12th OCM Chapter 4 Exercise (Business Services) Maharashtra Board – Free Resource

12th OCM Chapter 4 Exercise

Chapter 4 – Business Services

Q.1 A) Select the correct option and rewrite the sentences.

1) Door-to-door service is provided by _____ transport.
a) railway
b) road
c) air

2) _____ creates time utility.
a) Warehouse
b) Transport
c) Communication

3) _____ warehouses provide facilities for perishable commodities.
a) Bonded
b) Cold storage
c) Government

4) _____ policy covers all types of risks of a vessel while it is anchored at the port for a particular period of time.
a) Port risk
b) Voyage
c) Floating

5) Principle of _____ is not applicable to life insurance.
a) insurable interest
b) utmost good faith
c) indemnity

Q.1 B) Match the correct pairs.

Group A	Group B
a) Air Transport	1) Time utility
b) Warehousing	2) Intangible in nature
c) Money remittance	3) Fastest mode of transport
d) Pipeline Transport	4) April, 2019
e) Business Service	5) Western Union Money Transfer
	6) Fixed deposit account
	7) Petroleum and gas
	8) Tangible
	9) Place utility
	10) Savings account

Answers.
a. 3) Fastest mode of transport
b. 1) Time utility
c. 5) Western Union Money Transfer
d. 7) Petroleum and gas
e. 2) Intangible in nature

Q.1 C) Give one word/phrase/term for the following statements.

1) These warehouses are owned, managed and controlled by central and state governments or public authorities.
Answer: Government warehouse 

2) An art of exchanging ideas, facts, information etc. from one person or entity to another.
Answer: Communication

3) A rail system in which the track consists of a single rail or a beam.
Answer: monorail

4) A transport system used to carry petroleum and gases.
Answer: Pipeline transport

5) A ministry that looks after the development of surface transport throughout the country.
Answer: Ministry of Road Transport and Highways

Balbharti Textbook Solutions for other subjects
Solution of all Chapters of OCM
1 – 2 – 3 – 4 – 5 – 6 – 7 – 8

Q.1 D) State whether the following statements are true or false.

1) Business services are important for the growth of business. (True)
2) Current Account is opened by salaried persons. (False)
3) NEFT stands for National Electric Fund Transfer. (False)
4) Air transport is cheapest mode of transport. (False)
5) The Internet is the global system of interconnected computer networks that use the internet protocol suite to link devices worldwide. (True)

Q.1 E) Find the odd one out.

1) Primary credit co-operative society, state co-operative bank, district co-operative bank, exchange bank.
2) NABARD, RBI, SIDBI, EXIM.
3) Direct mail, Logistics post, Business post, Parcel
4) Endowment policy, Whole life policy, Money back policy, Blanket policy.

Q.1 F) Complete the sentences.

1) The term bank comes from the French word Banco.
2) Cold storage warehouses provide facilities for perishable commodities
3) In fleet policy, several ships belonging to one owner are insured under the same policy.
4) Mobile banking refers to the use of banking services with the help of mobile phones.

Q.1 G) Select the correct option.

Group A	Group B
1) RTGS	fund transfer on real-time and gross basis
2) loans to meet long-term capital  requirements	long term loans
3) recurring deposit	Account operated by salaried and businessmen both.
4) Central bank	apex financial institution in banking industry of country
5) SIDBI	Principal financial institution for MSMEs

Q.1 H) Answer in one sentence.

1) What is a debit card?
Answer: A Debit Card is a plastic currency or plastic money. You can use it to buy things when you don’t have cash. Typically, the banks issue a Debit Card to Savings Account holders, and it is linked to your account. 

2) What is ‘subject matter’ in insurance?
Answer: It refers to the subject or entity i.e life, property, cargo or ship etc. which is insured against which the policy is taken.

3) What is a government warehouse?
Answer: These warehouses are owned, managed, and controlled by central and state governments or public authorities.

4) What is air transport?
Answer: Air transport carries the goods and passengers through airways by using different aircraft like passenger aircraft, cargo aircraft, helicopters, etc. This is the fastest mode of transport.

5) What is communication?
Answer: The process of passing any information from one person to another with the help of some medium is termed as communication.

Q.1 I) Correct the underlined word and rewrite the following sentences.

1) Overdraft facility is available for savings bank account holders.
Answer: Current

2) Services are tangible in nature.
Answer: intangible

3) Insurance helps to maximize the risks in the business.
Answer: minimize

4) The foreign bank is the apex financial institution in banking industry in the country.
Answer: central

5) RTGS stands for Reasonable Time Gross Settlement.
Answer: Real

Q.1 J) Arrange in proper order

1) Claim, Accident, Taking the policy, Compensation
Answer:
a) Taking the policy
b) Accident
c) Claim
d) Compensation

2) Email, Inland letter, Courier
Answer:
a) Inland letter
b) Courier
c) Email

Q.2 Explain the following terms/concepts.

1) Transport
Answer: Transportation is the movement of people, animals, and goods from one location to another location or it can be defined as a means of carrying goods and people from one place to another place.

2) Communication
Answer: Communication is the art of exchanging ideas, facts, information, etc. from one person or entity to another. The process of passing any information from one person to another with the help of some medium is termed as communication. Communication is a very simple process where the message is transferred from a sender to the receiver.

3) Banking
Answer: As per The Indian Banking Regulation Act, 1949 banking company means “any company which transacts the business of banking in India” and the word banking has been defined as “accepting for the purpose of lending or investment of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, and order or otherwise. “

4) Insurance
Answer: Insurance is a means of protection from financial loss. It is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss. Insurance is a contract between the insurer and the insured, whereby the insurer agrees to compensate the insured against loss. The insured has to pay a certain fixed sum of money on a timely basis to the insurer.

5) Warehousing
Answer: Warehousing refers to storage of goods and consists of all those activities which are connected with storage and preserving of goods. It is a means of storing goods. Warehousing can be defined as a group of activities connected with the storing and preserving of stored goods from the time of production till the time of consumption.

Balbharti Textbook Solutions for other subjects
Solution of all Chapters of OCM
1 – 2 – 3 – 4 – 5 – 6 – 7 – 8

Q.3 Study the following case/situation and express your opinion.

1) Ms.Harshali started new business two years ago. Her customers are located in different parts of the country and hence they are directly depositing bill amount in her business account. At the same time she used to pay various payments from this account only.
i) Identify Type of account maintained by Ms. Harshali.
ii) Suggest any one modern way of money transfer to Ms.Harshali.
iii) What kind of facility does she get on her bank account?

Solution:
1) Ms. Harshali maintains current account.
2) NEFT stands for National Electronic Fund Transfer is one of the modern ways of transferring money. Ms. Harshali can use this facility.
3) MS. Harshali gets overdraft facility on her current account.

