VARIOUS SERVICES OF BANKS
Banker’s services cover an enormous range of activities today.
A full list would include:
1. Current account services
They are extended to anyone whom banks regard as reliable. A new depositor
should be recommended by his employer or should present a reference. If this
proves satisfactory the bank will accept a deposit from him which will be entered
in his current account.
A cheque book will then be issued free of charge. Once the customer has re-
ceived his cheque book he may use the cheques to order the banker to pay our
sums of money from his current account. Money is being paid into and paid out of
the account as often as the customer finds convenient.
2. Deposit account services
Companies and individuals can deposit cash resources that are not needed at
present. They need it or after a certain period in case of time deposit.
3. Savings account services
It enables small savers to put money away for particular purposes, for exam-
ple for holidays.
4. Other services:
– foreign exchange;
– foreign exchange transactions;
– services in foreign trade payments;
– discounting bills of exchange;
– granting loans;
– investment management services;
– cash dispensers and automated teller machines;
– safe custody;
– economic information;
– banker’s credit cards and many others.
TAX a rate or sum of money assessed on a person or property for the
support of the government, and commonly levied upon assets or real property (property tax), or income derived from wages, etc. (income tax), or upon the sale or purchase of goods (sales tax).
AD VALOREN TAX (VALUE
ADDED TAX) a tax imposed upon the difference between the cost of an asset
to the taxpayer and the present fair market value of such asset; a tax based
on a percentage of the value of the property subject to taxation, as op-
posed to a specific tax, which is a fixed sum applied to all of a certain
class of articles.
INCOME TAX a tax imposed upon income received which is recog-
nized for tax purposes by the taxpayers, reduced by the allowable deduction and
PROPERTY TAX generally, tax imposed by municipalities upon owners of property within their jurisdiction based upon the value of such property.
SALES TAX a tax generally imposed by state or local government on
the sale of certain items that are generally not for resale. In general, the sales tax is at a set rate regardless of the purchase price of the property.
UNIFIED ESTATE AND GIFT
TAX a federal tax imposed upon the net value of an estate and on gifts of certain amounts. The transferor is liable for the gift taxes but if the transferor
fails to pay the gift tax, the transferee may be held liable for its payment.
WITHHOLDING TAX the amount of income tax withheld from a
payment of income. For example, an employer is required to withhold taxes
from an employee’s salary when the salary is paid to the employee’s salary
when the salary is paid to the employee. The amount withheld is a credit
against the amount of income taxes that the employee must pay on income
earned for the taxable year.
Today the British banking is a complicated tripartite system like a three-layer
cake. The system is headed by the Bank of England.
This bank was established under a royal charter in 1694. The head of the
Bank is Governor of the Bank appointed by the Queen on the recommendation of
the Prime Minister. The Queen also appoints Deputy Governor and the Court of
the Directors, which consists of 16 directors.
The Bank of England is a central bank or a national bank. It controls the Brit-
ish banking system, is sues banknotes and mints coins. It lends and borrows mon-
ey for the government, manages the national debt and is in the control of the na-
tion’s gold reserve. The other two layers are:
– the commercial or joint stock clearing banks;
– specialized banking institutions such as the discount houses and merchant
The commercial or joint- stock banks deal with the general public. The four
large English commercial banks are known as the Big Four. They are Barclays,
Lloyds, the Midland, and the National Westminster. Together they have up-
wards of 10.000 branches. Commercial banks render various services to compa-
nies and individuals. Some of the services are:
– to receive or accept from their customers the deposit of money;
– to collect and transfer money both at home and abroad against deposit and
– to provide overdrafts to both personal and business customers;
– to exchange money;
– to supply economic information and to prepare economic reviews to be
– to make foreign exchange transactions, including spot transactions, for-
ward transactions and swap transactions;
– to issue various banker’s cards;
– to lend loans to their customers.
Merchant banks and discount houses deal only with special customers pro-
viding funds for special purposes. They accept commercial bills of exchange and
offer quite a lot of financial services. They provide advisory services about new
issues of securities, mergers, take-overs and reorganizations. They also arrange fi-
nancing for their customers and provide fund-management services.
Besides there is a big group of banks in the UK made up of foreign banks.
All the major foreign banks are represented in the UK by subsidiary, branch, rep-
resentative offices or consortium. They provide finance both in sterling and in oth-
er currencies and offer a wide range of financial services.
Lombard Street is the symbol of British banking. This is the place where the
first bankers coming from Italy settled.
Date: 2016-04-22; view: 777