy.

NEFT stands for National Electronic Funds Transfer. It is an Indian system of electronic transfer of money from one bank or bank branch to another. The banks or their branches that support NEFT have to become a part of NEFT network.

(1) The banks/branches that support NEFT transaction need to become member of NEFT network.
(2) The money transfer occurs in hourly batches.

An amount of money that a hank provides to a borrower against a fixed rate of interest usually for a long term and against some security is called a loan.

The insurer with whom the risk is re-insured is called the reinsurer. It should be noted that the contract of re-insurance is between two insurers only.

Mail services refer to the services rendered by post offices for written communication.

Correct Answer is: A. actual product

The insurance that covers the risk faced by ship and goods transported by ship is called marine insurance.

Differences between Double insurance and Re-insurance:

This is a policy under which the average clause is included. Under this policy, the insurer is required to bear only a ratable proportion of the actual loss to the property.

Insurance:

• Insurance is a written contract or agreement between two parties. The party that provides insurance is called ‘insurer’ and the party that receives the insurance is called ‘insuree’.
• To take insurance, the insuree needs to pay a specific amount known as ‘premium’ to the insuree. The insurer then undertakes to provide a guarantee of compensation for financial loss that the insuree might face.

Explanation:

• We as individuals and our business or profession may face several risks.
• For example, we or our family members may fall sick, meet with an accident, die, etc. Similarly, our business or profession may face risks such as fire, earth-quake, strikes, theft, robbery, etc. Any such loss to an individual, his family, his business or profession will need money to recover the loss.
• Under such unforeseen circumstances insurance plays a very important role. If a person undertakes an insurance he can remain peaceful and out of financial worries that may occur in these situations.
• One can take insurance for an individual, family members, building, business assets like machinery, raw material, finished goods, etc.
• The insurance provider i.e. insurer is not an individual but a company or an organization.
• While taking insurance the insuree and insuree sign a contract known as ‘Insurance policy’. Note that the insurance cannot eliminate the risk a person or a business may face but it can only compensate the ‘financial loss’ caused by the risk.

Marine insurance:

• Transporting goods through ships is one of the most economical form of transport. However, there are several risks in it like damage or destruction of ship, goods carried by ship, etc. Marine insurance covers all these risks and compensates the insuree.
• It is one of the oldest from of transport between countries and was the most common mode till 18th century.
• Due to very slow movement of ship and several associated risks it is a very important form of insurance.
  The premium of marine insurance is quite less.
• Marine insurance was started by Lloyd’s organization of London about 325 years ago.

(1) Service or facility which creates physical movement of men, materials, goods. animals. etc. from one place (location) to another is called transport. Transportation can be defined as a means of carrying or transferring goods. people, animals, material. etc. from one place to another.

(2) Usually transportation is carried through various modes like land transport (i.e Railways and Roadways), water transport and air transport. It brings mobility both to human resources and physical resources. Transport plays key role in nations economy and economic development. After 1991, in India. development of infrastructure within the country has made progress at rapid rate and today there are different modes of transport operated in India. Transport helps in production. expands market, create place utility in goods and services, brings stability to prices, creates employment opportunities, improves standard of living of the people, provides help during emergency and facilitates economic development.

(1) The term ‘Bank’ Is derived from the French word ‘Banco’ which means a ‘bench’. In olden days, moneylenders used to display coins and currencies on the tables or benches for the purpose of lending or exchanging. An organisation which is dealing with money is called bank. An institution offering certain financial services such as the safe keeping of money and lending money to needy people is called Bank.

(2) According to the Indian Banking Regulation Act, 1949, bankIng company means “any company which transacts the business of banking in India.” The word banking has defined further as “acceptingfor the purpose of lending or investment of deposits of money from the public repayable on demand or otherwise and withdrawable by cheques. drafts, order or otherwise.” Bank accepts deposits repayable on demand by cheques or drafts and lends or invests the surplus money as a part of normal business. It makes a profit by accepting deposits at a lower rate of Interest and lending money at a higher rate of Interest.

(1) The term ‘communication’ means any interchange of ideas, messages, facts, information, feelings and emotions among two or more persons In a way that they share common understanding about it. It Is a process of giving away or passing on any information by any person to some other person with the help of some medium. Thus, receiver after receiving the message understands it in the desired form and acts accordingly.