2) Mr. Jagan is a salaried person. He wants to take policy for his two children which assures them protection as well as completes their financial needs once they become major by age.
i) Suggest to him a policy that can satisfy the requirements of his children.
ii) Who are beneficiaries of the policy?
iii) In the above case which principle is involved?

Solution:
1) Mr. Jagan a salaried person should take a Child insurance policy to satisfy the requirement of his children.
2) Mr. Jagan’s children are the beneficiaries of this policy.
3) In the above case Principle of Insurable interest is involved.

3) Mr. Sharan is a successful manufacturer. He is having production units at various locations. He is having multiple production units, he has a large stock of raw material and finished goods. He is worried about safeguarding goods from any unwanted financial loss. He also required to transfer raw material and finished goods from one unit to other but does not have any facility for that. He also requires funds for expansion.
i) Name the service which will help him to safeguard goods from any damage?.
ii) Which service will help him to remove the difficulty of place?
iii) From which service sector will he get financial support?

Solution:
1) Warehousing is the service that will help him to safeguard goods from any damage.
2) Transport service will help him to remove the difficulty of place.
3) Mr.Sharan will get financial support from Banking Sector.

4) Mr. Amit is a businessman. He has his own factories in Pune and Nashik. He lives in Pune with his wife and 2 daughters aged 5 and 8 years.
i) Can Mr. Amit take a life insurance policy for his wife and 2 children?
ii) Can Mr. Amit take a marine insurance policy for his factories?
iii) Which type of insurance should Mr. Amit take for protecting his factories from loss due to fire?

Solution:
1) Yes, Mr. Amit can take a life insurance policy for his wife and 2 children.
2) Mr. Amit cannot take a marine insurance policy for his factories.
3) Mr. Amit can take a floating fire insurance policy for protecting his factories from loss due to fire.

Q.4 Distinguish between.

1) Duty Paid Warehouse and Bonded Warehouse

Points	Duty Paid Warehouse	Bonded Warehouse
1) Meaning	If an importer faces any problem in the transportation of goods, after making payment of duty, then goods can be stored at a duty-paid warehouse.	Bonded warehouses are licensed by the government to accept imported goods for storage until  the payment of custom duty.
2) Ownership	These warehouses are owned and managed by public authorities.	These warehouses are owned and managed by public or private authorities.
3) Supervision	These warehouses are free from the supervision of customs authorities. However, they are controlled by port authorities.	These warehouses are under the close supervision of customs authorities.
4) Market	Goods stored in duty-paid warehouses are meant for the domestic markets.	Goods stored in bonded warehouses are meant for re-export.
5) Delivery	Delivery of goods is given only after the payment of rent and service charges of the warehouse.	Goods are held in bond and its delivery is given only after the payment of import duty.
6) Location	These are located near port & dock area.	These are located within port & dock area.

2) Central Bank and Commercial Bank

Points	Central Bank	Commercial Bank
1) Function	The main function of the central bank (RBI) is to regulate the money supply in the country.	The main function is to accept deposits from public for lending to industry and others.
2) Printing of currency	The central bank can print currency notes.	The commercial banks cannot print currency
3) Acceptance of deposits	The Central Bank does not accept deposits from public.	The commercial bank accepts deposits from public
4) Loans	The Central bank provides loans to bankers and financial institutions	Commercial banks provide loans to industry and commerce.
5) Ownership	It is owned and controlled by the government of India	It can be owned by private and /or by government agencies.
6) Number of banks	There is only one Central Bank (RBI) in India.	There are many commercial banks in India.
7) Monetary policy	The Central Bank frames the monetary and credit policy.	The commercial banks do not frame any monetary policy

3) Road Transport and Air Transport

Points	Road Transport	Air Transport
1) Speed	Road transport has limited speed due to bad road conditions, accidents, etc.	It is the fastest mode of transport.
2) Carrying capacity	It has limited carrying capacity	It has limited carrying capacity
3) Cost	It requires limited capital investment in terms of construction of roads, vehicles, and their maintenance.	It uses airways that are natural  and hence, there is no cost involved. However huge cost  of construction of aircraft involved. These costs are way high compared to other modes of  transport.
4) Distance	Recommended for a short distance.	Suitable for long distances.
5) Charges	Transport charges are not fixed due to increased fuel prices	Transport charges are very high.
6) Door-to-door service	It provides door-to-door services.	It does not provide door-to-door services.
7) Means of Transport	It uses animals, animal carts, motorcycles, three and four-wheelers.	It uses aircraft, helicopters, jets, etc.

4) Life Insurance and Marine Insurance

Points	Life Insurance	Marine Insurance
1) Meaning	A contract whereby the insurance company undertakes to pay a certain sum of money either on death or maturity (whichever is earlier) for a consideration (premium)	A contract whereby the insurance  company undertakes to pay  compensation to insured in case  of loss to him due to dangers  (perils) of the sea.
2) Policy taken by	It can be taken by an individual  for his own life or for his family  members.	It can be taken by exporters,  importers and shipping companies etc.
3) Subject matter	In life insurance, the life of the  insured is a subject matter	In Marine insurance, goods in the ship, cargo, and freight are the subject matter.
4) Tenure	The policy can be issued for any number of years, even until the death of the assured.	It is generally for a short period  and may range from one month  to a year. Normally it does not  exceed one year.
5) Compensation	It is paid either on death or maturity whichever is earlier.	It is paid only if there is loss causing event during the term of the policy.
6) Principle of Indemnity	It is not applicable as human life cannot be valued in terms of money for calculating the actual loss.	It is applicable as insurance  company compensates for the  financial loss and the insured is brought back to the same financial condition that he was before the event.
7) Number of Policies	Insured can take any number of policies on the same life. Compensation is paid on all the  policies.	Generally, only one policy can  be taken. However, double insurance is possible. However,  compensation does not exceed  the actual loss.
8) Beneficiary	The beneficiary can be insured  (if he survives the selected term)  or else the nominee or the legal  heir on the death of the assured.	The beneficiary is the insured  person or company.
9) Surrender of policy	The policy can be surrendered  before the expiry of the term  subject to certain conditions.	It cannot be surrendered.

5) Savings Account and Current Account

Points	Savings Account	Current Account
1. Meaning	It is that account that is opened by individuals in order to save a part of their income.	It is that account that is maintained by businessmen and others who have regular bank transactions.
2. Withdrawals	Customers can withdraw either by cheques or by withdrawal slips.	Customers can withdraw money by cheques.
3. Documents	The bank gives a passbook, cheque book, and pay-in-slip book to the customers.	The bank gives a passbook, checkbook, statement of account, and pay-in-slip book to the customers.
4. Who opens it	It is suitable for fixed income groups, wages, or salary earners.	It is suitable for traders, businessmen, firms, or institutions.
5. Restrictions	The customer has certain restrictions on withdrawals.	There are no restrictions on the  operation of a current account as long as there is a balance in the acount.
6. Interest Rate	The interest rate is low.	Normally interest is not given.
7. Nature of account	It is of continuous Nature.	It is of continuous Nature.
8. Facilities	No overdraft facility is given.	A temporary overdraft facility is given.

