A Brief History of Banking

In the recent era, the s tory of "the Banks" commences with the development of the modern  banking system in Middle Ages Europe. At that time, disposable wealth was usually held in the form of gold or s i lver bull ion. For safety, such assets were kept in the custody of the local goldsmith, he usually being the only individual who had a vault on his premises. The gold smith would issue a receipt for the deposit and, to undertake financial transactions, the buyer would withdraw his gold and give it to the seller, who would then deposit it again, frequently with the same goldsmith. As this was a time-consuming process, it became common practice for people to simply exchange smiths' receipts when conducting financial transactions. As time passed, the goldsmiths began to issue receipts for specific values of gold, making buying and selling easier still. The smiths' receipts thus became the first banknotes. The goldsmiths, now fledgling bankers, noticed that at any one time only a small proportion of the gold held with them was being withdrawn. So they hit upon the idea of issuing more of the receipt notes themselves, notes that did not refer to any actual deposited wealth. By giving these receipts to people seeking capital, in the form of loans, the goldsmiths could use the money deposited with them by others to make money for themselves. It was found that, for every unit of gold held by the goldsmith, ten times the sum could be safely issued as notes without anyone usually becoming any the wiser. If a goldsmith held, say, 100 pounds of other people's gold in his vaults, he could issue banknotes to the value of 1000 pounds. As long as no more than 10 percent of the holders of  those notes wanted their gold at any one time, no one would realize the fraud being perpetrated. This practice, known as "fractional reserve lending," continues to this day and is actually the  backbone of the modern banking industry. Banks typically loan ten times their actual financial holdings, meaning 90% of the money they lend does not now, never has, and never will exist. Loans issued by the goldsmiths had to be paid back to them with interest, meaning non-existent money slowly became converted to tangible assets in the form of goods and labor. Should the loan be defaulted upon, the banker had the right to seize the defaulter's property. As time passed, therefore, the goldsmiths became wealthier and wealthier. They had devised a scheme to create money out of thin air and then convert this money into real goods, labor, or property. A loan of money at 12% interest recouped not merely 12% for the banker, but 112%, as it does to this day. As the industrial era

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began, so the potential for furthering this scheme increased exponentially .The goldsmiths

were now fully-fledged bankers, and their ability to create money out of thin air and then convert it into tangible assets enabled them to begin to control whole industries to the point where the worlds of banking and industry became, to all intents and purposes, seamless entities. As the twentieth century dawned, the banking families hit upon a new means to consolidate and increase their gains. They discovered that by periodically restricting the money supply crashes within the emergent stock exchanges of the world could easily be engineered. The most notable example of this was the famous Wall Street Crash of 1929. What the history books usually fail to record is that, in a crash, wealth is not actually destroyed, but merely transferred. The "Crash of '29" al lowed the most powerful of the banking and industr ia l famil ies to absorb the weaker  elements, generating even greater levels of centralized control. As the technological revolution progressed, so the buying up of TV stations and newspapers allowed the creation and control of the mass media. This served to ensure that only a portrayal of events that suited the interests of the el i te banking famil ies would get to publ ic at tent ion - invariably one that all but denied their very existence.

INTRODUCTION ABOUT BANKING SECTOR

In modern age, Banking constitutes the fundamental basis of economic growth. The term bank is being used since long time but there is no clear conception regarding its beginning. According to one viewpoint, in good old days, Italian moneylenders were known as Bane chi or Banacheri,  because these people kept special type of table to transact their business, called Banchi. Origin of the word bank belongs to the word Banchi or to the Greek word Banque.  Both these words refer to some kind of banking. According to another viewpoint, bank originated from the German word (ital) Banque meaning Joint Fund.

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Casa De San Giorgio was the first bank to be established in 1148. The First Public bank of Venice. It was established in 1157.As per Banking Regulation Act, 1949, “Banking” means:

“Accept ing for the purpose of lending or investment of deposit of money from the publ ic , repayable on demand or otherwise and withdraw able by cheque, draft, order or otherwise”

In simple words, bank refers to an institution that deals in money. This institution accepts deposits from the people and gives loans to those who are in need. Besides dealing in money, banks these days perform various other functions such as credit creation, agency job and general service. Bank, therefore, is such an institution, which accepts deposits from the people, gives loans, creates credit and undertakes agency work.

HISTORY OF BANKING IN INDIA

Without a sound and effective banking system in India, it cannot have a healthy economy. The banking system of India should not only be hassle free but i t should be able to meet new challenges posed by the technology and any other external and internal factors. For the past three decades, India's banking system has had several outstanding achievements to its credit. The most striking is its extensive reach. It is no longer confined to only metropolitan or cosmopolitan areas in India. In fact, Indian banking system has reached even to the remote corners of the country. This is one of the main reasons of India's growth process. The government's regular policy for Indian bank since 1969 has paid rich dividends with the nationalization of 14 major private banks of India. Not long ago, an account holder had to wait for hours at the bank counters for getting a draft or for withdrawing his own money. Today,

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he has a choice. Gone are days when the most efficient bank transferred money from one branch to other in two days. Now it is as simple as instant messaging or dialing for a pizza. Money has  become the order of the day. The first bank in India, though conservative, was established in 1786. From 1786 till today, the journey of Indian

Banking System can be segregated into three distinct phases. They are as mentioned below: Phase 1:-Early phase from 1786 to 1969 of Indian Banks

Phase 2:-Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms.

Phase 3:-New phase of Indian Banking System with the advent of Indian Financial &Banking Sector Reforms after 1991. 

Phase I

The Genera l Bank of India was se t up in the year 1786. Next came Bank of Hindustan and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These three banks were amalgamated in 1920 and Imperial Bank of India was established which started as private shareholders banks, mostly Europeans shareholders. In 1865, Allahabad Bank was established and first time exclusively by Indian, Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of  India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935.During the first phase, the growth was very slow and banks also experienced periodic failures  between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline the functioning and activities of commercial banks, the Government of India came up with The Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking Authority. During those days public had lesser confidence in

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the banks. As a result deposit mobilization was a low. However, the savings bank facility provided by the Postal department was comparatively safer. Moreover, funds were largely given to traders.

Phase II

Government took major s teps in Indian Banking Sector Reform af ter independence . In the 1960’s a major portion of nationalization was carried out

with nationalization of seven banks forming subsidiaries of State Bank of India on 19th July 1960. It was the effort of the then Prime Minister of India, Mrs. Indira

Gandhi. Fourteen major commercial banks in the country were nationalized. Second phase of nationalization under Indian Banking Sector Reform was carried out in 1980’s w i t h   s e v e n   m o r e   b a n k s .   T h i s   s t e p   b r o u g h t   8 0 %   o f   t h e   b a n k i n g   s e g m e n t   i n   I n d i a   u n d e r   Government ownership. The following are the steps taken by the Government of India to Regulate Banking Institutions in the Country:

• 1949: Enactment of Banking Regulation Act.

