Bank Theory

Other Financial Services Provided by Banks - Bank Theory Other Financial Services Provided by Banks 1. Distribution of Third Party Products Banks often act as corporate agents for selling third-party products such as mutual funds and insurance policies. This generates fee-based income and helps banks diversify their revenue. 2. Mutual Fund Business Banks distribute mutual fund schemes of various Asset Management Companies (AMCs). They earn a commission (upfront and trail) based on the investment value. Example: If a customer invests ₹5,00,000 in a mutual fund through a bank and the bank earns a trail commission of 0.50% per annum, the bank earns ₹2,500 yearly from that customer. 3. Insurance Business Banks sell life, general, and health insurance products as corporate agents or brokers. Bancassurance is a key strategy here. 4. Social Security Insurance Schemes Banks promote schemes like Pradhan Mantri Je...