6) Life Insurance and Fire Insurance

Points	Life Insurance	Fire Insurance
1) Meaning	A contract whereby the insurance company undertakes to pay a certain sum of money either on death or maturity (whichever is earlier) for a consideration (premium)	A contract in which an insurer promises to pay compensation to insured if something happens to the subject matter due to fire or related events.
2) Policy taken by	It can be taken by an individual  for his own life or for his family  members.	It can be taken by individuals  for their properties or by  businessmen. For their goods,  properties business liabilities.
3) Subject matter	In life insurance, the life of the  insured is a subject matter	In Fire insurance, the goods and  assets or property of the insured  is the subject matter.
4) Tenure	The policy can be issued for any number of years, even until the death of the assured.	It is generally for a short period  like one year.
5) Compensation	It is paid either on death or maturity whichever is earlier.	It is paid only if there is loss due to fire during the term of policy.
6) Principle of Indemnity	It is not applicable as human life cannot be valued in terms of money for calculating the actual loss.	It is applicable as insurance  company compensates for the financial loss and the insured is brought back to the same financial condition that he was before the event.
7) Number of Policies	Insured can take any number of policies on the same life. Compensation is paid on all the  policies.	Generally, only one policy can be taken but double insurance is possible. However, compensation does not exceed the actual loss.
8) Beneficiary	The beneficiary can be insured  (if he survives the selected term)  or else the nominee or the legal  heir on the death of the assured.	The beneficiary is the insured who has insured the property or goods.
9) Surrender of policy	The policy can be surrendered  before the expiry of the term  subject to certain conditions.	It cannot be surrendered.

7) Road Transport and Rail Transport

Points	Road Transport	Rail Transport
1) Speed	Road transport has limited speed due to bad road conditions, accidents, etc.	It has considerable speed since it runs on tracks that rarely gets disturbed
2) Carrying capacity	It has limited carrying capacity	It has a huge carrying capacity.
3) Cost	It requires limited capital investment in terms of the construction of roads, vehicles and their maintenance.	The cost of construction of trains, and railway tracks is high. Also the maintenance of trains, tracks and stations is high.
4) Distance	Recommended for short distances.	Recommended for both short and long distances.
5) Charges	Transport charges are not fixed due to increased fuel prices	Transport charges are relatively  low and are fixed according to the  distance.
6) Door-to-door service	It provides door-to-door services.	It does not provide door-to-door services
7) Means of Transport	It uses animals, animal carts, motorcycles, and three and four-wheelers.	It uses passenger trains and goods trains.
8) Suitability	It is suitable for transporting goods in relatively smaller quantities for a short distance.	It is suitable for transporting heavy goods in large quantities over long distances.

8) Rail Transport and Air Transport

Points	Rail Transport	Air Transport
1) Speed	It has considerable speed since it runs on tracks that rarely get disturbed	It is the fastest mode of transport.
2) Carrying capacity	It has a huge carrying capacity.	It has limited carrying capacity
3) Cost	The cost of construction of trains,  and railway tracks is high. Also the maintenance of trains, tracks and stations is high.	It uses airways that are natural  and hence, there is no cost involved. However huge cost  of construction of aircraft involved. These costs are way high compared to other modes of  transport.
4) Distance	Recommended for both short and long distances.	Suitable for long distances.
5) Charges	Transport charges are relatively low and are fixed according to the  distance.	Transport charges are very high.
6) Door-to-door service	It does not provide door-to-door services.	It does not provide door to door  services.
7) Means of Transport	It uses passenger trains and goods  train.	It uses aircraft, helicopters, jets,  etc.

9) Current Account and Fixed Deposit Account

Points	Current Account	Fixed Deposit Account
1. Meaning	It is that account that is maintained by businessmen and others who have regular bank transactions.	It is that account where a fixed  sum of money is deposited for a  fixed period.
2. Withdrawals	Customers can withdraw money by cheques.	Customers cannot withdraw during the specified period.
3. Documents	The bank gives a passbook, cheque book, statement of account and pay-in-slip book to the customers.	The bank gives fixed deposits  receipt to the customers.
4. Who opens it	It is suitable for traders, businessmen, firms or institutions.	It is suitable for any person with temporarily idle cash.
5. Restrictions	There are no restrictions on the  operation of a current account as long as there is balance in the account.	The amount becomes due on the expiry of the fixed period. If  withdrawn earlier, then the rate of interest will be less than applicable.
6. Interest Rate	Normally interest is not given.	The interest rate is higher, longer the period, higher will be the rate of interest.
7. Nature of account	It is of continuous Nature.	It is for a fixed period of time except when the fixed deposit  receipt is renewed.
8. Facilities	A temporary overdraft facility is given.	90% of the amount of fixed deposit can be given as a loan.

Q.5 Answer in brief.

1) State four types of deposits.

Answer:
The different types of deposits are explained below.

1) Fixed Deposit

A fixed deposit account is an account where a fixed amount is kept for a fixed period of time bearing a fixed interest rate. The rate of interest is more as compared to a savings bank account and varies with the deposit period. Normally, withdrawal of the amount is not permitted before maturity date. However, depositors can withdraw amount before the maturity date for which bank will reduce the interest rate.

2) Recurring Deposit

It is operated by salaried persons and businessmen having a regular income. A certain fixed sum of money is deposited into the account every month. Withdrawal of accumulated amount along with interest is paid after the maturity date. The rate of interest is higher which is similar to a fixed deposit account. A separate passbook is provided to know the position of RD account.

3) Saving Account Deposit

It is generally operated by those who earn regular or fixed income such as salary or wages. The main aim of this deposit account is to encourage the habit of savings among people. These deposit accounts are meant for the purpose of maximum savings. There are restrictions on withdrawal limits from these accounts. These accounts carry low-interest rates.

4) Current Account Deposit

This account is operated by business firms and other commercial organizations such as hospitals, educational institutions, etc. who have regular banking transactions. In this account, there is no restriction on deposits and withdrawals of amounts. No interest is paid by the bank on this account.

2) State four modes of transport.

Answer:
Generally, transportation is carried through various modes such as railways, roads, waterways, and airways. Modes of transport are as follows:

1) Road Transport

Roads are means that connect people and places on the surface of the land. It provides all-over connectivity in any terrain as compared to other modes of transport. Various means of transport are used under road transport such as bullock carts, cycles, rickshaws, buses, cars, etc.

