Demand deposits are credited to the current account, providing the basis for a variety of bank services. In 1960. in the UK there were so-called fiscal accounts, which is closely related to the current.
The client calculates the amount of their annual costs (such as costs for electricity, gas, season tickets, vacation, insurance payments) and divide it into 12 pieces. The resulting amount shall be transferred each month from your checking account on a budget with one made by the customer's order. With the budget account, the bank pays these costs. If the client does not have enough money, the bank can give him credit.
Savings deposits are intended to mobilize the smallest savings. Savings accounts can be opened even in such small amounts as 25 pence. Bank interest begins to be paid when the amount in a savings account reaches a certain minimum. Among the active operations of deposit banks dominated by traditional commercial banks accounting and loan operations and investments in securities.
The most common form of lending in the UK is an overdraft. Traditionally, the deposit banks specialize in providing short-term loans for working capital to trade. In the postwar period, expanding the provision of medium - and long-term loans: 2 to 7 years, and sometimes up to 20 years. Longer maturities primarily by means of extending the overdraft.
Although the formal overdraft - this demand loan, for large banks extend its customers from year to year, turning in the middle - and even long-term loan. Along with the extension of deadlines is an expansion of lending facilities depository banks.
Since the 1960's. deposit banks have begun to provide medium-and long-term export credit loans for machinery and equipment. Such loans are made directly to foreign importers, who thus have the opportunity to pay British exports.
Loans are granted under the state guarantee. In carrying out foreign trade financing, deposit banks are invading the traditional sphere of activity of commercial banks. Beginning in the 1980s. significantly expanding the provision of loans to the public for the purchase and construction of houses and flats (for mortgages, life insurance policy).
Extension of time and the expansion of lending facilities is one way to increase the range of operations of deposit of banks, their penetration in the activities of other banks and lending institutions in an increasingly competitive environment of the past. Another way to invade the scope of other financial institutions - the creation of subsidiaries, branches, representative ments, specialized subsidiaries. Thus, the deposit banks to invest their money in shares of companies.
engaged in medium-and long-term lending to industry and agriculture, the shares of financial houses, set up their branches that specialize in providing medium-term loans for the purchase of durable goods. Deposit banks also actively introduced in the scope of foreign banks opening branches in different countries. In 1960.
deposit banks have become major participants in the money market, performing traditional surgery discount houses. Other banks England In contrast to the "retail" deposit banks, other UK banks (other than savings) are "wholesale", as have major deal mainly with companies and institutions, not individuals. Merchant banks are derived from trading companies, specializing in the acceptance of bills. The basis of their activities as an excellent knowledge of the solvency of individual firms in different parts of the world.
Acceptance operations proved so profitable that in the end, these firms declined to trade, have turned to the banks that specialize in providing acceptance credit, and received the name of acceptance houses. Acceptance at home over time expanded its inter tional operations. They were placed on the London market, long-term bonds of foreign governments and companies, investors bought the UK and other countries.
Gradually, London has become the main center of inter tional long-term loan. After the global economic crisis of 1929-1933.
, Which led to a reduction in international trade and lending operations, acceptance houses began increasingly to expand operations in the domestic market. This applies to the acceptance operations and the operations of placement.