Unit One
The Structure and Functions of a Bank
| accountant board of directors capital current account deposit account clerk depositor dividend draw upon an account (v) invest (v) joint stock | бухгалтер совет директоров капитал текущий счет депозитный счет служащий вкладчик дивиденд снимать со счета инвестировать акционерный капитал | interest loan profit reserve run the hank (v) shares shareholder statement standing order | процент, процентный доход ссуда, заем, кредит прибыль резерв, запас управлять банком акции акционер выписка из банковского счета постоянное поручение клиента банку |
Dialogue
Read the dialogue in pairs.
Student: Who really owns the bank?
Banker: The stockholders own it. In the beginning, they put up the necessary capital and were granted a charier from the
government.
S.: Are the members of the board of directors stockholders?
В.: Oh, yes. They're chosen by the other stockholders to operate the bank.
S.: And the board hires Incorporation president and vice-presidents to manage the holding?
B.: That's right. Along with the cashier, the tellers and the clerical workers.
S.: I guess most of your work has to do with checking and saving accounts and making loans.
B.: Yes. But we invest money too. Planning the bank's investments is also very important.
S.: Do you divide all the profits among the stockholders?
B.: Not all of them. The stockholders receive regular dividends. But some of our earnings are held in reserve accounts.
S.: I suppose that would be necessary.
B.: Here's a copy of our last published Statement. You see, the reserves are shown here as surplus and undivided profits.
Questions on the dialogue:
1. Who owns the bank?
2. How does a bank start?
3. Who chooses the board?
4. What's the board's task?
5. Who hires the employees?
6. What are the bank's main activities?
7. How are the profits distributed?
8. How are the stockholders kept informed?
Text 1
As you read the passage, find the answers to the questions given below.
The English commercial banks have branches in all the major towns and a similar structure and mode of working is common to them all. The owners are the shareholders. At the outset they provide the necessary capital. They are all organized on the joint stock principle and are registered public companies.
The Chairman and Board of Directors are elected by the ordinary shareholders at the Annual General Meeting and are responsible for the efficient management of the bank. The Board is concerned with the overall policy of the bank and the major decisions which put that policy into effect.
The Board will appoint a Managing Director who is directly responsible to them and a member of the Board. They will also appoint the most senior executives who in turn appoint the rest of the clerical staff who will be responsible in different capacities for the day to day running of the bank.
The essence of a bank's activities is the collection of deposits through current accounts and deposit accounts and the use of these funds to provide loans or funds for investment. The current account is the one commonly held and is drawn upon by cheques and standing orders. The deposit account is more in the nature of a savings account. The pattern of investments which a bank decides upon is crucial because, on the one hand, the bank must use the funds wisely to make a profit and, on the other, funds must be available for depositors to withdraw when they wish to do so.
At the end of each business year the Directors recommend and the Annual General Meeting decides how much of the profit should be distributed to the shareholders as dividend, and how much should be retained in the business. In preparation for the Annual General Meeting, a bank publishes its Report and Accounts. These must be sent lo every shareholder and are also available for anyone with an interest in the affairs of the bank. From the published accounts shareholders can easily determine the total profits the bank has earned and how much is available for distribution.
Questions on the text:
1. Who owns the English commercial bank?
2. How does a bank start?
3. Who chooses the Board?
4. What is the Board's task?
5. Who hires the employees?
6. What are the bank's main activities?
7. How are the profits distributed?
8. How are the shareholders kept informed?
Vocabulary Exercises
Comparison of American and British terms. The dialogue deals with the structure and functions of an American bank, while the text describes an English commercial bank. There are some differences in American and British terminology.
1. Find American terms corresponding to the British ones given below:
British terms American terms
accountant Report and Accounts
cheque retained and undistributed profits
current account to run a bank
deposit account shareholder
managing director
2. Find proper definitions:
| 1. Capital 2. Dividend 3. Deposit account 4. Retained profits 5. Current account | a) a sum of money paid to a shareholder out of profits in relation to his investment b) an account in a hank from which money can be drawn by cheque c) profits not paid out as dividends and added to the surplus d) the money value of the shareholders stake in the hank or company e) an account in a hank on which the depositor receives interest |
3. Choose the right answer:
1. The people who decide the general policy of the hank are:
a) shareholders, b) the board of directors, c) the executive staff.
2. The bank's financial position can be discovered from:
a) a report, b) an announcement, c) a statement.
3. Bank profits kept back for later use are:
a) withdrawals, b) surplus, c) retained profits.
4. Earnings remaining after all the expenses of a business activity have been paid are:
a) dividend, b) capital, c) profit.
