- •Banking 2 documentary collection. Some aspects of commercial banking
- •1.1. The collection order of a bank
- •1.2 Documents are presented for collection
- •1.3 A collection order is not acknowledged
- •1.4 Returning the accepted drafts
- •1.5 Payment guarantee granted by the bank
- •2 Letter of guarantee
- •2.1 Correspondance on letter of guarantee
- •2.2 Payment guarantee granted by the bank
- •2.3 Performance guarantee granted by the bank
- •Part II
- •3 Some aspects of commercial banking
- •3.1 Opening a current account
- •3.2 Problems on standing order
- •3.3 Request for an overdraft
- •3.4 Advice of granting an overdraft
- •Vocabulary
- •Part II
- •Part II
Part II
3 Some aspects of commercial banking
Apart from dealing with exporters and importers, please note that banks also provide commercial services to clients in home banking. Here are some aspects of commercial banking.
3.1 Opening a current account
Opening a current account for a company the bank is interested in certain details of the business, which include its address, legal status, its activities, connected companies etc. The bank also needs to know the names and signatures of the owners of the business and who has the right to sign cheques. Sometimes the company may want two signatures on each cheque.
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Messrs. Nolestru & Nolestru 67 Eastern Road, Birmingham
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Our ref. Your ref.
4 November 20__ South Bank South bank House Borough Road London SE1 0AA
Dear Sir,
With reference to the telephone conversation of today’s date I would ask you to open a current account in the trading name of Messrs. Nolestru & Nolestru, 67 Eastern Road, Birmingham.
I enclose specimen signatures of the partners, either of whom may sign documents on behalf of the company. You may apply for references about my financial standing to Brawn & Co. banking with your branch. A cheque for 1,000.00 pounds and a paying-in slip are attached hereto.
Yours faithfully, A.Putley A.Putley Finance Manager |
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3.2 Problems on standing order
Standing order is an instruction of the payer to a bank to make regular payments to the payee on a particular day every month. Standing order is an instruction of the payer to a bank to make regular payments to the payee on a particular day every month. Standing orders are useful for regular outgoings such as rent, electricity, gas and telephone bills. They are also used for large monthly items over long periods such as mortgage payments or car purchase.
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Messrs. Nolestru & Nolestru 67 Eastern Road, Birmingham
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Our ref. Your ref.
7 November 20__ South Bank South Bank House Borough Road London SE1 0AA
Dear Sir, Account No. 9661510
Our landlords, Thomson & Lartinet, inform us that by the present moment they have not received the money due for the two-months’ rent.
With reference to the above account we would kindly ask you to give your debit entries for £450.00 and £450.00 on 2 April and 2 May respectively – for the monthly rent payment by standing order established with your bank.
Your earliest reply will be appreciated.
Yours faithfully, A.Putley A.Putley Finance Manager |
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3.3 Request for an overdraft
Accounts may be overdrawn, i.e. more money is taken than there is on credit. This can be done either with the bank’s manager agreement or using special current accounts where overdraft facilities are automatically included for an extra charge.
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Messrs. Nolestru & Nolestru 67 Eastern Road, Birmingham
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Our ref. Your ref.
14 November 20__ South Bank South Bank House Borough Road London SE1 0AA
Dear Sir,
With reference to our interview of yesterday, I would ask for your authorization to overdraw my account up to a limit of £5,000.00 at any time.
Please find enclosed as a security share certificates worth £4,000.00.
An audited copy of the company’s current balance sheet, which I imagine you wish to inspect, is attached hereto.
I look forward to hearing from you.
Yours faithfully, A.Putley A.Putley Finance Manager
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