2) Rail Transport

Transportation of goods and passengers on rail lines through trains is called as rail transport. It occupies an important place in land transport system of our country and is a most dependable mode of transport to carry goods and passengers over long distances. 

3) Air Transport

Air transport carries the goods and passengers through airways by using different aircraft like passenger aircraft, cargo aircraft, helicopters, etc. This is the fastest mode of transport but it does not provide door-to-door service.

4) Water Transport

Water transport refers to the movement of goods and passengers on waterways by using various means like boats, steamers, launches, ships, etc. With the help of these means, goods and passengers are carried to different places, both within as well as outside the country.

3) State four life insurance policies.

Answer:
The different types of life insurance policies are explained below.

1) Whole Life Policy

Under this policy whole life of a person is insured. The insured cannot receive money from insurance company till he is alive. The rate of premium is normally low. The money becomes payable on the death of insured person to the nominee or the legal heir of the deceased policyholder.

2) Endowment Insurance Policy

Insurance is taken for a specific period under this policy. The sum assured along with a bonus is given on the death of the insured to dependents or on the expiry of the specific period, to the insured.

3) Term Insurance Policy

A term insurance policy is taken for a specific period. Term insurance policy has the lowest premium among all insurance policies. Premium is fixed and does not change during the term of the policy. In case of untimely death, the dependents will receive the benefit amount specified in the term life insurance agreement.

4) Annuity Policy

The insured has to pay the premium in a lump sum or in installments over a certain period of time. The insured will receive back a specific sum periodically from the specified date onwards, either for life or for a fixed number of years. It is like a pension payment scheme.

4) State any four features of business services.

Answer:
The following are the features of business services.

1) Intangibility

Service is not a physical product that can be touched or seen. A service can be experienced by the buyer or the receiver. Services lack material form, and therefore they are intangible. Due to intangibility, services cannot be demonstrated like goods, and therefore service providers must create a good impact on the customers by delivering quality services on time.

2) Inseparability

A unique characteristic of services is that the service and the service provider cannot be separated. The presence of service provider is there at the time of delivering services to customers. In case of services production and consumption take place at the same time.

3) Inconsistency

Services are heterogeneous. There can be no perfect standardization of services. Even if the service provider remains the same, the quality of the service may differ from time to time. For example, the same restaurant can give different experiences to two different customers.

4) Perishability

The production and consumption of services are inseparable because storage of services is not possible. Being an intangible transaction there can never be an inventory of services. Unlike goods, they cannot be stored for future sale. For example, the vacant seats of the morning flight of an airline cannot be utilized in the afternoon flight of the same airline.

5) State money remittance services of postal department.

Answer:
The following are the money remittance services of postal department.

1) Electronic Money Transfer (eMO)

A money order is an order issued by the Post Office for the payment of a sum of money to the person whose name is mentioned in the money order. It is sent through the agency of the Post. Office. A ‘Payee’ is the person named in money order as the person to whom the money is to be paid. The advantage of sending money to someone through money order is that the money is delivered at the house or his place of stay.

2) Instant Money Order (iMO)

India Post presents Instant Money Order (iMO), the instant online money transfer service that is instant, convenient, reliable and affordable. iMO is an instant web-based money transfer service through Post Offices (iMO Centre) in India between two resident individuals in Indian territory. One can transfer money from INR 1,000/- to INR 50,000/from designated iMO Post Offices. It is simple to send and receive money.

3) International Money Transfer

Money Transfer Service Scheme is a quick and easy way of transferring personal remittances from abroad to beneficiaries in India. Only inward personal remittances are permissible. Department of Posts, Government of India with the Western Union Financial Services, a state-of-the-art International Money transfer Service is now available through the Post Offices in India, which enables instantaneous remittance of money from around 195 countries and territories to India.

Solution of other subjects
Solution of all Chapters of OCM
1 – 2 – 3 – 4 – 5 – 6 – 7 – 8

Q.6 Justify the following statements.

1) Air transport is fastest mode of transport.

Answer:
a) Air transport carries the goods and passengers through airways by using different aircraft like passenger aircraft, cargo aircraft, helicopters, etc.
b) This is the fastest mode of transport but it does not provide door-to-door service.
c) In hilly or mountainous areas where other modes of transport is not accessible, air transport is an important and convenient mode.
d) Air transport is also suitable mode in case of emergencies like war, medical, natural calamities, rescue operations etc. 

2) Communication is essential for growth of business.

Answer:
a) Communication is the art of exchanging ideas, facts, information, etc. from one person or entity to another.
b) The process of passing any information from one person to another with the help of some medium is termed as communication.
c) Communication is very simple process where message is being transferred from a sender to the receiver.
d) Communication is essential for coordination and coordination helps in the growth of the business.
e) It also improving managerial efficiency that induces the employees in an organization to develop a spirit of cooperation.
Thus, communication is essential for growth of business.

3) Principle of subrogation is applicable to all contracts of indemnity.

Answer:
a) As per the principle of subrogation, after the insured is compensated for the loss due to damage of the property insured, then the right of ownership of such property passes on to the insurer.
b) This principle is applicable only when the damaged property has any value after the event causing the damage.

c) Indemnity means a guarantee or assurance to put the insured in the same financial position in which he was prior to the happening of the uncertain incident.
d) Principle of indemnity is applicable to fire, marine, and general insurance. It is not applicable to life insurance as loss of life can never be measured in monetary terms.
Thus, the principle of subrogation is applicable to all contracts of indemnity.

4) Warehousing is important.

Answer:
a) Warehousing refers to storage of goods and consists of all those activities which are connected with storage and preserving of goods.
b) It is a means of storing the goods.
c) Warehousing helps in timely delivery and proper distribution resulting in increased labour productivity and increased customer satisfaction.
d) It performs wide range of functions such as price stabilization, risk bearing, financing, transportation etc.
e) Warehouses create time utility by preserving the goods till they are demanded.
Thus, warehousing is important.

5) Cash can be withdrawn from ATMs at any time.

Answer:
a) ATM is the abbreviation of Automated Teller Machine. It is popularly known as All Time Money or Any Time Money.
b) There is no specific time limit for withdrawals of cash from ATMs.
c) To avail of this facility, bank installs ATM terminals at places of a public utility such as railway stations, shopping malls, airports, post offices, busy streets, etc.
d) ATM also provides other information like cash deposits, withdrawals, balance in the account, etc.
e) ATM avails twenty-four hours service. Hence, the accountholder can withdraw cash at any time.

Q.7 Attempt the following.

1) Explain money remittance services of the post department.

Answer: Refer to question number 5 (5).