5. Money which one person allows another to use for a specified time and which will then he returned is:
a) investment, b) loan, c) interest.
4. Using the information in the passage, say what is true and what is false. Correct the false sentences:
1. Members of the Board of Directors are shareholders.
2. All the shareholders participate in running the hank.
3. All the bank's profits are divided among the shareholders.
4. All the retained profits of the bank belong to the shareholders.
5. The reserves are shown in the statement as retained.
5. Using suffixes -er, -or, -ier, -ent, -ial, etc., give noun which are related to the following:
invest hold deposit office own
cash direct manage execute work
6. Find synonyms for the following. Use a dictionary whenever necessary.
own to run to collect to appoint to distribute to receive
7. Find the nouns that are qualified in the passage by these adjectives and make, up sentences of you own:
clerical necessary over-all day to day published total
8. Explain the following:
1. to raise capital
2. to become a public company
3. to put money into business
4. an account in a bank from which money can be drawn by cheque ! -
5. profits not paid out as dividends
9. Fill in the blanks with proper words or phrases:
1. The board appoints the … and the ….
2. An employee in a bank who pays out and receives money is called a ….
3. The Board of Directors is elected by the ….
4. The Board may distribute … to the shareholders out of the profits once or twice a year.
5. The … may be high even after all the bank's expenses are paid.
6. A bank will need to seek approval for a large … to a customer.
7. The Board will discuss the bank's … in other businesses.
10. Make sentences of your own:
1. to put up the necessary capital
2. to be registered as a public company
3. to run a bank
4. the board of directors
5. shareholders
6. current account
7. deposit account
8. to make a loan
Text 2
Read the passage and find answers to the following questions:
1. Why did the banking industry grow quickly over the period of last 10 years?
2. What did the Nat West do to meet the increasing demand for its services'?
3. According to what are the bank's clerical jobs graded?
4. Where does everyone start a job in the bank?
5. Work in which grade ensures more personal contact with the customer?
6. Which clerk sees to the customers' regular payments being made on time?
7. Which is the best known job in banking?
8. Which clerk deals with customers' travel requirements?
9. Which clerk helps customers to manage their financial affairs?
10. Which clerk safeguards the bank's interests in lending money?
11. Which job in the bank offers the best opportunities to exercise one's own judgement?
Job-Career-Profession
The banking industry has changed radically over the last 10 years. As part of that industry National Westminster Bank has grown quickly and is still growing. We have more customers than ever before, people who have realized that having a bank account is a greater help in organizing their financial affairs. Nat West has built a range of financial services so diverse that we can now offer to our customers assistance across the whole range of money matters — from simple things like cashing cheques and looking after savings to the complexities of insurance, taxation and investment.
It takes a lot of people lo run one of the biggest and most efficient financial organisations in the world. Our clerical jobs are graded from 1 to 4 according to Inc demands and responsibilities of each particular position.
Grade 1. This is the most junior of the clerical jobs. Because we believe in a system of progressive promotion, everyone starts here, no matter what they see as their ultimate role. You will probably begin by preparing customers' statements, sorting cheques and learning to use accounting machines.
Grade 2. Work in this grade gives you more personal contact with the customers. This is particularly so when looking after the enquiry coupler, helping the customers to solve any problems they may have with their accounts, answering their questions, outlining the bank's services.
Other grade 2 jobs which you could find yourself doing include controlling your Branch's records. Duties cover opening new accounts, transferring existing accounts to and from our many Branches throughout the country and ensuring that information relating to your customers is kept up to date.
Then there is the Standing Order Clerk. Many of our customers arrange for regular payments to be made from their accounts for such items as mortgage deductions, insurance premiums and subscriptions. It is the Standing Order Clerk who ensures that these payments are made correctly and on time.
Perhaps the best known of all the jobs in banking is that of the cashier and that is usually a grade 2 job. Al the counter you will meet many different people, your own customers, customers from other branches and banks as well as people who do not have a bank account. You will be dealing with many thousands of pounds every day so accuracy is vital.
Grade 3. By the time you reach this stage the work is becoming more complex and each job carries a greater degree of responsibility. Being a foreign clerk, for instance, means that you will be dealing with customers' Travel requirements,
supplying foreign currencies and Travel cheques and assisting with passport applications and Travel insurance.
The Sale Custody Clerk helps customers to manage their financial affairs, acting on their behalf to buy or sell stocks and shares, obtaining advice from stockbrokers, or arranging insurance cover. Also there are valuables and documents, which customers deposit at the branch for safe keeping, to be looked after — which explains the title of the job.
