10 eng104-bai 6-v1.0

MONEY AND BANKING

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Unit 6: Money and banking

UNIT OBJECTIVES - MỤC TIÊU

DURATION (9 periods) - THỜI LƯỢNG HỌC (9 TIẾT)

• Provide students with the language and knowledge related to money and banking, and theservices provided by banks.

Cung cấp cho sinh viên vốn ngôn ngữ và kiến thức liên quan đến tiền tệ và ngân hàng, sự rađời của ngân hàng cùng với một số dịch vụ của ngân hàng cung cấp.

• Provide students the way to write a complaint letter.

Cung cấp cho sinh viên phương pháp viết một bức thư khiếu nại.

• At the end of this unit, students are able to talk and write about relevant issues as introducedwith basic knowledges of banking and banking services.

Sau khi kết thúc bài học này, sinh viên sẽ nắm được những kiến thức cơ bản về ngân hàng vàcác dịch vụ ngân hàng, có thể nói và viết về các vấn đề liên quan.

In this unit, we are going to learn language and knowledgerelated to money, banks and banking services.

Trong bài học này chúng ta sẽ học ngôn ngữ và kiến thứccơ bản về tiền tệ, ngân hàng và các dịch vụ ngân hàng.

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Match the terms or expressions in column A with their definition in column B.The suggested time to do this exercise is 10 minutes.

Text A: Read text A do exercices 2.1 and 2.2 below. The suggested time for reading the text and completing the exercises is 30 minutes

MONEY AND BANKING

A ll values in the economic system are measured in terms of money. Our goodsand services are sold for money, and that money is in turn exchanged for other goods and

services. Coins are adequate for small transactions, while paper notes are used for generalbusiness. There is additionally a wider sense of the word ‘money’, covering anything which

Column A Column B

1 Balance A A sum of money exchanged for goods or services

2 Transaction B To move or change something suddenly

3 Purchase C Specialized knowledge

4 Payment D The cost of sending letters, parcels etc by mail.

5 Option E Amounts of money

6 Free of charge F A document which lists the goods you have bought andtells you how much you must pay for them

7 Postage G A choice or alternative

8 Invoice H To buy

9 Funds I A movement of money in to or out of an account

10 Interest J To place money in a bank account

11 Switch K An advantage

12 Benefit L Without cost

13 Deposit M The amount of money in a bank account at a particulartime

14 Expertise N Money paid to someone who invests money

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is used as a means of exchange, whatever form it may take.Originally, a valuable metal (gold, silver or copper) servedas a constant store of value, and even today the Americandollar is technically ‘backed’ by the store of gold which the US government maintains. As gold has been universallyregarded as a very valuable metal, national currencies werefor many years judged in terms of the so-called ‘gold standard’.Nowadays, however, national currencies are considered tobe as strong as the national economies which support them.

V aluable metal has generally been replaced by paper notes. These notes are issued by governments and authorized banks, and are known as ‘legal tender’. Other arrangements

such as cheques and money orders are not legal tender. They perform the function of substitute money and are known as ‘instruments of credit’. Credit is offered only when creditors believe that they have a good chance of obtaining legal tender when they presentsuch instruments at a bank or other authorized institution. If a man’s assets are known to beconsiderable, then his credit will be good. If his assets are in doubt, then it may be difficultfor him to obtain large sums of credit or even to pay for goods with a cheque.

T he value of money is basically its value as a mediumof exchange, or, as economists put it, its ‘purchasing

power’. This purchasing power is dependent on supply and demand. The demand for money is reckonable as thequantity needed to effect business transactions. An increasein business requires an increase in the amount of moneycoming into general circulation. But the demand for money

is related not only to the quantity of business but also to the rapidity with which the businessis done. The supply of money, on the other hand, is the actual amount in notes and coinsavailable for business purposes. If too much money is available, its value decreases, and itdoes not buy as much as it did, say, five years earlier. This condition is known as ‘inflation’.

B anks are closely concerned with the flow of money into and out of the economy. They often co-operate with governments in efforts to stabilize economies and to prevent

inflation. They are specialists in providing capital and allocating funds on credit. Banks originated as places to which people took their valuables for safe-keeping, but today the greatbanks of the world have many functions in addition to acting as guardians of valuable privatepossessions.

B anks normally receive money from their customers intwo distinct forms: on current account, and on deposit

account. With a current account, a customer can issue personal cheques. No interest is paid by the bank on this typeof account. With a deposit account, however, the customerundertakes to leave his money in the bank for a minimumspecified period of time. Interest is paid on this money.