• 1955: Nationalization of State Bank of India.

• 1960: Nationalization of SBI subsidiaries.

• 1961: Insurance cover extended to deposits.

• 1969: Nationalization of 14 major banks.

• 1971: Creation of Credit Guarantee Corporation.

• 1975: Creation of regional rural banks.

• 1980: Nationalization of seven banks with deposits over Rs. 200 crores.

 After the nationalization of banks, the branches of the public sector banks in India experienced ar i s e   o f   a p p r o x i m a t e l y   8 0 0 %   i n   d e p o s i t s   a n d   a d v a n c e s   t o o k   a  

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h u g e   j u m p   b y   1 1 , 0 0 0 % . Banking in the sunshine of Government ownership gave the public implicit faith and immense confidence about the sustainability of these institutions.

Phase III

This phase is characterized by introduction of many more products and facilities in the banking sector due to various reform measures. In 1991, under the chairmanship of M Narasimha, a commit tee of   the same  name was se t  up . Which worked   for the   l ibera l iza t ion  of  banking  practices? The country was flooded with foreign banks and their ATM’s proliferation. Efforts were started to give a satisfactory service to customers. Phone banking and net banking were introduced. The entire system became more convenient and swift. The financial system of India has shown a great deal of resilience. It is sheltered from any crisis triggered by any external macroeconomics shock as other East Asian Countries suffered. This is all due to a flexible exchange rate regime, the foreign reserves are high, the capital account is not yet fully convertible, and banks and their customers have limited foreign exchange exposure.

COMPOSITION OF THE BANKING SYSTEM IN INDIA AS AT THEBEGINNING OF NEW MILLENIUM:-

At present , the number of na t iona l ized banks i s 20 . Severa l Fore ign banks were a l lowed to

o p e r a t e   a s   p e r   t h e   g u i d e l i n e s   o f   R B I .   A t   p r e s e n t   t h e b a n k i n g   s y s t e m   c a n   b e   c l a s s i f i e d   i n following categories:-

PUBLIC SECTOR BANKS

1) Reserve Bank of India

2) State Bank of India and its 7 associate Banks

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3) Nationalized Banks (20 in number)

4) Regional Rural Banks sponsored by Public sector Banks

PRIVATE SECTOR BANKS

1) Old Generation Private Banks

2) New Generation Private Banks

3) Foreign Banks in India

4) Local Area Banks

5) Non Scheduled Banks

CO-OPERATIVE SECTOR BANKS

1) State Co-operative Banks

2) Central Co-operative Banks

3) Primary Agriculture Credit Societies

4) Land Development Banks

5) Urban Co-operative Banks

6) State Land Development Banks

7) Scheduled Co-operative Banks

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DEVELOPMENT BANKS

1) Industrial Finance Corporation of India (IFCI)

2) Industrial Development Bank of India (IDBI)

3) Industrial Credit & Investment Corporation of India (ICICI)

4) Industrial Investment Bank of India (IIBI)

5) Small Industries Development Bank of India (SIDBI)

6) National Bank for Agriculture & Rural Development (NABARD)

7) Export-Import Bank of India(EXIM)

BANK

A bank is a commercial or state institution that provides financial services,

including issuing money in form of coins, banknotes or debit cards, receiving deposits of

money, lending money and processing transactions. A commercial bank accepts deposits

from customers and in turn makes loans based on those deposits. Some banks (called

Banks of issue) issue banknotes as legal tender. Many banks offer ancillary financial

services to make additional profit; for most banks also rent safe deposit boxes in their

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branches. Despite common assumptions, banks do not create money; banks

merely change debt from one form (loans) to another (banknotes).

Currently in most jurisdictions commercial banks are regulated and require

permission to operate. Operational authority is granted by bank regulatory authorities who

provide rights to conduct the most fundamental banking services such as accepting

deposits and making loans. A commercial bank is usually defined as an institution that

accepts both deposits and makes loans; there are also financial institutions that provide

selected banking services without meeting the legal definition of a bank. Banks have

influenced economies and politics for centuries. The primary purpose of a bank was to

provide loans to trading companies. Banks provide funds to allow businesses to purchase

inventory, and collected those funds back with interest when the goods were sold. For

centuries, the banking industry only dealt with businesses, not consumers. Commercial

lending today is a very intense activity, with banks carefully analyzing the financial

condition of its business clients to determine the level of risk in each loan transaction.

Banking services have expanded to include services directed at individuals and risks in

these much smaller transactions are pooled.

BANKS IN INDIA

In India the banks are being segregated in different groups. Each group has its own

benefits and limitations in operating in India. Each has its own dedicated target market.

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Few of them only work in rural sector while others in both rural as well as

urban. Many, even, are only catering in cities. Some are of Indian origin and some are

foreign players.

Major Banks in India

ABN-AMRO Bank

Abu Dhabi Commercial Bank

American Express Bank

Andhra Bank

Allahabad Bank

Bank of Baroda

Bank of India

Bank of Maharashtra

Bank of Punjab

Bank of Rajasthan

Bank of Ceylon

BNP Paribas Bank

Canara Bank

Catholic Syrian Bank

Central Bank of India

Centurion Bank

China Trust Commercial Bank

Citi Bank

City Union Bank

Corporation Bank

Indian Overseas Bank

Indus Ind Bank

ING Vysya Bank

Jammu & Kashmir Bank

JPMorgan Chase Bank

Karnataka Bank

Karur Vysya Bank

Laxmi Vilas Bank

Oriental Bank of Commerce

Punjab National Bank

Punjab & Sind Bank

Scotia Bank

South Indian Bank

Standard Chartered Bank

State Bank of India (SBI)

State Bank of Bikaner & Jaipur

State Bank of Hyderabad

State Bank of Indore

State Bank of Mysore

State Bank of Saurashtra

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Dena Bank

Deutsche Bank

Development Credit Bank

Dhanalakshmi Bank

Federal Bank

HDFC Bank

HSBC ICICI Bank

IDBI Bank

Indian Bank

State Bank of Travancore

Syndicate Bank

Taib Bank

UCO Bank

Union Bank of India

United Bank of India

United Bank Of India

United Western Bank

UTI Bank

Vijaya Bank

Foreign Banks in India

Foreign banks have brought latest technology and latest banking practices in India.

They have helped in making Indian Banking system more competitive and efficient.