2) Explain marine insurance policies.

Answer:
Types of marine insurance Policies:

1) Voyage Policy

It is a policy in which the subject matter is insured for a specific voyage irrespective of time involved in it. In this case, risk begins only when the ship starts on voyage.

2) Time Policy

In this policy the subject matter is insured for a definite period of time. A time policy cannot be for a period exceeding one year, but it may contain continuation clause. The continuation clause means that if the voyage is not completed within the specified time, the risk shall be covered until the voyage is completed.

3) Mixed Policy

This policy is the combination of voyage and time policy. It, therefore, covers the risk of both, particular voyage and for a specified period of time.

4) Valued Policy

Under this policy, goods are insured for an agreed value between the insurer and insured at the time of taking policy. This facilitates easy settlements of claims in case of such items where it is difficult to assess the real market value.

5) Blanket Policy

This policy is taken for a maximum limit of the required amount of protection and the full amount of premium is paid at the beginning of the policy. This policy describes the nature of goods insured, specific routes, ports, and places of voyage. It covers multiple risks on one property or it covers many properties under the policy.

6) Port Risk Policy

Port risk policy covers all types of risks of a vessel while it is anchored at the port for a particular period of time. This policy is applicable till the departure of the vessel from the port.

7) Composite Policy

This type of policy is purchased from more than one insurer. The liability of each insurer is separate and distinct. This policy is taken when the amount of insurance is very high.

8) Single Vessel Policy

This policy is suitable for small ship owner having only one ship or having one ship in different fleets. It covers the risk of one vessel of the insured.

9) Fleet Policy and Block Policy

In fleet policy, several ships belonging to one owner are insured under the same policy. In block Policy, the cargo owner is protected against damage or loss of cargo in all modes of transport through which his/her cargo is carried i.e. covering all the risks of rail, road, and sea transport etc.

Note: Write any 5-6 points for 5 marks question.

3) Explain types of warehouses.

Answer:
1) Private Warehouses

The private warehouses are owned and operated by big manufacturers and merchants to fulfill their own storage needs. Big business firms which need large storage capacity on a regular basis and who can afford money, to construct and maintain their private warehouses. A big manufacturer or wholesaler may have a network of his own warehouses in different parts of the country.

2) Public Warehouses

A public warehouse is a specialized business establishment that provides storage facilities to the general public for a certain charge. It may be owned and operated by an individual or a cooperative society. It works under a license from the government in accordance with the prescribed rules and regulations. Public warehouses provide storage facilities to small manufacturers and traders at a low cost.

3) Bonded Warehouses

Bonded warehouses are licensed by the government to accept imported goods for storage until the payment of custom duty. These warehouses work under the control of custom authorities. The warehouse keeper is required to give an undertaking or ‘Bond’ that it will not allow the goods to be removed without the consent of the custom authorities. The goods are held in bond and cannot be withdrawn without paying the custom duty.

4) Duty-paid Warehouses

If an importer faces any problem in the transportation of goods, after making payment of duty, then goods can be stored at a duty-paid warehouse. All duty-paid warehouses are public warehouses that are available to all importers. Duty-paid warehouses help the importer as proper care of goods is taken, processing of goods can be done like sorting, re-packing, etc.

5) Government Warehouses

These warehouses are owned, managed, and controlled by central and state governments or public authorities. It is difficult for small farmers, businessmen, traders to own a warehouse, so these government warehouses assist them in storing their goods at a nominal charge.

6) Co-operative Warehouses

These warehouses are owned, managed, and controlled by cooperative societies. They mainly provide warehousing facilities at the most economical rates. These types of warehouses are very useful for farmers and traders and the general public.

7) Cold storage Warehouses

Cold storage warehouses provide facilities for perishable commodities like fruits, flowers, vegetables, dairy products, etc. In cold storage warehouses, goods are stored and refrigerated at very low temperatures so as to preserve them and use them in the future. International trade has become possible due to these warehouses.

4) Explain the utility function of banks.

Answer:
A commercial bank performs utility functions for the benefit of its clients. It provides certain facilities or products to its clients as follows:

1) Issue of Drafts and Cheques

A draft /cheque is an order to pay money from one branch of bank to another branch of the same bank or other banks. A bank issues drafts to its account holders as well as non-account holders whereas cheques are issued only to the account holders. Bank charges commission for issuing a bank draft.

2) Locker Facility

This is a common utility function of any commercial bank. The bank provides locker facility for the safe custody of valuables, documents, gold ornaments, etc.

3) Project Reports

A bank may prepare project reports and feasibility studies on behalf of the clients. Project reports enable the business firm to obtain funds from the market and to obtain clearance from government authorities.

4) Gift Cheques

Banks issue gift cheques and gold coins to account holders as well as to non-account holders. The gift cheques/ coins can be used by the clients for the purpose of gifting on occasions like weddings, birthdays, etc.

5) Underwriting Services

A commercial bank may underwrite the issue of securities issued by companies. If the shares are not fully subscribed, the underwriting bank agrees to take up the unsubscribed portion of the securities.

6) Gold-related Services

Nowadays many banks are providing gold services to its customers. Banks are commercially buying and selling gold or gold ornaments from customers on large-scale basis. Some banks also provide advisory services to its customers in terms of gold funds, gold ETF, etc.

5) Explain modes of traditional communication.

Answer:
Modes of Traditional Communication are as follows:

a. Inland Letter:
Communication is contained on a sheet of paper with a prescribed size & folding. Inland letter card is used for transmission within India only. The written portion of the inland letter is folded and sealed. Only the name and address of the receiver is visible from the outside. Therefore, an inland letter ensures the confidentiality of the message.

b. Envelope:
It enables to send confidential messages as well as enclosures like cheques, photos, resumes, etc. Envelope ensures the safety of documents and confidentiality of messages.

c. Parcel:
Under parcel post services, parcels of a specified size and weight can be sent across the country as well as outside the country. Anything can be sent in a parcel except those items which are prohibited. Parcels can be insured. An extra charge is to be paid for insurance. If the insured parcel is lost in transit, the post office pays the insured amount.

d. Book-Post:
Printed books, magazines, journals, etc. can be sent through book posts. Packets containing books and other printed matter can be inserted in the packets. For each book post parcel/packet, it is necessary to mention “Book Post” on the face of the packet or parcel.

6) Explain the disadvantages of air transport.

Answer:
Air transport carries the goods and passengers through airways by using different aircraft like passenger aircraft, cargo aircraft, helicopters etc. This is the fastest mode of transport but it does not provide door-to-door service.

Following are the disadvantages of air transport

1) It is a relatively expensive mode of transport.
2) It is affected by adverse weather conditions.
3) It is not suitable for short distances.
4) It requires huge investment costs such as the construction of airports, runways, air traffic control towers, etc.
5) Air transport is subject to international restrictions as airplanes of some nations are not allowed to fly over other countries.

