Introduction
Banks offer their account holders a number of services. The services are multi-city or payable at par cheques. This is in addition to anywhere banking, trade services, phone and mobile banking as well as internet banking. Banks also offer credit as well as debit cards and ATM cards. Banks also offer Real Time Gross Settlement (RTGS).
Expansion of Services
In addition to the above services which are offered by all banks, the number of offerings and products by different banks are derivatives and leverage financing. For some elite customers the banks even offer doorstep banking facilities. Some banks have also ventured into wealth management as well as equity trading. San Francisco Banking is one of the best.
Income of Banks
The income of the banks comes from fee based and well as non fund based. Fee based incomes are the major portion of the bank’s income. The ratio of the other incomes to the fee based incomes informs of the size of fee based incomes of the bank. Earlier the revenue driver used to be the treasury income of the public sector banks. However, this is no longer true because of the rise of the interest rates.
The non fund based incomes consist of incomes from financial commitments like guarantees, letters of credit and bankers acceptance etc. Also non fund based incomes come from services rendered by the bank which includes fees when funds are transferred or ATM fees or internet banking fees. There is revenue which is generated from funds transfer from corporate services like cash management, remittances from foreign exchange and retail services like pay orders and drafts too add to the revenues.
Pricing of Services
Banks price their services based on the relationship with the client as well as the nature of the transactions. Normally this is done by differentiating customers on the bases of their profiles. Large corporate segments have bulk transactions and they are also large value transactions as well.
The other segment consists of Small and Medium Enterprises, brokers, other banks and retail segment. In this based on the kind of transaction, the price is set.
High volume and low value transactions of the small and medium enterprises are priced differently to the large corporate which have high volumes and high value transactions as well.
In most cases, the banks pricing is not made public except in cases of retail segment where the tariff is published by the banks.