Government has come up with a road map for expansion of foreign banks in India

The road map has two phases. During the first phase between March 2005 and March

2009, foreign banks may establish a presence by way of setting up a Wholly Owned

Subsidiary (WOS) or conversion of existing branches into a WOS. The second phase

commenced in April 2009 after a review of the experience gained after due consultation

with all the stake holders in the banking sector. The review would examine issues

concerning extension of national treatment to WOS, dilution of stake and permitting

mergers/acquisitions of any private sector banks in India by a foreign bank.

Major foreign banks in India are:-

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ABN-AMRO Bank

Abu Dhabi Commercial Bank Ltd

American Express Bank Ltd

BNP Paribas

Citibank

DBS Bank Ltd

Deutsche Bank

HSBC Ltd

Standard Chartered Bank

RESERVE BANK OF INDIA

The Reserve Bank of India (RBI) is the central bank of India, and was established

on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act,

1934. The Central Office is located at Mumbai since RBI’s inception. Though originally

privately owned, since nationalization in 1949, RBI is fully owned by the Government of

India. RBI is governed by a central board (board headed by a governor) appointed by the

Central Government of India. The current governor of RBI is Dr. D. Subbarao; RBI has

22 regional offices across India.

Main Functions:-

Monetary Authority:- Formulates implements and monitors the monetary policy.

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Objective:- Maintaining price stability and ensuring adequate flow of

credit to productive sectors.

Regulator and supervisor of the financial system:- Prescribes broad parameters of

banking operations within which the country's banking and financial system functions.

Objective:- Maintain public confidence in the system, protect depositors' interest

and provide cost-effective banking services to the public.

Manager of Exchange Control:- Manages the foreign exchange under Foreign

Exchange Management Act, FEMA 1999.

Objective:- To facilitate external trade and payment and promote orderly

development and maintenance of foreign exchange market in India.

Issuer of currency:- Issues and exchanges or destroys currency and coins not fit

for circulation.

Objective:- To give the public adequate quantity of supplies of currency notes and

coins of good quality.

CHART SHOWING INDIAN BANKING SYSTEMCentral Bank & Monetary Authority “RBI” Apex Banking Institutions:-

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IDBI NABARD EXIM BANK

HB National Housing

Bank

BANKING INSTITUTIONS

APEX BANKING INSTITUTION

Commercial Banks Regional Rural Banks

Co-operation Bank

Public sector banks Private Sector Banks

State Co-operative Bank

Central Distt. Co-operative Bank

Primary Credit Societies State Banks Nationalized Banks

Subsidiary Companies

Indian Banks

ForeignBanks

State Bank of India Subsidiary banks

Old Bankss

New Banks Local Banks

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TYPES OF BANKS

ACCORDING TO OWNERSHIP

ACCORDING TO LAW

ACCORDING TO FUNCTION

PUBLIC SECTOR BANKS

PRIVATE SECTOR BANKS

CO-OPERATIVE BANKS

NON-SCHEDULED BANKS

COMMERCIAL BANK

INDUSTRIAL BANK

SAVING BANK

SCHEDULED BANKS

EXCHANGE BANK

AGRICULTURE BANK

CENTRAL BANK

Scheduled Banks in India (Public Sector):-

Scheduled Banks are those banks, which are included in the second schedule of the

Reserve Bank Act, 1934. In terms of Section 42(5) of the Reserve Bank of India Act, a

bank should fulfill the following conditions:-

It must have a paid up capital & reserve of an aggregate value of not less than Rs. 5 lacks.

It must satisfy RBI that its affairs are not conducted in a manner detrimental to the

depositors.

It must be a state co-operative bank of a company under companies Act, 1956 or an

institution notified by Central Government in this behalf or a corporation or a company

incorporated under law in force in a place in or outside India.

The scheduled banks enjoy certain privileges like approaching RBI for financial

assistance; refinance etc. and correspondingly, they have certain obligations like

maintaining certain cash reserves as prescribed by the RBI, submission of returns etc. The

scheduled commercials Banks in India comprises of state bank of India and its eight

association, the other nineteen nationalized foreign banks, private sector banks co-

operative banks and regional rural banks. As at the end of 30th June, 1999, there were 300

scheduled banks in India having a total networking of 64,918 branches among them. Non

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scheduled banks are those joint stock banks, which are not included in the

second schedule of RBI Act on account of the failure to comply with the minimum

requirements

for being scheduled. As on 30th Jun, 1997, there are only, 3 non scheduled commercial

banks operating in the country with a total of 9 branches:-

State Bank of India

State Bank of Bikaner and Jaipur

State Bank of Hyderabad

State Bank of Indore

State Bank of Mysore

State Bank of Patiala

State Bank of Saurashtra

State Bank of Travancore

Andhra Bank

Allahabad Bank

Bank of Baroda

Bank of India

Bank of Maharashtra

Canara Bank

Central Bank of India

Corporation Bank

Dena Bank

Indian Overseas Bank

Indian Bank

Oriental Bank of Commerce

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Punjab National Bank

Punjab and Sind Bank

Syndicate Bank

HISTORICAL BACK GROUND OF THE J&K BANK Ltd. Entire banking in the state of Jammu and Kashmir was performed by traditional lenders till 1920-30 and that too at exorbitant interest rates. At the same time some banks functioned on a very limited scale, such as Punjab National Bank Limited, Grind-lay’s Bank and Imperial Bank of  India. The role of these banks was reduced to the acceptance of deposits, as they could not grant loans and advances to the people of the state owing to the statutory limitations. Under this scenario  banks could not ameliorate the financial and social position of the people of the state. To overcome this critical situation the then Maharaja of the state conceived an idea of setting up of as t a t e   b a n k   i n   t h e   s t a t e .   A f t e r   a   p r o l o n g e d   e x e r c i s e   a n d  d e l i b e r a t i o n s   t h e   a s s i g n m e n t for establishment of “The Jammu and Kashmir Bank Limited” was given to the late Sir Sorabji N Pochkhanwala, the then Managing Director of the Central Bank of India. Mr. Pochkhawala formulated a scheme on 24-09-1930, suggesting establishment of a semi state Bank with participation in capital by state and the public under the control of state Government. Thus the bank was formally incorporated on the 1st of October 1938 and commenced business from 4th of July 1939 at its Registered Office, Residency Road, Srinagar, Kashmir. The Jammu & Kashmir Bank Limited has been the first of its nature and composition as a State owned bank in the country. The state Govt. besides contributing half of the issued capital also appointed it as its bankers for general banking and treasury business. In its formative years, the bank had to encounter several serious problems, particularly around the time of independence, when out of its total often branches two branches of Muzaffarabad and Mirpur fell on the other side of the line of control along with cash and other assets; in 1947. However the State Govt. came to its rescue with the assistance of Rs.6.00 Lacs to meet the claims thereafter, the bank  stead fastly overcame its difficulties and kept growing. Following the extension of Central laws to the

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state of Jammu & Kashmir, the bank was defined as a govt. company as per the provisions of Indian Companies Act 1956 .The bank had its firstfull time chairman in 1971, following social Central measures in banks .The year 1971 was a turning point for the bank on conferment of scheduled bank status and witnessed remarkable progress in a l l the v i ta l f ie lds of opera t ions .The bank was declared as "A" Class Bank by Reserve Bank of India in 1976. In recogni t ion of dominant ro le and exal ted per formance, Reserve bank of India appointed the bank as i t s agent for per forming the genera l banking  business of the Central Govt. especially in maintaining currency chests and collection of taxes.

