BANKS

In thinking of banks most people in England picture the big four : Barclays, Lloyds,
Midland and National Westminster (NatWest)-which at present occupies the tallest building in
London. These banks are known as clearing banks or commercial banks. They have
thousands of branches throughout Great Britain.
They offer two kinds of accounts to their account holders: current accounts and
deposit accounts.
If you do not need to use your money immediately, you take it to the bank and put it into
your current account. Then, when you want to withdraw money, you write a cheque. You can
also use cheques to pay your bills.
A bank statement tells you what you have put into your account, what you have taken out of
the account, and what is left at the end the balance. A bank will allow you to check your
balance, that is, find out how much money there is in your account.
Sometimes your balance is shown in red. This means that you have withdrawn more
money than there was in the account. You are overdrawn (or have an overdraft). That is, you
owe the bank money and you have to pay interest. Because the balance is shown in red, this is
called being in the red.
In addition to a current account, you may also have a deposit account. The bank pays you
a little interest on the money which you keep in a deposit account, whereas it pays you nothing
for a current account. The disadvantage of a deposit account is that you have no cheque book,
so you cannot use it to pay your bills. Deposit accounts are called time deposits in the U.S. and
savings accounts in France and other European countries.
If you want to pay in money, you will use one form for your current account and a
different one for your deposit account. These forms are often put out on the counter for
customers to take.
The other kind of banks in England are merchant banks. Unlike the clearing banks, they
do not normally offer services to the general public. They have no branch network. They are
more interested in the larger companies as they raise loans for them. They specialize in all
areas of financing and international trade.
Currently, the largest merchant bank in Britain is S.G. Warburg.

I Answer the questions:

1. Which two groups can banks in England be divided into?
2. What is the difference between them?
3. Who are the big four?
4. What is a current account?
5. What can you use your cheque book for?
6. What does being in the red mean?
7. What is the main difference between a current account and a deposit account?
8. How do you pay in money?

II Look at this advertisement. What does it say?

THRE JST ISNT ENGH SPCE ON THS PSTER TO XPLN ALL THE SRVCES NTNL WSTMNSTR BNK CAN
OFFR YR BUSINSS.