Grade 4. This is the senior of the clerical grades and contains among others the jobs which really involve you for the first
time in one of the bank's major activities — lending money. Whether the loan is to a private individual, to a small business or to a large industrial company the bank will often require some form of security lo be provided by the borrowers as to reduce the risk to the bank. Such security can conic in many different forms including mortgages over houses or life policies and there are several legal formalities to be completed before the bank's interests are fully safeguarded. Dealing with these formalities is the job of the Security Clerk who naturally works closely with the Branch Manager.
Even more involved with Inc Manager is the Manager's Clerk who acts as a Personal Assistant providing all the information needed for the day to day control of accounts. As Manager's Clerk you will be given opportunity to exercise your own judgement in a number of matters.
Adapted from National Westminster Bank's booklet
Unit Two
Currency and Other Forms of Exchange
| accept a bill (v) bank draft bank money order banknote, note, bill (US) bearer bill of exchange cash (v) cashier's check (US) certificate certified check certify (v) cheque, check (US) traveller's cheque coin creditor credit standing payer | акцептировать чек банковская тратта банковский денежный перевод банкнота предъявитель, держатель переводной вексель получать наличные, обналичивать кассирский чек сертификат, свидетельство удостоверенный чек заверять, удостоверять чек дорожный чек монета кредитор кредитоспособность плательщик по кредитным обязательствам | currency denomination discount a bill (v) endorse/indorse (v) forms of exchange honour a bill (v) identification in lieu of issue (v) legal mature (v) negotiable payee sight draft legal tender | денежное обращение, деньги, валюта деноминация дисконтировать вексель индоссировать, делать передаточную надпись формы обмена акцептовать вексель идентификация ценных бумаг вместо выпускать в обращение законное платежное средство наступать (о сроке платежа) отчуждаемый, передаваемый ремитент, получатель платежа по кредитным обязательствам вексель на предъявителя законное платежное средство |
Dialogue
Read the dialogue.
Student: The bank must use just about every form of exchange in a day's work.
Cashier: Just about. Of course, we constantly handle coins and bills of every denomination.
S.: They're what you call legal tender.
C.: Yes. Or currency. A nation's currency is its legal tender.
S.: But a check isn't legal tender.
C.: No. However checks are a very common form of exchange, and they are generally accepted in lieu of currency.
S.: Are traveller's checks currency?
C.: Not in a strict sense. But they're immediately negotiable everywhere. For instance, even merchants will cash
them under most circumstances.
S.: The bearer need only present proper identification.
C.: That's right.
S.: Well, what’s a bank note? Is that currency?
C.: Definitely. Bank notes are issued by the banks of the Federal Reserve System, and they're legal tender just as
silver certificates are.
S.: That's what I thought. But getting back to checks, why are bank drafts sometimes preferred over checks?
C.: Well, in the case of a check, the party who signs it is the only one who guarantees payment. But a bank draft is
issued and guaranteed by a bank.
S.: Is that true of cashier's checks, too?
C.: Yes. And also of certified checks and bank money orders.
S.: What about sight drafts?
C.: Now, sight drafts are different. They're a form of request for payment through a bank.
Questions on the dialogue:
1. What forms of exchange are called legal tender?
2. Why are checks a common form of exchange?
3. How are traveller's checks useful?
4. Which banks in the USA may issue bank notes?
5. What is the difference between a check and a bank draft?
6. What do cashier's checks, certified checks and bank drafts have in common?
7. How do sight drafts differ?
Text
The work of bank centres around money and financial services. Virtually any activity involving money or advice about financial matters is undertaken by all the commercial banks. The immediate service offered by the bank is the receipt for deposit of coins, notes and cheques and (he cashing of cheques, through current accounts. Coins and notes in circulation have the status of "legal tender" that is to say they must be taken in payment of a debt although the extend to which this applies in the case of coins is deliberately restricted for the sake of convenience.
The most common means of payment, particularly for significant sums of money, is the cheque since it is both safer and more convenient than using cash. However, it is not legal tender and creditors can refuse to accept it if they wish. Normally both national cheques and traveller's cheques arc readily negotiable if the bearer has some means of proving his identity and the creditor can be sure that the cheque will be «honoured». To assist the use of cheques banks now provide their customers with bankers cards which, when used in association with a cheque, will guarantee it up to a stated maximum. If a customer wishes to make payments of large amounts of money by cheque and is not known to the creditor, then he may obtain a «certified cheque» from his bank. Such a cheque is signed by the bank and therefore payment is guaranteed.