INTRODUCTION ABOUT THE J&K BANK

The Jammu & Kashmir Bank is today one of the fastest growing banks in India with a

network of  more   than  603 branches/of f ices   spread  across   the  count ry  offer ing  world  c lass  banking  products/services to its customers. Today, the Bank

has a status of value driven organization and is always working towards building trust with Shareholders, Employees, Customers, Borrowers, Regula tors  and  other  d iverse  Stakeholders ,   for which   i t  has  adopted  a   s t ra tegy  di rec ted   to developing a sound foundation of relationship and trust aimed at achieving excellence, which of course, comes from the womb of good Corporate Governance. Good Governance is a  source of competitive advantage and a critical input for achieving excellence in all pursuits. J&K Bank considers good Corporate Governance as the  sine qua non of a good banking system and has adopted a policy based on all the four pillars of good governance – Transparency, Disclosures,Accountabi l i ty  and  Value ,  enabl ing   i t   to  prac t ice  Trusteeship ,  Transparency,  Fai rness  andControl ,   l eading   to  s takeholders  de l ight ,  enhanced  shareholder  va lue  and  e th ica l  corpora tecitizenship. It also ensures that bank is managed by an independent and highly qualified Board fo l lowing  best  g lobal ly  accepted  prac t ices ,   t ransparent d isc losures  and  empowerment  of   shareholders ,  bes ides  ensur ing   to   mee t   share-holders  aspi ra t ions  and  socie ta l  expecta t ions following

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the principles of management's executive freedom to drive the bank forward without undue restraints but within the framework of effective accountability.

VISION OF THE BANK 

The Bank's visionis:- “To catalyze economic transformation and capitalize on growth”.The bank aspires to make Jammu and Kashmir the most prosperous state in the country, by helping create a new financial architecture for the J&K economy, at the center of which will be the J&K Bank. The Bank is committed to achieve healthy growth in profitability and simultaneously to remain consistent with the Bank's risk appetite and at the same time ensuring the highest levels of ethical standards, professional integrity and regulatory compliance.

MISSION OF THE BANK 

The company’s mission is two-fold: To provide the people of J&K international quality financial service and solu t ions and to be a super-specia l i s t bank in the res t of the count ry . The two together will make it the most profitable bank in the country. 

FINANCIALS OF THE BANK 

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The Bank recorded an outstanding achievement in the last financial year (2011-12.) in key areas o f   i t s   o p e r a t i o n s .   D u r i n g   t h e   y e a r   2 0 1 1 -1 2 . ,   t h e   B a n k   t h e   b a n k   c o n t i n u e d   t o   r e g i s t e r   a n impressive improvement in earnings. During the year, the total income has increased by 22%to Rs. 86419 crores from Rs.70870 crores in the previous year. The Capital & Reserves of the Bank increased from Rs.44670 crores to Rs.53342 crores as on 31stMarch 2012. The Capital Adequacy Ratio stood at 17.66%, which is comfortably much above the minimum stipulated by Reserve Bank of India .The Bank posted a net profit of Rs.803.25 crores in the last fiscal as against the previous year  figure of Rs.615.20 crores in 2011-12, registering an impressive growth of 31%(YOY).Bank's

aggregate deposits recorded an appreciable accretion of 19% to Rs.53342 crores at the end of financial year 2011-12. The credit portfolio of the Bank also recorded an appreciable growth during the year. The total advances of the Bank increased to Rs.33077 crores aga ins t the cor responding per iod of the  previous year registering a growth of 26%.The net NPA’s stood at 0.15%, as on the end of financial year 2011-12.During the year, the Foreign Exchange business recorded an impressive growth of 31%, moving to Rs.22573.58 crores. The contribution of this segment to the Bank's gross income has been to the tune of Rs.138.56 crores. Keeping in view overall performance of the Bank, the Bank, after the approval of shareholders, paid 335% dividend (free of tax) for the year ended 31st March 2012

INSURANCE BUSINESS

The Bank has diversified its business activities into insurance, both life and non-life. The Bank not only became the strategic partner of, M/S METLIFE INDIA INSURANCE CO. Ltd but also has been acting as corporate agent of the said company for distribution of their life insurance produc ts through ne twork of i t s branches . The Bank a lso entered in to a t ie -up wi th BAJAJ ALLIANZ GENERAL INSURANCE COMPANY for distribution of their non-life insurance products. In view of Bank's deep branch network and loyal customer base particularly in Jammu and Kashmir, the Bank has been able to distribute insurance products in deep rural and far flung areas and has made penetration in the new areas thereby adding to its non-interest and fee based income. The bank’s insurance business

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continued to record splendid growth. During the year under report the bank as a corporate agent further extended the marketing of products of M/S METLIFEINDIA INSURANCE CO. Ltd into new areas, which were hitherto neglected by the traditional competitors in the business. Bank has sold 9019 life policies of METLIFE INDIA and collected annualized premium amount of Rs. 1277.84 lacs during the year. In the non-life business, the bank has shown a better performance and collected aggregate premium amount of Rs. 1759.03 lacs. This has yielded non-interest income of Rs.509.21 lacs to the bank 

RECOGNITION AND AWARDS

The Bank recent ly won the pres t ig ious Asian Banking Award – 2005 for i t s ‘Deve lopment Project Financing Program', contributing significantly to the development of tourism industry of the J&K Sta te . The award was presented by the Under Secre tary Finance , Phi l ippines , a t a glittering Gala Dinner award function held at Manila, Philippines on June 17, 2005.The annual Asian banking awards recognize and honor Asian banks for outstanding, innovative and world-class products and programs implemented during the previous year. It is the most respected and premier banking awards program in Asia Pacific region. It is worth mentioning that the Bank has won the Asian Banking Award consecutively for the second year. Last year, the Bank won the award for Customer Convenience Programs and was also given runners up certificate for its project ‘Motivating Employees for Better Performance under ‘operational efficiency program' category. The Bank was ranked fifth among the top ten Asian banks and 762nd among top 1000 World banks. A renowned business journal "Business Today” ranked JK Bank among 25 top investor friendly companies in India, the only bank in the whole Indian Banking industry, which has been ranked in the magazine among first 10 Investor Friendly Companies. The Bank for the second consecutive year was ranked Best Private Sector Bank in Financial Express/Ernest and Young combined Survey for the year 2002-03 released recently. Bank was awarded ‘Shiromani Award' for outstanding achievements in the field of banking and commitment to national progress and human welfare during the year under report. The Bank has figured among 24 Indian companies in Forbes Global - 100 best ‘under a billion Asia's Rising Companies', listed by Forbes magazine i n   i t s   i s s u e   d a t e d   N o v e m b e r

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0 1 , 2 0 0 6 .   T h e   p u b l i c a t i o n   h a s   c o m m e n d e d J & K   B a n k   f o r   representing economic dynamism' in the region, sustained growth in all spheres and an excellent track record of rewarding its shareholders.