7) Describe the role of transport.

Answer:

8) What are the functions of warehouses?

Answer:
Following are the functions of warehouses:

1) Storage

This is the basic function of warehousing. Surplus commodities which are not needed immediately can be stored in warehouses. They can be supplied as and when needed by the customers.

2) Price Stabilization

Warehouses play an important role in the process of price stabilization. It is achieved by the creation of time utility by warehousing. In warehouses, usually large stock of goods is kept. Whenever there is a shortage in the market, goods can be immediately supplied through warehouses, which helps in price stabilization to avoid rise in price due to demand and supply differences.

3) Risk bearing

When the goods are stored in warehouses they are exposed to many risks in the form of theft, deterioration, fire, etc. Warehouses are constructed in such a way that they minimize these risks. A warehouse keeper has to take reasonable care of the goods and safeguard them against various risks. For any loss or damage sustained by goods, warehouse keeper shall be liable to the owner of the goods.

4) Financing

Loans can be raised from the warehouse keeper or from financial institutions against the goods stored by the owner. Goods act as security for the warehouse keeper or for financial institutions. In this manner, warehousing acts as a source of finance for the businessmen for meeting business operations.

5) Grading and Packing

Warehouses nowadays provide the facilities of packing, processing, and grading of goods. Goods can be packed in convenient sizes as per the instructions of the owner.

6) Transportation

Warehouses can provide transportation facilities to bulk depositors. It collects goods from the place of production and also sends goods to the place of delivery at the request of the owner.

7) Time and Place Utility

Warehouses create time utility by preserving the goods till they are demanded. It also creates place utility by providing the goods at the place, where they are required.

8) Processing

Certain commodities are not consumed in the form they are produced. Processing is required to make them consumable. e.g. Paddy is polished, fruits are ripened, etc. Sometimes warehouses undertake such activities on behalf of the owners.

Balbharti Textbook Solutions for other subjects
Solution of all Chapters of OCM
1 – 2 – 3 – 4 – 5 – 6 – 7 – 8

Q.8 Answer the following.

1) What is insurance? Explain principles of insurance.

Answer:
Insurance is a means of protection from financial loss. It is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss. Insurance is a contract between the insurer and the insured, whereby the insurer agrees to compensate the insured against loss. The insured has to pay a certain fixed sum of money on timely basis to the insurer.

Principles of Insurance:

1) Principle of Utmost good faith

In all types of insurance contracts both the parties must have utmost good faith towards each other. The insurer and insured must disclose all material facts clearly, completely and correctly. The insured must provide complete, clear and correct information of the subject matter of insurance to the insurer. Similarly, the insurer must provide relevant information regarding terms and conditions of the contract. Failure to provide complete, correct and clear information may lead to non-settlement of claim. 

For example, Mr. Shantanu has not provided information regarding his heart surgery at the time of taking policy. After his death, insurance company comes to know about this fact. As Mr. Shatanu has not provided correct and complete information at the time of taking policy, insurance company can refuse to give compensation to his family members.

2) Principle of Insurable interest

Insurable interest means some financial interest in the subject matter. The insured must have an insurable interest in the subject matter of insurance. Insurable interest is applicable to all insurance contracts. It is said to have an insurable interest in subject matter, when the existence of that subject matter puts the insured in financial benefit. Whereas nonexistence of subject matter put him into financial loss.

For example,
i) a person has an insurable interest in his own life and property.
ii) a businessman has an insurable interest in the goods he deals and in the property of business.

3) Principle of Indemnity

Indemnity means a guarantee or assurance to put the insured in the same financial position in which he was immediately prior to the happening of the uncertain event. This principle is applicable to fire, marine, and general insurance. It is not applicable to life insurance as loss of life can never be measured in monetary terms. In case of death of the insured, the actual sum assured is paid to the nominee of the insured. Under this principle, the insurer agrees to compensate the insured for the actual loss suffered.

For example, If a property is insured for Rs. two lacs and if the loss by fire is Rs.one lac, then the insured can claim compensation of Rs.one lac only.

4) Principle of Subrogation

This principle is applicable to all contracts of indemnity. As per this principle, after the insured is compensated for the loss due to damage of the property insured, then the right of ownership of such property passes on to the insurer. This principle is applicable only when the damaged property has any value after the event causing the damage.

For example, Mr. A owns a two-wheeler. The vehicle was stolen and subsequently, Mr.A filed a complaint in local police station. Upon receiving report from police,. the insurance company compensated fully Mr.A for the loss of the vehicle. Later on the stolen vehicle was recovered by police. In this situation, the owner of the vehicle does not have any claim over the vehicle as he has already subrogated i.e. transferred the ownership rights of the vehicle to the insurer. The insurer gets every right to sell or to scrap the said vehicle.

5) Principle of Contribution

This principle is applicable to all contracts of indemnity where the insured has taken out more than one policy for the same risk or subject matter. Under this principle, the insured can claim the compensation only to the extent of actual loss either from one insurer or all the insurers. If the one insurer pays full compensation then that insurer can claim a proportionate amount from other insurers from whom insured has taken policy.

For example, Ms. Sayali insures her property of Rs. Two Lac Fifty Thousand with two insurers, with T Insurance Co. for Rs.One Lac(2/5th of the property value) and R Insurance Co. for Rs.One Lac Fifty Thousand (3/5th of the property value). If Ms. Sayali ‘s property is destroyed and the loss is worth Rs. One Lac Twenty Thousand, then both insurance companies will contribute towards actual loss i.e.Rs.One Lac Twenty Thousand. Thus company T will pay RS.48000/- (2/5th of the loss) and company R will pay Rs. 72000/-(3/5th of the loss).

6) Principle of Mitigation of loss

Insured must always try to minimize the loss of the property, in case of uncertain events. The insured must take all possible measures and necessary steps to control and reduce losses. Hence, it is the responsibility of the insured to protect the property and avoid loss.

For example, A house of Mr. Jayant is on fire due to an electric short circuit. In this case, Mr. Jayant cannot remain passive and must try his best to save his house from fire. Mr. Jayant must be active and cannot watch his house burn, just because house is insured.

7) Principle of Causa-Proxima

The principle of causa Proxima means, when a loss is caused by more than one causes, then the proximate cause of loss should be taken into consideration to decide the liability of the insurer. The property is insured against some causes and not against all causes, in such a case, the proximate cause of loss is to be found. If the proximate cause is the one which is insured against, the insurance company is bound to pay compensation and vice versa.