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T he bank is turn lends the deposited money to customers who need capital. This activity

earns interest for the bank, and this interest is almost always at a higher rate than any

interest which the bank pays to its depositors. In this way the bank makes its main profits.

W e can say that the primary function of a bank today is to

act as an intermediary between depositors who wish to

make interest on their savings, and borrowers who wish to

obtain capital. The bank is a reservoir of loanable money,

with streams of money flowing in and out. For this reason,

economists and financiers often talk of money being ‘liquid’,

or of the ‘liquidity’ of money. Many small sums which might

not otherwise be used as capital are rendered useful simply

because the bank acts as a reservoir.

T he system of banking rests upon a basis of trust. Innumerable acts of trust build up the

system of which bankers, depositors and borrowers are parts. They all agree to behave in

certain predictable ways in relation to each other, and in relation to the rapid fluctuations of

credit and debit. Consequently, business can be done and cheques can be written without any

legal tender visibly changing hands.

Source: Tom Mc Arthur, A Rapid Course in English for students of Economics, Oxford University Press, 1973

Answer the following questions

1. How are all values in the economic system measured?

2. What backs the US dollar?

3. How are national currencies judged nowadays?

4. Who can issue paper notes?

5. What name is given to arrangements like cheques?

6. What phrase do economists use for the value of money?

7. What is inflation?

8. In what way do banks co-operate with governments?

9. What does the customer agree to do when he opens a deposit account?

10. How does the bank make its main profit?

11. Why do financiers often talk of the ‘liquidity’ of money?

12. Whose trust for each other maintains the banking system?

13. What does this trust permit?

2.1

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According to text A, which of the following sentences are true (T) or false (F).Correct the false information

Read text B and do exercises 2.3, 2.4, 2.5. The suggested time for reading thetext and completing the exercises is 40 minutes.

HOME AND OFFICE BANKING SYSTEM

2.2

Questions T/F

1. The US dollar is a constant store of value.

2. Instruments of credit are accepted because they can be converted easily intosubstitute money.

3. The purchasing power of money depends upon supply and demand.

4. The demand for money is related to the rapidity with which business is done.

5. You can earn interest on a current account.

6. Banks lend money to depositors who need capital.

7. The main profits of a bank come from lending money at a fixed rate of interest.

8. Money is described as ‘liquid’ because it is compared to flowing water.

9. Legal tender must change hangs when we do business and we must see it change .

The banking service for busy

people

P ay bills before breakfast...invest over lunch... and

check balances at bedtime.HOBS is the essential bankingservice for busy people. It allowsyou to carry out transactionsfrom your home or office whenit suits you. You can check thebalances of all your accountswith Bank of Scotland whetherthey are business accounts orpersonal accounts; view yourlast 600 transactions on-screen;transfer between your ac-counts; pay regular bills andeven keep a record of them;

order a statement or a chequebook and for business users,our special Cash ManagementService enables you to see whatyour cleared balances are, up to2 days ahead.

All these services can be easilyaccessed using our compactintegral keyboard and screen

which can be purchased for asingle payment of only £95,with an option of spreading thecost over ten months. However,the unit will be supplied free ofcharge to customers who un-dertake to keep a minimumcredit balance of £500 in theirCurrent Account for at least

two years. As the unit only takesup approximately the same spaceas an A4 sheet of paper, it caneasily be accommodated on adesk or table. Alternatively,HOBS can be linked to yourPC. In addition, no matterwhere you live in the UK youcan access HOBS for the costof a local telephone call.

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Settle bills when it suits you

Regular bills and accountscan be paid by electronic

transfer without writing cheques,saving you time and postage.And our Bank charge for anelectronic payment is muchless than for a cheque.

HOBS even has a memory,which allows you to instructpayment of regular householdaccounts or invoices up to 30days in advance, freeing yourmoney to work for you. Youcan pay invoices, utility billsand many others. Because thetransaction is made on the dayyou want it, you can keep thefunds earning interest until thevery last moment.

High interest daily

The special high interestHOBS Investment Account

is designed for busy people whowant to make the most of theirmoney. It allows you to organizeyour finances so that you can earn high interest without

locking your money away.

At the touch of a button, youcan switch funds from yourcurrent account into yourHOBS Investment Account.Interest is calculated daily, soyou always get the benefit of ahealthy balance, even on funds

deposited overnight.

All instructions made before 5pm on any business day arecarried out that day. After 5pm, they are effective on thenext business day.

Open 18 hours a day

HOBS opens for businessat 7 am – so much for

banking hours! Now you canorganize your personal financesbefore you set off for work andkeep tighter control of yourbusiness bank accounts fromyour office at any timethroughout the day.