SERVICES PROVIDED BY THE JAMMU AND KASHMIR BANK TOCUSTOMERS UNDER VARIOUS SCHEMES:-

1) The J&K Bank Savings Accounts

2) The J&K Bank Current Accounts

3) The J&K Bank Fixed Deposits

4) The J&K Bank’s various Loans Schemes

5) The J&K Bank various Depository Schemes

NEW PRODUCTS OF J&K BANK:-

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For the benefit of the people of J & K State, the bank has developed some special schemes for some special category. These schemes are as under:- 

1) APPLE ADVANCE SCHEME.

2) J & K BANK DASTAKAR FINANCE.

3) J & K BANK ALL TERM AGRI TERM LOANS.

4) J & K BANK KHATAMBAND FINANCE.

5) J & K BANK ZAFRAN FINANCE.

6) J & K BANK RATION CARD. 

APPLE ADVANCE SCHEME:-J&K Bank’s specially designed product named as apple advance scheme has struck at the root of the explorative system that thrived on scant or untimely fund availability at time seven lack of finance through formal channels. Last year after a detailed study of the apple economy, need based, time specific product was introduced. The product incorporated all the critical necessary to make our financial intervention effective and grow friendly. Apple advance scheme was introduced to meet the comprehensive requirements of the apple growers with distinctive features like reduced margins, higher scale of finance that includes production and post harvest maintenance, auto renewal of limits and most importantly very easy and hassle free documentation. The scale of finance was increased to Rs. 1.5 lacks per acre from Rs. 40000 per acre. The  objec t ives tha t  guided   the  customiza t ion  of   the  produc t   inc lude   the  easy  access , simplified documentation, avoiding redundancies, shortened process time and flexible fund limit. Even for the growers who have just leased orchards can avail finance under the scheme. With hypothecation of fruit crop and third party guarantee of two persons as

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security and no emphas is on col la tera ls , the borrower i s a l so a l lowed drawls up to 50 % of the  previous year limit till the bank renews the sanction foe the next year. The process has been made extremely easy and hassle free to ensure that comprehensive requirements of apple growers to take care of production and marketing costs are fulfilled adequately and in time. Simplified legal documentation has been made to expedite the loan processing.

J&K BANK DASTAKAR FINANCE:-

J & K Bank in its Endeavour to promote trade, industry and to preserve the tradition arts and crafts of the state devised a scheme aimed at the financial needs of the artisan community aptly called J & K Bank dastakar finance. The scheme provides easy and soft credit to the crafts men engaged in the trade, and helpst h e m   t o   s e t   u p   t h e i r   o w n   v e n t u r e s ,   w e e d i n g   o u t   t h e   m i d d l e  m e n   r e s p o n s i b l e   f o r   t h e i r   exploitation. Keeping in view the specific production cycle associated with this trade loan comprises of term loan and working capital components. The disbursement is phased in quar te r ly ins ta l lments and a l igned to the s ta tus of work in progress [WIP] .This ensures  proper end use, quality control and timely completion of work. The weavers ascertain are allowed a reasonable time for the repayment of the bank finance. To make the credit hassle free no third party \collateral guarantee is required. The product has been designed on the banks phi losophy of conf idence-based lending as opposed to collateral based lending. There are no requirements of any collateral security under this  product. The legal documentation has been kept at bare minimum with only two documents to be executed for disbursement of the loan. In order to increase the reach of the product the data base of the weaver’s artisans available with the various trade associations is being utilized besides identification of the people by concerned of the bank.

J&K BANK ALL PURPOSE AGRI TERM LOAN:-

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The product aptly named as All-Purpose Agro Term Loan has been designed in a way that lays special emphasis on small and marginal farmers and provides sufficient and more importantly timely finance to the farmers engaged in all types of agriculture and allied activities. The product aims to cater to the needs of the small farmers within very little landholdings in the rural and semi urban areas of the J&K State. The objective has been to provide easy finance to needy farmers through regular channels of f inance and to wean them away from the exploitat ive circle created by the non banking intermediaries. For that purpose, the product has been

devised in such a way that hitherto un- banked customers get an easy access to banking services through simple and affordable documentation process. A maximum credit of 1 lakh rupees, depending upon the agri -activity to be financed is provided but multiple activities can also be considered for finance. The product is offered at affordable interest rates. This product is available for farmers of cereal crops and vegetables, orchids. I t is also available for unemployed rural youth for setting up of small dairy, poultry units, in purchase of seeds, pesticides, fertilizers, plough and farm machines. This seems just the beginning, as the fruits of this harvest are expected to yield much. The strengths of being a community  bank with a monopolistic presence are being exploited more effectively so that the product reaches all the small growers of the state. And with every loan granted, we are having more and more happy faces. 

J&K BANK KHATAMBAND FINANCE:-

Khatamband craft is a specialized scheme that provides employment to few thousand people living in the J & K State .a specialized scheme was customized to the people according to the needs of the Khatamband craftsmen. The product was tailored to provide comprehensive and timely credit to them, based on paper understanding of the production cycle and need for

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finance at its different stages. The finance is provided as

a revolving facility, eligible for enhancement every year  on the basis  on   the   turn-over .  The  produc t has  been   in tent ional ly   ta rge ted  a t  c raf t s  men aged  between 18-55 years, no collateral security is asked for and the documentation process has  been kept simple. The prospective borrowers have to only submit their identity proofs to avail the facility. The response to the khatamband finance so far, has been Impressive. It has again generated hope among the traditional khatamband crafts of the JK State, especially to the small ones. Access to affordable finance is no longer a problem or them. Kindling such hope is  the first step towards the revival of all such culturally rich arts and crafts in the state. 