(2) Means of communication consist of magazines, newspaper, post and telegraphs. telephone. Internet, e-mail, television, etc. Communication facilitates transmit business Information more quickly among the businessmen. The difficulty of distance is effectively solved by various means of communication. Effective communication facilitates the development and growth of domestic and international markets which bring prosperity to the country.

Aviation (Air) insurance:

• Insurance against claims and losses arising from maintenance and use of aircrafts or airports including damage to aircraft, personal injury, etc. is called aviation insurance.
• In 19th century, goods started getting transported through air and so began the air insurance.
• Air freights are very costly and so only those goods that are light weight and highly valuable are transported through air.
• The premium of air insurance is much higher than marine and rail/road transport.

• The roots of insurance are connected with society and it is an agreement between two parties.
• Insurance is not an ordinary contract and so we cannot compare it with ordinary rules or laws. Insurance is a special type of contract and hence has got specific principles too.

Principles of insurance are as follows:
1. Principle of utmost good faith:

• The main objective of selling insurance is not profit but to fulfill specific social objectives of providing financial compensation in cases of pre-defined risks.
• This principle says that both the parties i.e. the insurer and insuree should have mutual and complete faith on each other. This means that the insuree will claim for financial losses only for genuine and pre-defined losses as mentioned in the insurance policy and the insuree will pay the full compensation in case of genuine claims raised by the insuree.
• While entering into an insurance contract both the parties i.e. the insurer and insuree should provide all the necessary information even if it is not asked by either party but if it is felt that the information may have an impact on the contract during claims.
• Any information that one hides and if it affects the claims made for financial loss can be termed as fraud and a breach of the principle of utmost good faith.
• In case the insuree provides wrong information or does not provide some important information during signing the contract and if he faces a financial loss, the insurance company i.e. the insurer will reject the claim and will not refund the paid premium. The insuree then loses all the rights of compensation for the risk.

2. Principle of indemnity:

• Indemnity means protection against future loss. The main objective of an insurance contract is to compensate a future loss.
• This principle is used to decide how much amount does an insurance company needs to pay to the insuree in case he faces a loss.
• The insuree can only get the actual compensation for his loss and cannot earn profit i.e. cannot get additional amount other than pre-decide in his insurance policy.
• In case the insuree takes the insurance for a lesser amount then he will get only that much amount for which he has taken the insurance. The remaining loss will have to be borne by him.
• For example, if the market value of a car is rupees five lakh and if the insuree takes insurance only of rupees two lakh and if his car gets stolen he can claim for a loss of rupees two lakh only i.e. the insured value.

3. Principle of insurable interest:

• The person seeking insurance should have insurable interest for which he ‘ seeks insurance. In other words, the insuree should have interest in recovering the financial loss he suffers.
• For example, if your house gets damaged/destroyed you will be interested in having a financial recovery for it but if your neighbour’s house gets destroyed you may have sympathy but no insurable interest in his house.

4. Principle of subrogation:

• As per this principle when the insuree claims for the financial loss he encountered and receives the compensation, he loses the ownership of the damaged product.
• For example, in case of accident to a vehicle, after receiving the compensation from the insurance company, the insuree cannot sell the damaged part because thereafter the insurance company becomes the owner of that part.
• This principle is not applicable in life insurance.

(c) Automatic Teller Machine

Very small aperture terminal service is satellites based communication service used’ to provide innovation applications, such as tele-medicine, newspapers on line, market rates and teleeduction. This is an uninterrupted service and is better than land based services.

(a) Life Insurance 

Cellular companies offer their satellite-based media service. A small dish -antenna and a set top box are needed to receive the service through multiple channels. The service can be viewed on television. It avoids dependence on the services offered by the cable network service provider.

(d) All of the above

Direct to Home services.

Primary warehousing services include the following: 

1. Consolidation: Warehouse receives and consolidates goods from different production stations and dispatches it to customer on a single transportation shipment. 

