The clearing system

Alpha, a customer of Barclays Bank, Penzance, writes a cheque to Beta. Beta is a customer of Lloyds Bank, Stoke and pays the cheque into his branch at Stoke on 24 October 2003.

VOCABULARY settlement - розрахунок

NOTES due to - належний

to draw out/issue/make out a cheque -

виписати чек

payee - ремітент, одержувач

bank official - службовець банку

drawer - трасант

non-cash instrument - безготівковий

інструмент

total money supply - загальний обсяг

грошової маси

to honour a cheque - оплатити чек

to transfer - переказувати

standing order - постійне доручення

клієнта банку

to process - обробляти, опрацьовувати

voucher - розписка

stockbroker - біржовий маклер

solicitor - адвокат, юрисконсульт

access - доступ

to cancel a cheque - анулювати чек

to endorse a cheque - індосувати чек

to collect a cheque - інкасувати чек

EXERCISES I. Answer the following questions.

1. What is the basic principle behind clearing?

2. What does the payee's bank do when it receives a cheque?

3. Why are cheques fed into machine?

4. How are cheques processed in the Clearing House?

5. When is the cheque sent to the drawer's bank?

6. How long does the clearing process take?

7. Why might the drawer's bank decide not to honour a cheque?

PART III. BANKING

II. Cheques. Supply one word or phrase from the box below for each numbered space. (Some words are used twice.)

payee	account	cash	crossing	make out
identity	bearer	lines	crossed	write
drawee	person	cheques	money
drawer	open	paid	order

The great advantage of using (1)____ for payments is that you don't have to carry large

amounts of (2)___ around with you. Your money remains in your bank (3)______ where it is

safe from loss or theft. A cheque is simply an (4)_____ in writing to your bank to pay money

from your (5)____ to someone else. This can be done anywhere without going near a bank.

You simply (6)____ the cheque and give it to the payee. You are the (7)______, your bank is

the (8)___ and the person you are paying is the (9)_____.

Nowadays cheques are usually printed with two (10)______ down the middle which are

called the crossing. A (11)_____ cheque means the money can only be (12)_____ into a bank

account. If the cheque is crossed 'Account (13)______ " it can only be paid into the account

of the (14) ____ named on the cheque. On the other hand an (15) _________ cheque can be

cashed, if the (16)____ has written "Pay Cash" or "Pay (17)______ " instead of the name of a

payee.

Cheques without the (18)_____ lines printed on them are (19)______ cheques and can be

cashed or paid into the payee's bank. In this case a letter of authority from the drawer is
needed and proof of (20)____ from the bearer.

III. A Crossed Cheque. Study the cheque and complete the labels, using the expressions in the box.

drawer	drawee (drawer's bank)	cheque number	drawer's signature
date	amount in words	account number	counterfoil
payee	amount in figures	sort code	crossing

UNIT 6. CHEQUES AND CHEQUE CLEARING SYSTEM

IV Clearing a Cheque. Look at the flow diagram, which shows the stages involved in processing a cheque in the United States. Then number the stages below according to the diagram.

V Particles and prepositions. Choose the correct alternative to complete each sentence.

1. A cheque is simply an order to your bank to pay money (1) from/in/within/out of your account (2) for/to/in favour of/at someone else.

2. A customer can pay (3) with/by/in/for cheque for goods and services.

3. With a bank card, the customer's bank guarantees payment (4) down to/up to/along with/over a limit, say 50 or 100 pounds.

4. When an account holder pays a cheque (5) for/into/in/within her bank, the bank credits the amount of the cheque (6) in/by/for/to her account and sends the cheque to be presented (7) at/to/towards/over the drawer's bank.

5. In Britain the clearing system is operated (8) in/with/for/by the Clearing House in London.

6. The Clearing House adds up the total each bank owes to each other bank and reconciles the difference (9) in/for/by/of the banks' accounts (10) at/on/by/with the Bank of England.

7. This process, from the time when the payee pays the cheque (11) at/inside/by/into her bank until the cheque is debited (12) at/to/in/by the drawer's bank account, takes three days.

8. Payment (13) under/with/in/by some form of non-cash instrument, such as cheques, is very common in the UK.

VI. Match the banking verbs with the correct explanation.

Verb	Explanation
1. credit	a) pass a cheque through the clearing system
2. debit	b) write a cheque
3.honour	c) make two accounts agree
4. present	d) change an account
5. draw	e) move round the country
6. clear	f) draw two lines down the middle of a cheque

PART III. BANKING

7. cross	g) add money into an account
8. reconcile	h) show and ask for payment
9. adjust	i)pay
10. circulate	j) subtract money from an account

VII. Odd one out. In each set of words one is the odd one out: different from the others. Find the

word which is different...

1. accept - borrow - spend - take

2. aeroplane - fax - phone - telex

3. drop - fall - plunge - soar

4. accountant - customer - cashier - manager

5. affluent - poor - rich - wealthy

6. factory - office - ship - warehouse

7. disk - keyboard - screen - typewriter

8. dismiss - fire - resign - sack

9. absorption - closure - merger - takeover

10. expand - grow - increase - shrink

11. acquire - buy - purchase - sell

12. abroad - domestic - foreign - overseas

13. costly - dear - economical - expensive

14. EC-EEC-EG-EU

15. computer - database - spreadsheet - word processor

16. ask for - demand - offer - request

17. bill - invoice - price list - receipt

18. hire - lease - purchase - rent

19. design - make - manufacture - produce

20. dong - lei - mark - quango

VIII. Phrasal rerbs. Complete the sentences below with the phrasal words in the box. You will
have to change forms of some of the verbs to make the grammar of the sentence correct.
The first one has been done for you as an example.

a) "break off"	= to stop
b) "bring forward'	= to change to an earlier date
c) "carry on"	= to continue
d) "get across"	= to make someone understand
e) "hive off"	= to split off part of a company to form a smaller subsidiary
f) "hold down"	= to keep at a low level
g) "put into"	= to invest
h) "rake in"	= to make a lot of money
i) "run down"	= to reduce gradually
j) "send for"	= to ask or tell someone to come to see you
k) "set up"	= to begin or to organize
1) "stop over"	= to stay somewhere before continuing a journey
m) "take on"	= to agree to employ someone
n) "work out"	= to calculate
o) "write out"	= to write completely

1. This model is being replaced in January, so we'll start running down our stocks now.

2. What I want to____ in my report is that this is not a serious problem.

3. The bank is___ its leasing operation to form a new company.

4. This is a good policy: I think we should_____ doing things this way.

5. The boss has___ me - I hope it isn't bad news.

UNIT 6. CHEQUES AND CHEQUE CLEARING SYSTEM

6. On the way to Sydney we____ in Hong Kong.

7. A new department was____ in order to exploit a gap in the market.

8. We are___ our prices until the economy improves.

9. I'll take some notes in the meeting and_____ a full report later.

10. Wednesday is a difficult day: can I___ our meeting____ to Tuesday?

11. They talked for hours, but could not agree, negotiations were finally______ at midnight.

12. The company is very successful, they've just____ another 600 workers.

13. He sold his house and car and____ everything he had____ the business.

14. When I___ the price in dollars I realized it was scandalous.

15. It was a risk, but he succeeded and now he's_____ it____.

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