V. Translate the text in writing: Savings banks and the National Giro

There are two major savings banks, the National Savings Bank which is operated by the Post Office on behalf of the Department for National Savings and the Trustee Savings Bank. Both banks provide deposit facilities for small savers and these are collected at 21 000 post offices (in the case of the NSB) and at 1 500 branches of the Trustees Saving Bank. The Trustees Savings Bank now provides a current account service (i.e. payments may be made by cheque); the National Savings Bank does not provide such a service, but the National Giro provides money transmission services. All of the assets of the National Saving Bank and greater part of the assets of the Trustees Savings Bank consist of government securities (i.e. loans to the government).

The National Giro is managed by the Post Office and commenced operations in 1968. Its aim is to provide a cheap, simple and quick money transmission service by making use of the existing network of post offices. All the records are kept, and the processing is carried out, at the computerised centre at Bootle. People holding giro accounts are provided with three basic services:

1. Transfers to other account holders. These are carried out by posting giro transfer forms to the computer centre. These transfers are free although there is a small charge for stationery.

2. Deposits. Deposits can be made in cash at any post office or by cheque. Deposits into one’s own account are free, but a charge is made when people pay into some other person’s account.

3. Payments. An account holder can draw cash through post offices or he can make payment to a non-account holder by means of a postal cheque. In each case, as long as the account is in credit, no charge is made for these services.

The giro system is not new, most western European countries have been running such systems for many years. In the UK the system started slowly and losses were made in the early years. It has since broadened its services to include deposit accounts, personal loans and limited overdraft facilities and cheque guarantee cards. It is now operating profitably and is widely used for local authority rent payments and for the payments of social security benefits.

VI. Reproduce the main idea of the text: The Bankers’ Clearing House

The procedure for making payments by cheque creates problems when the person making the payment keeps his account in a different bank from that which holds the account of the person receiving the payment. The final settlement of the debt will require a movement of funds from one bank to another. In any one day there will be many thousands of such inter-bank transactions to be carried out; many of them offset each other. There will be a large number of cheques draw on accounts in Bank A payable to accounts in Bank B, but there will also be many cheques requiring a transfer of funds in the opposite direction.

Each separate bank in a multi-bank system will find itself in this kind of situation at the end of the day. It is an obvious solution for each bank to pay (or receive) the net amount owing after the banks have totalled their claims against each other. This is the function of the Bankers’ Clearing House. Cheques drawn on one bank but payable to another are sent to the clearing house where the mutual claims are offset and the banks merely settle the outstanding amounts. These payments from one bank to another are carried out by means of cheques drawn on the bankers’ deposits at the Bank of England. It is important to note, however, that when one bank makes a payment to another bank, one bank loses cash and the other gains cash. The reason for this, of course, is that the deposits at the central bank are part of the banks’ cash reserves.