2. Break the Bulk: Warehouse breaks the bulk received according to the requirements of the client. 

3. Stock Piling: The next function of warehousing is the seasonal storage of goods to select business.

Secondary Functions of a Warehouse 

1. Protection of goods: A warehouse provides protection to goods from loss or damage due to heat, dust, wind and moisture, etc. It makes special arrangements for different products according to their nature. It cuts down losses due to spoilage and wastage during storage. 

2. Risk Bearing: Warehouses take over the risks incidental to storage of goods. Once goods are handed over to the ware housekeeper for storage, the responsibility of, these goods passes on to the ware housekeeper. Thus, the risk of loss or damage to goods in storage is borne by the warehouse keeper. Since it is bound to return the goods in good condition, the warehouse becomes responsible for any loss, theft or damage etc., thus, it takes all precautions to prevent any mishap. 

3. Financing: When goods are deposited in any warehouse, the depositor gets a receipt, which acts as a proof about the deposit of goods. The ware houses can also issue a document in favour of the owner of the goods, which is called warehouse-keeper’s warrant. This warrant is a document of title and can be transferred by simple endorsement and delivery. So while the goods are in custody of the ware housekeeper, the businessmen can obtain loans from banks and other financial institutions keeping this warrant as security. In some cases, warehouses also give advances of money to the depositors for a short period keeping their goods as security. 

4. Processing: Certain commodities are not consumed in the form they are produced. Processing is required to make them consumable. For example, paddy is polished, timber is seasoned, and fruits are ripened, etc. Sometimes warehouses also undertake these activities on behalf of the owners. 5. Grading and branding: On request warehouses also perform the functions of grading and branding of goods on behalf of the manufacturer, wholesaler or the importer of goods. It also provides facilities for mixing, blending and packaging of goods for the convenience of handling and sale.

(d) All of the above

• Roadways are one of the most convenient and flexible way to transport. Through this mean one can transport at own speed and time, change direction of vehicle as per need, take halt where ever one wishes and reach the destination. Such flexibility is not available in other means of fast , transport. Moreover one can also provide doorstep delivery of goods and humans.
• Buses are used to effectively transport people where as trucks are used to transport goods.
• With increasing population and excessive vehicles the problems of air pollution, noise pollution, traffic congesion and parking have increased tremendously. To fight this and promote public transport government has started Bus Rapid Transit System (BRTS) in many cities of India.
• Special lanes have been built for these buses which help them to travel very fast. Moreover, the duration between buses is kept quite less due to which one does not need to wait much for another bus and can reach his destination on time.
• In Gujarat, BRTS service is available in cities like Ahmedabad, Surat, Rajkot, etc.

Transport/transit through pipelines:

• Pipelines are a very effective means of transport for transporting gaseous and liquid products.
• Pipelines are used for transporting water, petroleum, natural gas, etc.
• They are also very useful for removal of sewage and as drainage.
• For example, pipeline has been laid to transport gas from few parts of India Oil and petroleum products are transported through pipelines in the state of Assam, Bihar, Gujarat, Uttar Pradesh and Haryana.

• Oceans, rivers, lakes and canals are some of the waterways on which ships, boats, ferries, hovercrafts, etc. move and transport goods and people.
• The goods may be transported through sea and then land and again to another part of sea in places where the sea is not present on a continuous stretch. Hovercrafts have a giant high speed fan and a balloon like structure at the bottom in which air is filled to move them. Canals are constructed across rivers and dams which serve as means of transport.
• Trade and commerce between countries is mainly done through waterways.
• Even though waterways is a slow means of transport it is widely used because of its ability to carry a variety of goods of any size and form at a much lower cost than airways.

Human operated:

• When human labour is used to transport goods or other humans it is called human operated transport.
  Although it is quite laborious it is environment friendly.
• At places like Delhi and Kolkata people us^ pedal rickshaw to transport people within city.
• Hand carts and pedal rickshaws are used in almost all parts of India to transport goods from one place to another.

Mode of transport which helps to get goods and passengers at their door - Road transport 

Explanation: 

Road transport facilitates the movement of goods and people from one place to another by means like car, cycle, truck and bus. Road transport offers door-to-door service, as it is the transport of goods and people from one place to another via roads.

