Distinguish between fund and fee based financial services
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A number of financial
services are offered by banks and other monetary institutions like leasing,
factoring, credit card services, portfolio management, underwriting,
rediscounting of bills, financial consultancy services, depository services,
hire purchases and mutual fund management.
Some financial services are
fund based and others are non fund based.
A fund based
financial service involves credit offered by banks in the form of loans,
overdrafts and other cash transactions.
In a non-fund
based financial service the bank does not deal with funds or cash transactions.
Some examples of this type of service are bonds, letters of guarantee and
letters of credit.
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