J&K BANK TRUMP CARD:-

Deepening of financial intermediation is a pre-requisite for sustained economic growth. The bank have given a new meaning to inclusive growth by working on empowering people and demonstrating that people with lesser means can be reached and reached profitably. For  the bank, making  a  d i f ference in people’s l ives and  making prof i t s cannot be  mutual ly exclusive. The bank is therefore combining the sensibility of social enterprises with the form of a far- profit business. A very novel in i t ia t ive was s tar ted in th is respect , which proved to be qui te useful in reaching out to almost every house hold of J & K State. The initiative was to print the ration books for the Govt. The state Govt. annually prints and distributes twenty lakhs. Ration books to customer families to facilitate them purchase of rations from Govt. owned fair prices. Practically every family in the state gets a ration book including more than eight lakh BPL families. These ration books reached places where even roads don’t go. There ration cards can be used as an ideal delivery vehicle to reach out to the unbanked people and to carry out the empowerment initiative through an assured and established distribution network system active across J&K State. The ration books also contained personal information coupons which helped the bank create a data base of around twenty lakh people .The data would be used for strategizing the banks other initiatives aimed at economic empowerment. The bank spent quite a sum on printing these ration books, which was otherwise to be spent by the J & K State government. But the smiles on the faces of our people were a return that was match less . Appl ica t ions

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forms provided wi th in the ra t ion book, they went to the i r  nearest branches to put their hard earned money to better use instead of keeping the cash at home. 

JK BANK ZAFRAN FINANCE:-

With a view of preserving this prized spice, JK Bank tailored a specific product named JK Bank Zafran Finance .Its purpose is to provide adequate ,timely and need based finance to Saffron growers. The scheme is for all saffron growers, especially the smaller and Marginal ones including even the contract farmers engaging in or intending to start its cultivation. The quantum of  finance is to

proportionate to the land holding of a grower. The product also provides an additional finance for post harvest and packaging. The disbursement is done in two phases; 60% in the first year and 40 % in the second, when the growers are in need of funds. Their payment  of   the advance   i s   scheduled  wi th in   the four  year  growing  cycle  of   saf f ron. Refinancing facility can be availed on fresh plantation of the crop. The documentation has  been simplified and kept minimum to make it hassle free. Saff ron   f inance has  made   the middle  men and  other   informal  channels  of   f inance  and attractive for the saffron growers. Besides it has encouraged the small growers to with stand the price fluctuations because now they are not forced to sell their produced and they can wait till they are satisfied with the rates .With the much needed direct finance leading to the prosperity of some, others have already made up their mind to follow. Hence the product is in demand across the saffron belts of the valley.

OTHER FACILITIES AT THE J&K BANK Ltd:-1) Automatic Teller Machines.

2) Locker Facility.

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3) Mobile ATM Service.

4) The J&K Bank Credit Cards.

5) The J&K Bank Global Access Debit Cards.

6) SMS Banking

7) Anywhere banking facility

8) The J&K bank is the only bank in India which provides Amaranth Yatra Tickets to pilgrims

BANKS NEW IDENTITY

T h e   n e w   i d e n t i t y   f o r   J & K   B a n k   i s   a   v i s u a l   r e p r e s e n t a t i o n  o f   t h e   B a n k ’ s   p h i l o s o p h y and business strategy. The three coloured squares represent the regions of Jammu, Kashmir and Ladakh. The counter-form created by the interaction of the squares is a falcon with outstretched wings – a symbol of power and empowerment. The synergy between the three regions propels the bank towards new horizons. Green signifies growth and renewal, blue conveys stability and unity, and red represents energy and power. All these attributes are integrated and assimilated in the white counter form.

 

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SERVICE MARKETINGService marketing is a sub field of marketing, which can be split into the two main areas

of goods marketing (which includes the marketing of fast moving consumer goods (FMCG) and durables) and services marketing. Service marketing typically refers to both

business to consumer (B2C) and business to business (B2B) services, and includes marketing of services like telecommunications services, financial services, all types of hospitality services, car rental services, air travel, health care services and professional

services. The range of approaches and expressions of a marketing idea developed with the hope that it be effective in conveying the ideas to the diverse population of people who

receive it.

SERVICE MARKETING MIX

The service marketing mix is also known as an extended marketing mix and is an integral part of a service blueprint design. The service marketing mix consists of 7 P’s as

compared to the 4 P’s of a product marketing mix. Simply said, the service marketing mix assumes the service as a product itself. However it adds 3 more P’s which are required for

optimum service delivery.

The product marketing mix consists of the 4 P’s which are Product, Pricing, Promotions and Placement. These are discussed in my article on product marketing mix – the 4 P’s.

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The extended service marketing mix places 3 further P’s which include People, Process and Physical evidence. All of these factors are necessary for optimum service delivery. Let us discuss the same in further detail.

Product – The product in service marketing mix is intangible in nature. Like physical products such as a soap or a detergent, service products cannot be measured. Tourism industry or the education industry can be an excellent example. At the same time service products are hetereogenous, perishable and cannot be owned. The service product thus has to be designed with care. Generally service blue printing is done to define the service product. For example – a restaurant blue print will be prepared before establishing a

restaurant business. This service blue print defines exactly how the product (in this case the restaurant) is going to be.

Place - Place in case of services determine where is the service product going to be located. The best place to open up a petrol pump is on the highway or in the city. A place where there is minimum traffic is a wrong location to start a petrol pump. Similarly a software company will be better placed in a business hub with a lot of companies nearby rather than being placed in a town or rural area.

Promotion – Promotions have become a critical factor in the service marketing mix. Services are easy to be duplicated and hence it is generally the brand which sets a service apart from its counterpart. You will find a lot of banks and telecom companies promoting themselves rigorously. Why is that? It is because competition in this service sector is generally high and promotions is necessary to survive. Thus banks, IT companies, and dotcoms place themselves above the rest by advertising or promotions.

Pricing – Pricing in case of services is rather more difficult than in case of products. If you were a restaurant owner, you can price people only for the food you are serving. But then who will pay for the nice ambience you have built up for your customers? Who will pay for the band you have for music? Thus these elements have to be taken into consideration while costing. Generally service pricing involves taking into consideration labor, material cost and overhead costs. By adding a profit mark up you get your final service pricing. You can also read about pricing strategies.

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Here on we start towards the extended service marketing mix.

People – People is one of the elements of service marketing mix. People define a service. If you have an IT company, your software engineers define you. If you have a restaurant, your chef and service staff defines you. If you are into banking, employees in your branch and their behavior towards customers defines you. In case of service marketing, people can make or break an organization. Thus many companies nowadays are involved into specially getting their staff trained in interpersonal skills and customer service with a focus towards customer satisfaction. In fact many companies have to undergo accreditation to show that their staff is better than the rest. Definitely a USP in case of services.

