Para banking refers to non-core banking activities that are undertaken by banks to enhance their business and provide additional services to customers. Here are some of the common types of para-banking and financial services provided by banks:
- Insurance: Banks often provide insurance products such as life insurance, health insurance, travel insurance, etc. to their customers. These products are either provided by the bank itself or in partnership with insurance companies.
- Mutual Funds: Banks also offer mutual fund investment options to customers. They may offer mutual funds from different fund houses and help customers choose the right investment option based on their risk profile.
- Credit Cards: Banks issue credit cards to their customers, which can be used for making purchases or availing services on credit. Credit card holders need to pay the outstanding balance along with interest.
- Debit Cards: Debit cards are issued by banks to their customers, which can be used to withdraw cash or make purchases. The amount is directly debited from the customer’s account.
- Wealth Management: Banks provide wealth management services to high net worth individuals (HNIs). The services include investment advice, portfolio management, tax planning, estate planning, etc.
- Demat Accounts: Banks also offer demat accounts to customers, which are used for holding and trading shares and securities in an electronic format.
- Online Trading: Banks may also provide online trading platforms to customers, which can be used for buying and selling shares and securities online.
- Forex Services: Banks provide foreign exchange services such as currency exchange, international money transfer, forex trading, etc. to customers.
- Safe Deposit Lockers: Banks also provide safe deposit lockers to customers, where they can store important documents and valuables.
In conclusion, para-banking and financial services provided by banks are aimed at providing additional services to customers and enhancing their business. These services include insurance, mutual funds, credit cards, debit cards, wealth management, demat accounts, online trading, forex services, safe deposit lockers, and more. Customers should carefully evaluate the services offered by different banks and choose the one that best suits their needs.