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

credits.

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.

ENGLISH BANKS

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

banks.

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

current accounts;

– to provide overdrafts to both personal and business customers;

– to exchange money;

– to supply economic information and to prepare economic reviews to be

published;

– 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: 1600