Process – Service process is the way in which a service is delivered to the end customer. Let’s take the example of two very good companies – Mcdonalds and Fedex. Both the

companies thrive on their quick service and the reason they can do that is their confidence on their processes. On top of it, the demand of these services is such that they have to deliver optimally without a loss in quality. Thus the process of a service company in delivering its product is of utmost importance. It is also a critical component in the service blueprint, wherein before establishing the service, the company defines exactly what should be the process of the service product reaching the end customer.

Physical Evidence – The last element in the service marketing mix is a very important element. As said before, services are intangible in nature. However, to create a better customer experience tangible elements are also delivered with the service. Take an example of a restaurant which has only chairs and tables and good food, or a restaurant which has ambient lighting, nice music along with good seating arrangement and this also serves good food. Which one will you prefer? The one with the nice ambience. That’s physical evidence. Several times, physical evidence is used as a differentiator in service marketing. Imagine a private hospital and a government hospital. A private hospital will have plush offices and well dressed staff. Same cannot be said for a government hospital. Thus physical evidence acts as a differentiator.

This is the service marketing mix (7p) which is also known as the extended marketing mix.

SERVICES

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'Services are those separately identifiable, essentially intangible activities which provide want satisfaction,and that are not necessarily tied to the sale of a product or another service. To producea service may or may not require the use of tangible goods. However when such use is required,there is no transfer of title (permanent ownership) to these tangible goods.'In using this definition Stanton makes clear that activities like medical care, entertainment and repairservices are included but credit, delivery and other services which exist only when there is the sale of

a product or another service are excluded. He also recognizes that the consumer may take temporarypossession or make temporary use of any goods that may be required in the production of a service.

Intangible products such as accounting, banking, cleaning, consultancy, education, insurance, expertise, medical treatment, or transportation.

Sometimes services are difficult to identify because they are closely associated with a good; such as the combination of a diagnosis with the administration of a medicine.

No transfer of possession or ownership takes place when services are sold, and they:-

(1) cannot be stored or transported,

(2) are instantly perishable, and

(3) come into existence at the time they are bought and consumed. 

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POINT OF SALE – INTRODUCTION ABOUT THE TOPIC

Point of sale (POS) (also sometimes referred to as Point of purchase (POP) ) or checkout is the location where a transaction occurs. A "checkout" refers to a POS terminal or more generally to the hardware and software used for checkouts, the equivalent of an electronic cash register.

A POS terminal manages the selling process by a salesperson accessible interface. The same system allows the creation and printing of the receipt.

A point-of-sale display (POS) is a specialized form of sales promotion that is found near, on, or next to a checkout counter (the "point of sale"). They are intended to draw the

customers' attention to products, which may be new products, or on special offer, and are also used to promote special events, e.g. seasonal or holiday-time sales. POS displays can

include shelf edging, dummy packs, display packs, display stands, mobiles, posters, and banners. POS can also refer to systems used to record transactions between the

customer and the commerce.

Examples

Usually, in smaller retail outlets, POS displays are supplied by the manufacturer of the products, and also sited, restocked and maintained by one of their regular salespersons. However, this is less common in large supermarkets as they can control the activities of their suppliers due to their large purchasing power, and prefer to use their own material

designed to be consistent with their corporate theming and store layout.Common items that may appear in POS displays year-round are batteries, soft

drinks, candy, chewing gum, magazines, comics, tobacco, and writable CDs and DVDs. These displays are also useful in outlets with limited floor space, as there tends to be much

wasted space around counters.The displays are normally covered with branding for the product they are trying to sell,

and are made out of cardboard or foam board, and/or a covering over a plastic

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or Perspex/Plexiglass stand, all intended to be easily replaceable and disposable. This allows designers to make full use of color and printing to make the

display visually appealing. Some displays are fixed or non-disposable; these may include lighting to make the display more visible and may also contain a cooler, e.g. for drinks or ice cream. Some are no more than a metal basket, with no design on the outside, simply

showing a price; these types of display are easier to refill.

LIGHT BOXES

A light box is an accepted term in the advertising industry for an illuminated point-of-sale display. Generally, a light box uses fluorescent tubes to illuminate a poster inserted into

the light box from either the side or rear, in a similar manner to a photographer's light box.

HISTORY

Software prior to the 1990s

Early Electronic Cash Registers (ECR) were controlled with proprietary software and were very limited in function and communications capability. In August 1973 IBM

announced the IBM 3650 and 3660 Store Systems that were, in essence, a mainframe computer used as a store controller that could control 128 IBM 3653/3663 point of sale registers. This system was the first commercial use of client-server technology, peer-to-

peer communications, local area network (LAN) simultaneous backup, and remote initialization. By mid-1974, it was installed in Pathmark Stores in New Jersey

and Dillard's Department Stores.One of the first microprocessor-controlled cash register systems was built by William Brobeck and Associates in 1974, for McDonald's Restaurants. It used the Intel 8008, a

very early microprocessor. Each station in the restaurant had its own device which displayed the entire order for a customer—for example: [2] Vanilla Shake, [1] Large

Fries, [3] Big Mac—using numeric keys and a button for every menu item. By pressing

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the [Grill] button, a second or third order could be worked on while the first transaction was in progress. When the customer was ready to pay, the [Total] button would calculate the bill, including sales tax for almost any jurisdiction in the United States. This made it accurate for McDonald's and very convenient for the servers and provided the restaurant

owner with a check on the amount that should be in the cash drawers. Up to eight devices were connected to one of two interconnected computers so that printed reports, prices, and

taxes could be handled from any desired device by putting it into Manager Mode. In addition to the error-correcting memory, accuracy was enhanced by having three copies of all important data with many numbers stored only as multiples of 3. Should one computer

fail, the other could handle the entire store.In 1985, Gene Mosher introduced a POS built on the Atari Mega ST, with a

color touchscreen interface that allowed configuration of menu items without programming.

Modern software (post 1990s)

In 1992 Martin Goodwin and Bob Henry created the first point of sale software that could run on the Microsoft Windows platform named IT Retail. Since then a wide range of POS

applications have been developed on platforms such as Windows and Unix. The availability of local processing power, local data storage, networking, and graphical user interface made it possible to develop flexible and highly functional POS systems. Cost of such systems has also declined, as all the components can now be purchased off-the-shelf.

The key requirements that must be met by modern POS systems include: high and consistent operating speed, reliability, ease of use, remote supportability, low cost, and rich functionality. Retailers can reasonably expect to acquire such systems (including

hardware) for about $4000 US (2009) per checkout lane.