The costliest mode of transport - Air transport 

Explanation: 

Air transport is the costliest mode of transportation of goods and passengers, mainly because of its expensive fuel and high operational costs. However, this mode is very effective and time-saving, especially for longdistance transportation. It is also effective during situations of natural calamities like earthquakes and floods.

a. According to the principle of indemnity, the insurer assures the insured that he/she will bring the insured back to the position he/she was in prior to the occurrence of an uncertain event. Because in case of life insurance, there can obviously be no compensation for the life lost, the principle of indemnity is inapplicable here.

b. Mitigation is the principle that states that the insured must take all necessary measures and steps to control and minimise the loss. In other words, the insured should not remain inactive when an accident occurs.

c. A fixed, regular, periodic payment made by a policyholder for his/her insurance is called premium. The policyholder pays the premium periodically which covers him against the risk for a fixed period of time under a given insurance plan.

d. Cold storage is used to preserve goods that are perishable in nature, i.e., the goods that get destroyed easily. Fish, dairy products, fruits, flowers, etc., are generally kept in these storage warehouses at very low temperatures so that they can be preserved for a longer duration and used later on.

e. Some goods are produced in a specific period but are consumed or demanded throughout the year. These goods are stored in warehouses to ensure their regular supply in the market. Warehouses also perform various functions such as consolidation, bulk breaking and stock piling.

a. Road transport offers door-to-door service—that is, passengers or goods are picked up from a certain location and transported to the final destination. It is capable of reaching out to even those places where other modes of transport cannot reach, for instance, hilly areas. 

b. The carrying capacity of rail transport is huge. Rail transport helps in carrying heavy and costly goods conveniently and safely, even to distant locations. It is a safe and secure means of transporting goods from one place to another. 

c. Air transport is the costliest mode of transportation of goods and passengers, mainly because of its expensive fuel and high operational costs. However, this mode is the most effective and time-saving, especially for long-distance transportation. It is also effective during situations of natural calamities like earthquakes and floods. 

d. The department comes under the Ministry of Communication and Information Technology and is administered by the Government of India. The department offers financial services, mail services and direct post services. 

e. Courier services are governed and owned by private companies. Under these services, goods and mails are transported from one place to another. Courier companies ensure speedy and safe transmission of goods from one place to another. DHL, FedEx and TNT are examples of courier companies.

a) The Reserve Bank of India (RBI) is the central bank of India. It is the apex bank that supervises the monetary and banking system of India. It is responsible for maintaining the economic stability of the country. It prints notes and lays down rules and regulations for commercial banks.

b) Overdraft facility is given to current account holders. It is a temporary arrangement whereby a customer is allowed to withdraw amount more than that prevailing in his/her account. For the overdraft facility, the bank charges interest on the amount overdrawn.

c) Savings accounts are basically meant for people who have fixed incomes (like salaried people). This type of account encourages the habit of saving among people.

d) An automatic teller machine (ATM) is an electronic machine that offers convenience to customers, as they can deposit or withdraw money from their accounts anytime without having the need to visit the branch of the bank. ATMs provides 24×7 service facility.

e) A fixed deposit account is an account in which deposits are kept for a fixed period of time. Also, deposits cannot be withdrawn from this account before maturity. More the time period, greater is the interest rate earned. The rate of interest is decided by the RBI.

Road transport is suitable for short distance. 

Explanation: 

Road transport is suitable for short distances, as its carrying capacity is limited. It also offers door to door service. Thus, it is not economical for long-distance transportation.

(A) Meaning : Road transport is the oldest mode of transport. It means and includes various means of transport which move on the surface of the earth without the use of railway tracks. Roads are the means which connect people and places on the surface of the land. It provides connectivity on any terrain (land) in comparison to other modes of transport. The different types of vehicles plying on the road include bullock carts, cycles, motor-cycles, autorickshaws, cars, tempos, trucks, buses, etc. They are called means of road transport.

(B) Advantages : 

The advantages of road transport are explained as follows:

(1) Cheaper mode of transport : As compared to other modes of transport, road transport is relatively cheaper mode of transport. Its operational cost is relatively low.

