Banks offer many services. Generally speaking, they accept money from the general public and lend this money to customers who need it. They charge a high interest for the loans they giant but give a small interest for the money they borrow. The banks accept deposits either on a current or a deposit account.
On this account you can draw cheques whenever you want to but the bank pays no interest. A small interest is given on a deposit account but money can only be withdrawn if a seven days notice is given.
1. Several types of banks
a) Central banks
These are the only banks allowed to issue banknotes - they include the Banks of England and France. A central bank is the government's banker: when short of money the government may borrow from the bank. This bank also regulates the amount of credit available in the country ; it does this by the Bank Rate which is the rate of interest the Central Bank will apply to depositors and borrowers. This bank regulates the flow of capital into and out of the country.
b) Commercial banks
These provide all the usual services offered by banks to individuals.
c) Savings banks
They receive savings accounts and pay interest to the depositors. Usually the rate of interest varies in relation to the length of the notice of withdr These banks may also be refered to as the "High Street Banks".
The major ones in Britain are:
- The Midland
- The Barclays
- The National Westminster
- The Lloyds
d) The Giro
This bank operates along the same lines as our Postal Cheques, but now offers some very competitive services.
e) Building Societies
These societies obtain funds from private investors by issuing shares and taking deposits. They lend money for house purchases. The loan is secured by a mortgage. "The Halifax" and "The woolwich" are the major ones.
2. Different services
Banks provide many services. These include current accounts, and deposit accounts, loans, overdrafts and discounting of bills of exchange. They also issue traveller's cheques and foreign currency and assure regular payments to clubs, bills, insurance premiums and other recurring expenses, when they become due. Safes are also provided for the custody of deeds and valuables.
This is the amount which the banker allows a customer when he hasn't sufficient money left in his account. The bank usually charges a high rate of interest for this service.
This is a written order to a bank, given and signed by someone who has money deposited there to pay a certain amount mentioned on the cheque to a person or a firm named on it.
There are two kinds of cheques the order cheque and the bearer cheque. An order cheque is made out to a certain person or order. In order to cash the cheque it is necessary to endorse it, that is, sign your name on the back. You can also use this cheque to pay a debt to someone, also by endorsing it in this way.
Pay Alan Young or order and then sign underneath. If you cross out the word order and put bearer ins tead the cheque doesn't need to be endorsed.
It is advisable to cross a cheque, that is, to draw two parallel lines across the cheque thus obliging it to be collected only through a bank. This is obviously a protection against theft and loss.
A bill of exchange
This is similar to a cheque hut differs in the date of payment. A cheque is always payable on demand whereas a bill of exchange can be made payable either on demand or at a fixed date in the future.
A promissory note
This is a promise signed by the debtor to pay a certain amount of money at a certain date. It is a formal document which may be produced as evidence of a debt.
I.O.U (I owe you)
This is also a written acknowledgement of a debt but unlike a promissory note has no real legal value.
A personal loan differs from an ovex4raft in two important respects. Firstly no security is asked for and secondly a fixed repayment scheme is laid down at the beginning so that the borrower knows exactly how much the loan will cost him each month. Personal loans are offered in preference to over drafts when large sums are involved.
Overdrafts are sometimes given to those customers who can offer the bank some security in exchange. A security can be stock or share certificates, life assurance policies or property deeds. A good reputa tion also helps, a bank often prefers a customer who asks outright for an overdraft to someone who runs into the red without noticing this will eventually lead to the ultimate sanction - the bounced cheque!
3. Vocabulary and useful expressions
- To discount a bill: escompter une traite
- To endorse: endosser
- G.I.R.O : service des chèques postaux
- To grant a loan: accorder on prêt
- To grant an overdraft: accorder un découvert
- I.O.U: une reconnaissance de dette
- To issue: émettre
- To overdraw: tirer à découvert
- Savings bank: caisse d'épargne
- Postal savings bank: caisse d'épargne postale
- To withdraw money: retirer de l'argent
- Current account: un compte courant
- Deposit account: un compte de dépôt à vue
- Crossed cheque: un chèque barré
- Promissory note: billet à ordre
- Rate of exchange: taux de change
- Mortgage: hypothèque
- Deed: acte, document
- A bearer cheque: un chèque au porteur
- A bill of exchange: une lettre de change, une traite
- Bounced cheque: un chèque sans provision
- A branch: une succursale
-A safe: un coffre
- Safe deposit: un dépôt en coffre fort
- Safe hire: la location de coffre
- To make out a cheque/ To issue a cheque: émettre un chèque
- A withdrawal: un retrait
- Drawer: le tireur
- A standing order: un ordre de prélèvement
- A statement of account: un relevé de compte
- Foreign exchange: devices étrangères
- Bankrate: taux de l'escompte
- Transfert: virement
- Withdrawal: retrait
- Bank charges: frais d'agios