With HOBS, you can bankuntil 1 o’clock in the morningduring the week, and you canbank all day Saturday and Sun-day until 11 pm.

Look ahead with HOBS

Old-fashioned bankingdeals with what hap-

pened yesterday. HOBS tellsyou where you stand today andhelps you plan ahead.

You can also call on Bank ofScotland’s expertise for adviceon all aspects of finance.

Bank of Scotland offers all thebanking services you need asan individual or as a business-man and HOBS is the sevenday link to a full clearing bankservice, wherever you are inthe UK.

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2.3 According to text B, which of the following sentences are true (T) or false (F)

Questions T/F

1. HOBS can be used by both business people and private individuals.

2. You can only use HOBS if you have a personal computer.

3. £500 is the minimum required to open a HOBS account.

4. HOBS is only available to residents of Scotland.

5. Making a payment with the HOBS system is more expensive than paying bycheque.

6. HOBS can be programmed to pay your bills automatically.

7. There is more than one type of HOBS account.

8. HOBS is open everyday from 7 a.m. to 1 a.m.

Source: Michael Lannon, Graham Tullis, Tonya Trappe, ‘Insights Into Business’, Longman, 1996.

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Look at the following statements about the HOBS system and put a cross (X)against those which do not appear in the text.

1. If you use HOBS you will be given an identity number and a password.

2. You can make ten monthly payments to cover the cost of buying HOBS.

3. The Bank of Scotland charges customers £10 a month for using HOBS.

4. If you want to take advantage of the Cash Management Service this will cost you extra.

5. You can arrange for The Bank of Scotland to give you a personal demonstration of howHOBS works.

6. The HOBS terminal can fit into a small place.

Read through the text again and make a list of the 10 advantages for the cus-tomer of using the HOBS system

With HOBS the customers can:

1. have instant access to an account.

2. ………………………………..

Listening 1

You are now going to hear part of a lecture, divided into short sections to help you to understand it. Listen to the lecture TWICE. As you listen, answer thequestions below.

Section 11. What topic is the lecturer going to introduce?

………………………………………………………..

2. What is the point of the story?

………………………………………………………..

3. Who were the original bankers?

………………………………………………………...

Section21. Note down the first development.

………………………………………………………..

2. What is the modern word for the ‘letter’ the lecturer talks about?

………………………………………………………..

3. Note down the second development.

………………………………………………………..

Section 3Are these statements correct or incorrect?

1. The goldsmith did not charge the firm interest.

2. The goldsmith expected everyone to want their gold at the same time.

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2.4

2.5

3.1

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Section 4

Table: Goldsmiths as Bankers

Is this statement correct or incorrect?

Once the goldsmith had made his loan, his liabilities were greater than his assets.

Section 5

1. What would we call a deposit today?

2. Is this statement correct or incorrect?

Whether the loan was in gold or as a deposit made no different to the goldsmith.

Section 6

1. Note down what the lecturer means by ‘reserves’.

2. What is the goldsmith’s reserve ratio after making the loan?

Section 7

1. The lecturer says people rushed to the goldsmith to get their gold. What term does he useto describe this rush?

2. What is the result of a financial panic?

Listening 2

Listening to the first part of the lecture again and fill ONE word in each blank bellow

3.2

ASSETS LIABILITIES

(1) Old-fashioned goldsmith

(2) Gold lender

(3) Deposit lender: Step 1

(4) Step 2

Gold £ 100

Gold £90 + loan £10



Deposits £100

Deposits £100

Deposits £100

Deposits £100

Now two (1)......................... turned these goldsmiths into bankers. The firstwas that people (2)......................... it a lot easier to give the seller a letterthan it was to (3)......................... some gold and then physically hand itover to him. This letter (4)......................... some of the gold they had at thegoldsmith’s to the seller. This letter we would nowadays call a (5)......................... . And of courseonce these letters, or cheques, were easier to carry (6)......................... thangold, and a lot less dangerous, people started to say that their money(7)......................... were what they had with them plus their deposits. So asystem of deposits was started. The second (8)........................., and I’msure you can see what’s coming, was that goldsmiths realized they had agreat deal of unused gold lying in their (9)......................... doing nothing.This development was (10)................................ of greater importance than the first.

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4.1

Read the following passage and do the vocabulary exercises below. The sug-gested time for doing these exercises is 30 minutes

Account opening forms On the National Bank of Mantra company account opening form the customers are asked towrite whether they are sole traders, partnership or limited companies. This information isnecessary for the banks. In the case of a sole trader, there is no formality but the bank mightwant a reference.