Hardware interface standardization (post 1990s)

Vendors and retailers are working to standardize development of computerized POS systems and simplify interconnecting POS devices. Two such initiatives

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are OPOS and JavaPOS, both of which conform to the Unified POS standard led by The National Retail Foundation.

OPOS (OLE for POS) was the first commonly-adopted standard and was created by Microsoft, NCR Corporation, Epson and Fujitsu-ICL. OPOS is a COM-based interface

compatible with all COM-enabled programming languages for Microsoft Windows. OPOS was first released in 1996. JavaPOS was developed by Sun Microsystems, IBM,

and NCR Corporation in 1997 and first released in 1999. JavaPOS is for Java what OPOS is for Windows, and thus largely platform independent.

There are several communication protocols POS systems use to control peripherals. Among them are:-

EPSON Esc/POS UTC Standard UTC Enhanced AEDEX ICD 2002 Ultimate CD 5220 DSP-800 ADM 787/788 HP.

There are also nearly as many proprietary protocols as there are companies making POS peripherals. EMAX, used by EMAX International, was a combination of AEDEX and

IBM dumb terminal.Most POS peripherals, such as displays and printers, support several of these command protocols in order to work with many different brands of POS terminals and computers.

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INDUSTRY

Retail industry

The retailing industry is one of the predominant users of POS terminals.A Retail Point of Sales system typically includes a computer, monitor, cash drawer, receipt printer, customer display and a barcode scanner, and the majority of retail POS systems also include a debit/credit card reader. It can also include a weight scale, integrated credit card processing system, a signature capture device and a customer pin pad device. More and more POS monitors use touch-screen technology for ease of use and a computer is built in to the monitor chassis for what is referred to as an all-in-one unit. All-in-one POS units liberate counter space for the retailer. The POS system software can typically handle a myriad of customer based functions such as sales, returns, exchanges, layaways, gift cards, gift registries, customer loyalty programs, BOGOF (buy one get one free), quantity discounts and much more. POS software can also allow for functions such as pre-planned promotional sales, manufacturer coupon validation, foreign currency handling and multiple payment types.

The POS unit handles the sales to the consumer but it is only one part of the entire POS system used in a retail business. “Back-office” computers typically handle other functions

of the POS system such as inventory control, purchasing, receiving and transferring of products to and from other locations. Other typical functions of a POS system are to store

sales information for reporting purposes, sales trends and cost/price/profit analysis. Customer information may be stored for receivables management, marketing purposes and

specific buying analysis. Many retail POS systems include an accounting interface that “feeds” sales and cost of goods information to independent accounting applications

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.

Hospitality industry

Hospitality point of sales systems are computerized systems incorporating registers, computers and peripheral equipment, usually on a computer network. Like other point of sale systems, these systems keep track of sales, labor and payroll, and can generate

records used in accounting and book keeping. They may be accessed remotely by restaurant corporate offices, troubleshooters and other authorized parties.Point of sales systems have revolutionized the restaurant industry, particularly in the fast

food sector. In the most recent technologies, registers are computers, sometimes with touch screens. The registers connect to a server, often referred to as a "store controller" or a "central control unit." Printers and monitors are also found on the network. Additionally,

remote servers can connect to store networks and monitor sales and other store data.Newer, more sophisticated, systems are getting away from the central database "file

server" type system and going to what is called a "cluster database". This eliminates any crashing or system downtime that can be associated with the back office file server. This technology allows 100% of the information to not only be stored, but also pulled from the

local terminal. Thus eliminating the need to rely on a separate server for the system to operate.

The efficiency of such systems has decreased service times and increased efficiency of orders.

Another innovation in technology for the restaurant industry is Wireless POS. Many restaurants with high volume use wireless handheld POS to collect orders which are sent

to a server. The server sends required information to the kitchen in real time.

Hair and beauty industry

Point of sale systems in the hair and beauty industry have become very popular with increased use of computers. In order to run a salon efficiently it is essential to keep all appointments, client, employee roster and the checkout in a system where you can create performance reports for. The nature of salons and spas vary depending on the setup of the business and products offered in addition to the business. This is why POS comes along with most salon software.

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Restaurant business

Restaurant POS refers to point of sale (POS) software that runs on computers, usually touch screen terminals or wireless handheld devices. Restaurant POS systems assist

businesses to track transactions in real time.

Typical restaurant POS software is able to print guest checks, print orders to kitchens and bars for preparation, process credit cards and other payment cards, and run reports. In addition, some systems implement wireless pagers and electronic signature capture

devices. In the fast food industry, registers may be at the front counter, or configured for drive through or walk through cashiering and order taking. Front counter registers take and serve orders at the same terminal, while drive through registers allow orders to be taken at one or more drive through windows, to be cashiered and served at another. In

addition to registers, drive through and kitchen monitors may be used by store personnel to view orders. Once orders appear they may be deleted or recalled by "bump bars", small

boxes which have different buttons for different uses. Drive through systems are often enhanced by the use of drive through wireless (or headset) systems which enable

communications with drive through speakers.POS systems are often designed for a variety of clients, and can be programmed by the

end users to suit their needs. Some large clients write their own specifications for vendors to implement. In some cases, POS systems are sold and supported by third party

distributors, while in other cases they are sold and supported directly by the vendor.Wireless systems consist of drive though microphones and speakers (often one speaker will serve both purposes), which are wired to a "base station" or "center module." This

will, in turn broadcast to headsets. Headsets may be an all-in-one headset or one connected to a belt pack.

Hotel business

POS software allows for transfer of meal charges from dining room to guest room with a button or two. It may also need to be integrated with property management software.

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Hardware Stores, Building Supply, Lumber Yards

POS software for this industry is very specialized compared to other industries. POS software must be able to handle special orders, Purchase Orders, Repair orders, Service

and Rental Programs as well as typical Point of Sale Functions.

Special equipment is usually needed because of the environment that the Point of Sale System is exposed to. Wireless Devices, Battery Powered Devices, all in one units, and

Internet ready machines are typical in this industry.

CHECKOUT SYSTEM

A checkout system generally involves the following components:

General computer hardware General computer software Checkout hardware Checkout software Miscellaneous store hardware

Because of the expense involved with a POS system, the eBay guide recommends that if annual revenue exceeds the threshold of $700,000, investment in a POS system will be

advantageous.POS systems are manufactured and serviced by such firms as Fujitsu, IBM, MICROS

Systems, Panasonic, Radiant Systems, and Squirrel Systems(see the point of sale companies category for complete list).

Point of sales systems in restaurant environments operate on DOS, Windows or Unix environments. They can use a variety of physical layer protocols, though Ethernet is

currently the preferred system.

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Checkout hardware generally includes a credit card reader, a receipt printer, a cash drawer, a barcode scanner, and a PIN pad with integrated card swipe.

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