For example, a house was insured against the risk of theft. There was a theft in the house and before leaving, the house was set on fire by thieves. Now, there are two causes of loss, theft and fire, and the nearest cause of loss was fire. As the house was insured against theft and not by fire, the insured will not get any compensation from insurance company for loss by fire. But, he will get compensation for the property lost by theft.

2) Define bank. Explain. Different types of banks.

Answer:
The term Bank comes from the French word ‘Banco’ which means a ‘bench’. In earlier days, money-lenders used to display coins of different currencies in big heaps or benches or tables for the purpose of lending or exchanging.

A bank is a financial institution that deals with deposits and advances and other related services. Bank provides various services related to money or financial requirements of consumers.

There are several types of banks as follows:

1) Central Bank

The central bank is the apex financial institution in banking industry in the country. Every country has their own central bank. In India, The Reserve Bank of India (RBI) is the central bank. The RBI was established in 1935 under the Reserve Bank of India Act, 1934.

2) Commercial Bank

Commercial banks play an important role in economic and social development of a country. Commercial banks perform important functions such as: Primary Functions i.e. accepting deposits and lending of money and Secondary Functions i.e. agency functions and utility functions.
In India, commercial banks are divided into three groups:
a) Public sector banks
b) Private sector banks
c) Foreign banks

3) Co-operative Bank

In India, co-operative banks are registered under Indian Co-operatives Societies Act and regulated under Banking Regulation Act. Co-operative banks are popular in semi-urban and rural areas. The main aim of a cooperative bank is to provide credit to economically backward people, farmers, and small-scale units.
Generally, the co-operative bank works at three different levels:
a) Primary Credit Societies: Primary Credit Co-operative society work at village level.
b) District Central Co-operative Bank: These banks operate at district level.
c) State Co-operative Bank: This bank operates at state level.

4) Industrial Development Banks

These are financial institutions that provide medium and long-term funds to business firms Examples of development banks are Industrial Finance Corporation of India (IFCI), State Finance Corporation (SFC), Maharashtra State Finance Corporation(MSFC), etc.
Some functions of a development bank are as follows:
i) Provision of medium and long-term funds to business units for the purpose of expansion and modernization.
ii) Underwriting of shares issued by public limited companies.
iii) Purchase of debentures and bonds.

5) Exchange Banks

The exchange banks as well as large commercial banks facilitate foreign exchange transactions. Examples of exchange banks are Barclays Bank, Bank of Tokyo, etc.
Some functions of an exchange bank are as follows:
i) Financing foreign trade transactions.
ii) Issue of letter of credit (LC)
iii) Discounting of bills of exchange.
iv) Remittances of dividends, interests, profits, etc.

6) Regional Rural Bank

Regional Rural Banks (RRBs) were established in 1975. These banks are sponsored by large public sector banks. The capital of RRB is contributed by Central Government 50%, State Government 15%, and Sponsored Banks 35%.RRBs mobilize deposits primarily from rural and semi-urban areas and provide loans and advances mostly to small and marginal farmers, agricultural laborers, and rural artisans.

7) Savings Bank

The main objective of savings bank is to encourage savings of the people, especially in rural areas. Examples of such banks include postal saving bank, commercial banks, and cooperatives banks.

8) Investment Bank

These banks provide financial and advisory assistance to their customers. Their clients generally include business firms and government organizations. Investment banks facilitate mergers and acquisitions by undertaking research and providing advice on investment decisions. Generally, investment banks do not directly deal with general public.

9) Specialised Banks

These banks cater to the requirements and provide overall support for setting up business in specific areas.
i) Export and Import Bank (EXIM): This bank provides financial assistance to exporters and importers
ii) Small Industries Development Bank of India (SIDBI): Small Industries Development Bank of India (SIDBI) set up on 2nd April 1990 under an Act of Indian Parliament, acts as the principal financial institution for the promotion, financing and development of the Micro, Small and Medium Enterprise (MSME) sector as well as for coordination of functions of institutions engaged in similar activities.
iii) National Bank for Agriculture and Rural Development (NABARD): It is an apex institution for financing agricultural and rural sectors. NABARD provides both short-term and long-term credit through regional rural banks.

3) What is a warehouse? Explain its different functions.

Answer:
Warehousing refers to storage of goods and consists of all those activities which are connected with storage and preserving of goods. It is a means of storing goods. Warehousing can be defined as a group of activities connected with the storing and preserving of stored goods from the time of production till the time of consumption.

Following are the functions of Warehouses:

1) Storage

This is the basic function of warehousing. Surplus commodities which are not needed immediately can be stored in warehouses. They can be supplied as and when needed by the customers.

2) Price Stabilization

Warehouses play an important role in the process of price stabilization. It is achieved by the creation of time utility by warehousing. In warehouses, usually large stock of goods is kept. Whenever there is a shortage in the market, goods can be immediately supplied through warehouses, which helps in price stabilization to avoid rise in price due to demand and supply differences.

3) Risk bearing

When the goods are stored in warehouses they are exposed to many risks in the form of theft, deterioration, fire, etc. Warehouses are constructed in such a way that they minimize these risks. A warehouse keeper has to take reasonable care of the goods and safeguard them against various risks. For any loss or damage sustained by goods, warehouse keeper shall be liable to the owner of the goods.

4) Financing

Loans can be raised from the warehouse keeper or from financial institutions against the goods stored by the owner. Goods act as security for the warehouse keeper or for financial institutions. In this manner, warehousing acts as a source of finance for the businessmen for meeting business operations.

5) Grading and Packing

Warehouses nowadays provide the facilities of packing, processing, and grading of goods. Goods can be packed in convenient sizes as per the instructions of the owner.

6) Transportation

Warehouses can provide transportation facilities to bulk depositors. It collects goods from the place of production and also sends goods to the place of delivery on the request of the owner.

7) Time and Place Utility

Warehouses create time utility by preserving the goods till they are demanded. It also creates place utility by providing the goods at the place, where they are required.

8) Processing

Certain commodities are not consumed in the form they are produced. Processing is required to make them consumable. e.g. Paddy is polished, fruits are ripened etc. Sometimes warehouses undertake such activities on behalf of the owners.

4) What are Services? Explain in detail different business services.

Answer:
Services are intangible in nature; they are neither manufactured, transported nor stocked. Services cannot be stored for future use hence they are produced and consumed simultaneously. Business services are those services that help in successful running of business. They are intangible in nature, heterogeneous, inseparable, inconsistent, perishable in nature, and require consumer participation.

“Activities, benefits, or satisfactions which are offered for sale, or provided in connection with the sale of goods”.- American Marketing Association

Following are the different business services.

1) Banking

The term Bank comes from the French word ‘Banco’ which means a ‘bench’. In earlier days, money-lenders used to display coins of different currencies in big heaps or benches or tables for the purpose of lending or exchanging.