(2) Useful for perishable goods : Road transport is suitable and more useful to carry and deliver perishable goods such as milk, vegetable, fish, mutton, fruits, flowers, eggs, etc., over a short distance and that too at a faster speed.

(3) Flexible mode of transport : Road transport is flexible mode of transport because loading and unloading of goods are possible at any destination. Similarly, it is more flexible because of the choice of different routes, timings and types of vehicles.

(4) Door-to-Door service : Road transport facilitates door-to-door delivery of goods. It carries the goods and passengers directly to the go downs, factories and places of residence, i.e. user.

(5) Good reach : Roads constructed in plain areas and also in hilly areas can be used by different road vehicles such as trucks, tempos, motor cars and even carts driven by animals for carrying goods and passengers from one place to another. Wherever any other mode of transport cannot reach, road vehicles can easily reach and thus cover even hilly areas.

(6) Less capital investment : The cost of construction and maintenance of a road system is relatively less than that of railways.

(C) Disadvantages : 

The disadvantages of road transport are explained as follows:

(1) Not economical for long distance : In comparison to other modes of transport carrying capacity of road transport is very limited. High cost of fuel, tolls, etc. make the road transport uneconomical for long distance transportation.

(2) Not suitable for heavy and bulky goods :

Road transport is not suitable for carrying heavy and bulky goods for any distance and involves high cost.

(3) Affected by adverse weather conditions : Road transport is affected more by adverse weather conditions such as fogs often greatly reducing visibility, heavy rain, floods, landslides, storm, etc.

(4) Accidents : The possibility of road accidents is frequent due to poor condition of roads and negligent drivers.

(5) Causes pollution : The vehicles plying on the road release smokes and gases. So, it creates air pollution which affect the health of the people.

Introduction: - In India, transport plays an important role in nation's economy. Since the economic liberalization of the 1990's, development of infrastructure within the country has progressed at a rapid pace and today there is a wide variety of modes of transport by Land, Water and Air are available in India. Transportation is the movement of people, animal and goods from one location to another. Transport infrastructure consists of the fixed installations necessary for transport, and may be roads, railways, airways, waterways, canals and pipelines and terminals such as airports, railways stations, bus stations, trucking terminals and seaports. India's rail network is the 4th largest and most heavily used system in the world, transporting over 6 billion passengers and over 350 million tons of goods annually. 

1. Helps in production: -Transport system helps the manufacturer to take the raw materials and other requirements quickly from the places, where it is available to the production centers. It helps the movement of the labour from their houses to the place of their work. It also makes possible quick dispatch and distribution of finished goods to the centers of consumption. 

2. Expanding Markets: -It reduces the gap between the producers and consumers. It helps to cover the wider area of market places by making the goods available, whenever need arises. Transport plays an important role in distribution and marketing of goods. Air transport plays an important role in the success of an international trade. 

3. Create Place Utility: -Transport is useful for carrying the goods from the place of its availability to the place of its requirement. Only, because of transport, it has been possible for the people staying at far places to get the benefit of goods, which are not available near to them. E.g. apples from Kashmir are transported throughout the country's Mangoes from India are exported to different countries, etc. 

4. Stability of Prices: -Transport helps to maintain the prices of the goods by providing the goods at the proper time and satisfying the consumer demand for the goods. It helps to maintain balance between the demand and supply of goods, which ensures stability of prices. 

5. Creates Employment: -Transport provides direct employment to transport owners, drivers, mechanics, helpers and so on. It also provides indirect employment by facilitating the movement of goods and people from one place to another. So, it provides direct and indirect employment to the number of people. 

6. Improves standard of Living: -Transport helps people to enjoy a better standard of living by providing them with goods of their choices from faraway places or places of its availability. As transport creates employment, it gives an opportunity to people to earn good amount of income. E.g. imported cars can be transported from foreign countries. 

7. Cost Reduction: -The cost of production and distribution can be reduced with the help of efficient, cheap and quick means of transport. The goods can be sold at low prices which in turn will increase demand and expand market. 

8. Provides help during emergency: -People are badly affected during natural calamities like floods, earthquakes, landslides, etc. and also during riots, bomb blasts, accidents, fire, etc. transport helps the people by providing them with the necessities like food, water, medicines, etc. and also helps them to travel to their destinations. 