Those trading overseas, or in conditions where there may be a significant time lapse between sending out goods and their receipt by the customer, may use a Bill of exchange as a means of payment. This is really a post dated cheque which assures the creditor payment but also gives the buyer opportunity to inspect the goods before the transaction is completed. Those whose credit standing is unknown may have to get the Bill «accepted» before a creditor will take it. Such a process guarantees payment and most work of this kind is undertaken by the merchant banks. Because Bills are post dated creditors may have to wait some time for their money. They can overcome this problem by endorsing the Bill and then either discounting it with a Discount House or a bank or passing it on to another trader in settlement of a debt of their own. By the time it comes to maturity a Bill may have passed through several hands and on each occasion it must be endorsed. The commercial banks participate in this activity in two ways: in part by lending money to the discount houses and in part by discounting bills for their own customers.
Questions on the text:
1. What forms of money are called legal tender?
2. Why are cheques a common form of exchange?
3. What is the main purpose of a banker's card?
4. What is the special feature of a certified cheque?
5. What is the main use of a Bill of Exchange?
6. Why does a Bill sometimes have to be "accepted"?
7. In which two ways might a creditor who needed the money dispose of a Bill?
Vocabulary Exercises
1. List all the forms of money mentioned in the passage and match them with the following definitions:
1. A bank's unqualified guarantee to pay a specified sum to a specified individual or organization.
2. A negotiable instrument issued only by the Bank of England and signed by the Chief Cashier of the Bank.
3. A written order to a bank to pay a stated amount of money.
4. A negotiable instrument issued by a bank in exchange for cash and readily usable in most parts of the world.
5. Taken money largely used for small purchases and transactions.
6. A written order to a bank to pay a stated amount of money to a stated person or, after endorsement, to the bearer
on or within a stated time after a given date.
2. Choose the right answer:
1. "We constantly handle coins and bills" means:
a) cash them under most circumstances
b) deal with them
c) receive them
2. "bills of every denomination" denote:
a) bank notes of different values
b) bank notes of various sizes
c) other means of exchange
3. "Legal tender" is:
a) a type of paper currency
b) a requirement to accept in settlement of a debt
c) money guaranteed by a government
4. "both cheques and Traveller's cheques are readily accepted" means:
a) able to be given to another party
b) certified by the bank that funds are available
c) endorsed by an officer of the bank
5. "The cheque will be honoured" means:
a) that it will be readily accepted by creditors
b) that it will be treated with respect
c) that the bank will be ready to cash it
6. "a bearer" is:
a) a person who is named as payee on the exchange document
b) an officer of the bank who endorses the cheque
c) the person offering the exchange document and demanding payment
3. Say what is true and what is false. Correct the false sentences:
1. Coins and bills of every denomination are called legal tender.
2. Cheques are rarely accepted in lieu of currency.
3. To cash a Traveller's cheque the bearer need only present proper identification.
4. Bills of Exchange are not legal tender.
5. A cheque is always guaranteed by a bank.
6. Certified cheques are always guaranteed by a bank.
4. Using suffixes -cation, -cate, -ment, -ion, -ance, -ature, etc., give nouns which are related to the following verbs:
accept endorse prefer signify
certify invest present sign
circulate identify regulate state
denominate pay settle transact
5. Using prefaces dis-, il-, in-, ir-, un-, non-, etc., give negatives which are related to the following:
accepted honoured maturity regular
common legal negotiable significant
certified necessary
6. Combine the words listed below into meaningful two or three word expressions as possible:
account honoured proper
bank investment profit
bill identification regular
circulation legal reserve
cashier money shareholders
deposit maturity surplus
discount nation transaction
endorsing note traveller
earnings participation work
fellow payment undistributed
7. For each of the following phrases find another one in the text that explains it:
1. Currency issued by the central bank of a country.
2. A piece of currency made of metal.
3. Unit of the bank note's value.
4. A document in settlement of a large debt guaranteed by the bank.
5. A document which establishes the identity of a person settling by cheque.
6. Cashing in a Bill of Exchange before it is due for payment.
7. The bank's readiness to accept a cheque for payment.
8. Fill in the blanks with proper words or phrases:
bank notes honoured
bearer identification
coins issued
currency traveller's cheques
1. While travelling I do not like to carry large amounts of ….
2. I prefer to have … which are immediately negotiable.
3. Traveller's cheques are … in different denominations.
4. To cash the traveller's cheque the … should present proper identification.
5. However, there are merchants who will not accept traveller's cheques even though you present proper ….
6. I collect … of every denomination.
9. Write sentences of your own:
1. to sign a cheque to 6. endorse a cheque
2. to accept a cheque 7. to make out a cheque
3. to cash a cheque 8. to accept liability for
4. to make payment by cheque 9. to present your identification document
5. to certify a cheque 10. to settle business accounts