A bank is a financial institution that deals with deposits and advances and other related services. Bank provides various services related to money or financial requirements of consumers.

2) Insurance

Insurance is a means of protection from financial loss. It is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss. Insurance is a contract between the insurer and the insured, whereby the insurer agrees to compensate the insured against loss. The insured has to pay a certain fixed sum of money on timely basis to the insurer.

There are many types of insurance some of them are:
a) Life insurance
b) Marine Insurance
c) Fire Insurance

3) Transport

In India, transport plays an important role in nation’s economy. Since 1991, the development of infrastructure within the country has progressed at a rapid pace and today there are different modes of transport used such as land, water, air etc.

Transportation is the movement of people, animals and goods from one location to another location or it can be defined as a means of carrying goods and people from one place to another place.

Modes of transport:

a) Road Transport
b) Rail Transport
c) Air Transport
d) Water Transport
e) Mono rail and Metro
f) Ropeways
g) Pipeline

4) Warehousing

Warehousing refers to storage of goods and consists of all those activities which are connected with storage and preserving of goods. It is a means of storing goods. Warehousing can be defined as a group of activities connected with the storing and preserving of stored goods from the time of production till the time of consumption.

Some types of warehouses are:
a) Private Warehouses
b) Public Warehouses
c) Bonded Warehouses
d) Duty paid Warehouses
e) Government Warehouses
f) Co-operative Warehouses
g) Cold storage Warehouses

5) Communication

Communication is the art of exchanging ideas, facts, information, etc. from one person or entity to another. The process of passing any information from one person to another with the help of some medium is termed as communication. Communication is a very simple process where the message is transferred from the sender to the receiver. The receiver after receiving the message understands it in the desired form and then acts accordingly.

5) What is communication? Explain in detail various types of communication.

Answer:
Communication is the art of exchanging ideas, facts, information, etc. from one person or entity to another. The process of passing any information from one person to another with the help of some medium is termed communication. Communication is very simple process where a message is transferred from a sender to the receiver. The receiver after receiving the message understands it in the desired form and then acts accordingly.

Following are various types of communication:
I) Postal Services
II) Modern means of communication

I) Postal Services

The postal services in India come under the Department of Post and Telegraph which is the part of Ministry of Communication and Information Technology.

Types of postal services:

1. Mail Services
2. Specialised Postal Services
3. Money Remittance Services
4. Retail Services

1. Mail Services:
a. Inland Letter:
The written portion of the inland letter is folded and sealed. Only the name and address of the receiver is visible from outside. Therefore, inland letter ensures confidentiality of the message.

b. Envelope:
It enables to send confidential messages as well as enclosures like cheques, photos, resumes etc. Envelope ensures safety of documents and confidentiality of messages.

c. Parcel:
Under parcel post services, parcels of specified size and weight can be sent across the country as well as outside the country.

d. Book-Post:
Printed books, magazines, journals, etc. can be sent through book posts. Packets containing books and other printed matter can be inserted in the packets.

2. Specialised Postal Services:
a. Business Post:
Business Post provides complete mailing solutions right from mail preparation to mail delivery, ideal for small businesses as well as large companies.
b. Logistics Post:
Logistics Post provides business customers a cost-effective and efficient solution, which manages the entire value chain from collection to storage to transmission to distribution across the country. 
c. Bill Mail Service:
Communications in the nature of financial statements, bills, monthly account bills or any such other items of similar nature may be posted by a service provider to customers at least once in 90 days under this service.

3. Money Remittance Services:
a. Electronic Money Transfer (eMO):
A money order is an order issued by the Post Office for the payment of a sum of money to the person whose name is mentioned in the money order. It is sent through the agency of the Post.
b. Instant Money Order (iMO):
India Post presents Instant Money Order (iMO), the instant online money transfer service that is instant, convenient, reliable and affordable. One can transfer money from INR 1,000/- to INR 50,000/from designated iMO Post Offices.
c. International Money Transfer:
Money Transfer Service Scheme is a quick and easy way of transferring personal remittances from abroad to beneficiaries in India. Only inward personal remittances are permissible.

4. Retail Services:
a. Retail Post:
Through ‘Retail Post’ the department offers convenience to the general public by making third-party products and services available in their vicinity through selected Post Offices.
b. e-Post:
Department of Posts has introduced ePOST service. Through ePOST, customers can send their messages to any address in India with a combination of electronic transmission and physical delivery through a network of more than 1,55,000 Post Offices.

II) Modern means of communication:

a. Courier Service:
An individual or a company responsible for the exchange of items between two or more parties is known as a courier service. As a premium service, courier service is usually more expensive than usual mail services. Some examples of courier services are DHL, DTDC, UPS etc. ‘

b. Internet:
The Internet (interconnected network) is the global system of interconnected computer networks that use the Internet protocol suite (TCP/IP) to link devices worldwide.

c. Email:
Electronic mail (email or e-mail) is a method of exchanging mail between people using electronic devices. Today’s email systems are based on a store-and-forward model. Email servers accept, forward, deliver, and store messages.

6) What is road transport? Explain its advantages and disadvantages.

Answer:
Roads are means that connect people and places on the surface of the land. It provides all-over connectivity in any terrain as compared to other modes of transport. Various means of transport are used under road transport such as bullock cart, cycles, rickshaws, buses, cars etc.

Bus Rapid Transit (BRT) systems have been introduced in many states to improve public transport system in India. India has a network of village roads, district roads, state highways and national highways which form the economic backbone of the country.

In India, Ministry of Road Transport and Highways (MoRTH) looks after development of surface transport throughout the country.

Advantages:
1) It is a cheap mode of transport as compared to other modes of transport.
2) Perishable goods can be transported at a faster speed by road carriers over a short distance.
3) It is a flexible mode of transport as loading and unloading is possible at any destination.
4) It provides door-to-door service. Also, it functions as feeder transport to other modes of transport.
5) It helps people to travel and carry goods from one place to another place where any other mode of transport is not available.

Disadvantages:
1) Due to limited carrying capacity road transport is not economical for long-distance transportation.
2) Transportation of heavy and bulky goods through road transport involves high cost.
3) Road transport is affected by adverse weather conditions such as floods, rain, landslides etc.
4) There is a possibility of road accidents which are common.
5) It causes pollution due to emission of gases which affect the health of people.

12th Commerce OCM Textbook Solutions

Chapter Name	Solution Link
1) Principles of Management	Click Here
2) Functions of Management	Click Here
3) Entrepreneurship Development	Click Here
4) Business Services	Click Here
5) Emerging Modes of Business	Click Here
6) Social Responsibilities of Business	Click Here
7) Consumer Protection	Click Here
8) Marketing	Click Here

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