9. National Defense: -Transport plays an important and special role in the defense of the country. An efficient transport network system ensures quick movement of troops, arms and ammunitions from one place to another. 

10. Economic development: -Economic development of a country depends on a good network of transport system and industrial development. Good transport system also provides employment opportunity; new industries are established where there is a good network of transport. This all gives rise to economic development of a nation.

Transport plays a major role in our lives. It facilitates the movement of goods, raw materials and labour from one place to another. 

Some important functions of transport are as follows: 

i. Aids in the production process - Transport helps traders or manufactures to procure raw materials from far-off places and from places where they are available at the cheapest rate. Hence, it helps in procuring raw materials for production. 

ii. Helps in the expansion of markets - Through transportation, sellers or traders can sell their goods in the markets that are far-off. Thus, it aids in the expansion of markets as well. 

iii. Stabilises prices - Transportation helps in making the goods available whenever and wherever they are in demand. Thus, it helps in maintaining price stability. 

iv. Creates employment - Transportation creates direct employment. It employs drivers, mechanics, helpers, etc., in the process. 

v. Improves standard of living - It improves the standard of living of the people by making a wide variety of goods available to them and by creating employment opportunities for them.

Banks are financial institutions that deal in money and credit. They accept deposits from the general public and extend loans for various purposes such as consumption and investment. They offer a rate of interest on the deposits (borrowing rate) and charge a rate of interest on the amount they lend (lending rate). 

The following are the different types of banks: 

i. Commercial banks - These banks are governed by the Indian Banking Regulation Act of 1949. They provide credit to the general public. Commercial banks are of three types: 

a. Public sector banks - These are the banks in which the majority of the stake is held by the Government of India or Reserve Bank of India. State Bank of India and Bank of Baroda are the examples of public sector banks. 

b. Private sector banks - These are the banks in which the majority of the stake is held by private parties. Bank of Rajasthan and ING Vyasa Bank are the examples of public sector banks. 

c. Foreign sector banks - These banks are registered in foreign countries. Their headquarters are also located in foreign countries. HSBC and American Express are examples of foreign sector banks. 

ii. Co-operative banks - These banks are governed by the provisions of the State Co-operative Societies Act. They provide cheap credit to their members only. They are of three types: 

a. Primary credit banks - These are formed by the members of one locality such as a village or town. The borrowers and depositors all belong to the same society. 

b. District central co-operative banks - These banks have their operations at the district level and they act as a link between primary credit societies and state co-operative societies. 

c. State co-operative banks - These banks have their operations in a state. They mobilise savings from the depositors and channelise them to various sectors. 

iii. Specialised banks - These banks provide credit to industrial units and export-import units. They are classified into three types: 

• Export-Import Bank of India (EXIM Bank) - The bank provides funds for setting up an export or import business.Small Industries Development 

• Bank of India (SIDBI) - It was set up to provide direct and indirect financial assistance under different schemes. It caters to the credit and finance requirements of small-scale enterprises. 

• National Bank for Agricultural and Rural Development (NABARD) - It was established in 1982 with the main objective of promoting rural development and integrating efforts in this direction. 

iv. Central bank - This is the apex financial institution that regulates and controls the activities of all banks and financial institutions in the country. The Reserve Bank of India (RBI) is the central bank of India. 

v. Development banks - These banks provide financial assistance to business houses so that they can finance their capital requirements, expansion and modernisation. State Financial Corporation’s (SFCs) and Industrial Financial Corporation of India (IFCI) are examples of development banks. 

vi. Regional rural banks - These banks were established in 1975 to extend banking facilities to the rural areas. The main objective of these banks is to provide credit to small traders, farmers, etc. 

vii. Exchange banks - These banks remit money from one country to another, discount foreign bills, finance export and import of goods, etc. Bank of Tokyo and Bank of America are examples of exchange banks. 

viii. Indigenous bankers - These are domestic bankers that carry out banking activities in the country. These banks mainly deal in "Hundis" and promissory notes. Also, the rate of interest charged by the banks is very high. 

ix. Savings bank - These banks accept small deposits from the public having a fixed income. The main objective of these banks is to encourage the habit of saving in people.