BANKS IN THE UK

6. 12. 2011

TYPES OF BANKS
merchant
similar services as commercial banks, but specialize in international trade, finances and foreign exchange markets

commercial/clearing
specialize in private customers, better availability, lower charges, telephone & online banking

private
similar to commercial banks, but more expensive

building societies
compete with commercial banks in some areas such as loans, mortgages and acting like trustees and executors

COMMERCIAL BANK FACILITIES

current accounts deposit accounts credit and debit cards standing orders and direct debits loans and overdrafts administrative correspondence

COMMERCIAL BANK FACILITIES current accounts

ID/passport/driving license required payment by cheque cheque card
extra security cash card

deposits with pay in slips overdrafts

large overdraft requires managers agreement

COMMERCIAL BANK FACILITIES deposit accounts

several types
instant access notice account

COMMERCIAL BANK FACILITIES credit and debit accounts

provide credit facilities useable in shops, mail orders and on the Internet debit cards use EFTPOS
Electronic Funds Transfer from Point of Sale enables shops to transfer funds directly to their account by swiping the card

caused decline in the use of cheques

COMMERCIAL BANK FACILITIES standing orders and direct debits

automated regular payments standing order
amount is specified by the payer in advance

direct debit
amount is specified by the payee, ie. bank charges whatever amount is asked

COMMERCIAL BANK FACILITIES loans and overdrafts

large amounts require formal agreement usually covered by negotiable securities interest controlled by market forces amount is immediately deposited only up to certain limit

EXAMPLES

EXAMPLES Opening a current account

Dear Mr Day I would appreciate it if you could open a current account for me under my trading name R&S Fashions Ltd. Enclosed you will find two specimen signatures, my own and that of my partner Ms Catherine Sidden. Both signatures will be required on all cheques. I also enclose a reference from Mr Stephen Young, who banks with your branch, and a cheque for $357.00 with a paying-in slip.

Yours sincerely Anne Roberts (Mrs)

EXAMPLES Change of signature

Dear Mr Winston Please note that as from 11 August 20- the two signatures that will appear on cheques for our Number 1 and 2 accounts will be mine and that of our new accountant, Mr Henry Lloyd, who is taking over from Ms Dianne Knibbs. I enclose a specimen of Mr Lloyd's signature and look forward to your acknowledgement. Yours sincerely Frank Wearing

EXAMPLES Request for a standing order

Dear Sir / Madam Account No. 33152 110 9501 We have just moved to new premises at the above address and would like to pay our monthly rent of $1,574.00 our landlords, Richards & Long, 30 Blare Street, London SW7 1LN, by standing order. Would you please arrange for $1,574.00 to be transferred from our No. 2 Account to their account with Dewlands Bank, Leadenhall Street, London EC2, on the 1st of every month, beginning 1 May this year?

Please would you confirm that the arrangement has been made.
Yours faithfully G.K. Archer (Mr)

EXAMPLES Cancellation of a cheque

Dear Mr Mathers Please cancel cheque No. 17892165001 for $1,672 in favour of B. Gelt Ltd. The cheque appears to have been lost in the post and I am sending another in its place.

B. Steward Accountant

EXAMPLES Advice of an overdraft account

Dear Mr Hughes Account No. 0566853 01362 I am writing to inform you that you now have an overdraft of $1,358.63 on your current account. We passed your last credit transfer to Homemakers Ltd. as you have a substantial credit balance on your deposit account. If you require overdraft facilities on your current account, I suggest that you contact me and we can discuss a formal arrangement.

Yours sincerely David Collis Manager

EXAMPLES Reply to an advice

Dear Mr Collis Thank you for your letter of 8 August. I apologize for not being aware that I had a debit balance on my current account. I have now checked into this and discover that the reason for my account being overdrawn was that I had received a post-dated cheque for $1,700.00 from a customer, and this had not been cleared. However, to avoid a repetition I have transferred $1,500.00 from my deposit account into my current account, and this should ensure against overdrawing in future. Thank you for passing the credit transfer to Homemakers despite the debit balance it created. Yours sincerely Robert Hughes

EXAMPLES Request for an overdraft or loan

Dear Mr Evans

I would like to make an appointment with you to discuss an overdraft or a Ioan to enable me to expand my business. I have been testing the market with a new line of furniture assembly kits, and have found that demand for these kits, both here and overseas has exceeded my expectations. In the past six months alone I have had over $6o,ooo worth of orders, half of which I have been unable to fulfil because of my limited resources. I would need a loan for about $118,000 to buy additional equipment and raw materials.I can offer $8,000 in ordinary shares, and $3,000 in local government bonds as part security. I estimate it would take me about nine months to repay a loan of this size.
I enclose an audited copy of the company's current balance sheet, which I imagine you will wish to inspect prior to our meeting.

I look forward to hearing from you.

Thank you for your attention.