The form also request the same details as those found on a personal account opening form butwith many additional items. All this information is useful for the bank. But it is supplied ona completely voluntary basic by customers.

The banks uses the account opening form to do market research. For example, they ask prospective account holdersto say why they came to the National Bank of Mantra. Theyask for details of the personal assets and liabilities of the directors and the names and addresses of their accountantsand solicitors and how long they have been in business. Thisinformation is requested but references on the directors aresometimes required.

The forms are divided into four sections:1) Details of the business, which include its address, legal status (whether it is a private

limited company or a public limited company), its activities, connected companies, number of employees and how they are paid, the addresses of its solicitors, accountantsand present bankers);

2) Personal details of the owners (for non-limited companies, called the proprietors, and forlimited companies called the directors) as for a personal account opening form, includingassets such as house ownership and liabilities such as mortgages.

3) Customer requirements include what services the new business account holder wants. Thebank uses this opportunities to get details of property and valuables so that it can thenoffer to insure them. The bank also asks what kind of cherub book the customer wants, thetypes of account and frequency of statements of account;

4) A signed declaration by the owners, who agree to be severally and jointly liable for thedebts of the company. This means they are responsible both as individuals and as a groupfor any debt to the bank when it lends the company money.

Mark the following with A or L to show whether they are assets or liabilities

1. a house

2. a car

3. a bank loan

4. a mortgage

5. an insurance policy

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Look carefully at each paragraph of the reading passage to find words whichmean the opposite of

a) closing (paragraph 1) b) joint c) offer (paragraph 2)

d) different e) assets f) few

g) obligatory h) former i) always (paragraph 3)

j) private (paragraph 3) k) community (paragraph 7) l) borrows

Read the passage about account opening forms again and then, without lookingback, add nouns to the following adjectives to form noun phrases

a) national b) different c) sole d) limited e) the same f) personal

g) additional h) more i) prospective j) legal k) private l) public

Now look back at the passage and see how many of your phrases match those in the readingpassage.

Based on the information in the two texts above, answer the following questionsin your own words

1. Now that you have considered the benefits that HOBS offers its customers, discuss what,in your opinion, the Bank of Scotland can gain from the introduction of its new system.

2. Are there any similar services to HOBS available in your country? Who provides themand how do they operate?

Role Play

Inquiring a bank loan

Work in pairs (Student A and Student B). Student A and student B should look at the information for each of them to understand carefully their role before starting therole play

Student AYou wish to deposit £30,000 with a bank and have been advised that the Lombard Bank provides very favorable conditions to investors. You have obtained a leaflet about theirservices, but you require further details before deciding inwhich account (s) to invest your money. You have there forearranged to meet a representative of the bank (Student B) who will answer any enquiries that you have. Your saving requirements are as follows:

You wish to set aside a sum of money for your three children,to be divided amongst them on their eighteenth birthdays. Their present ages 10, 12, and 14.

You wish also like to set aside an amount for use in emergencies, for example to carry out anyunexpected repairs to your house, to pay medical bills etc.

4.2

4.3

5.1

5.2

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Total = £30,000

Study the above leaflet carefully and draw up a list of questions that you will need to ask.

The following guidelines show the sort of information you should obtain.

Minimum/Maximum opening deposits

Interest rates

Dates of interest payments

Restrictions on withdrawing money

Useful language:

Asking for general information

Could you tell me more about …

I’d like some further information on …

Asking for more detailed information

How much interest would I earn if I opened a 3-month notice deposit account?

Would I be able to withdraw funds at short notice from a fixed deposit account?

How often would I be paid interest with a cherub savings account?

When you have finished preparing your questions, you should meet up with student B.

Make notes on the answers you receive and decide how you are going to invest your

money.


Lombard Bank

Information for savers and investors

Note deposit for savers and investors

A flexible account that offers you easy access toyour funds, with deposit periods of 14 days, 3months and 6 months with no maximum limit tofunds deposited.

Fixed Deposit Accounts

The ideal deposit account for those wishing to invest in the longer term with deposit periods ranging from 1 to 5 years. Interest is fixed and guaranteed notto change during the deposit period selected.

Cheque Savings Account

A special kind of deposit account which is particularly suitable for those customers who want their savings readily available whilst earning a good rateof interest. A cherub book is supplied and provides the benefits of instant ac-cess to your funds. Whatever your choice you can be assured that a Lombard deposit account will be a secure and confidential home for your money.

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Student B You work for the Lombard Bank and have an appointment with aprospective client (Student A) who would like to deposit somemoney with your bank. The bank offers three different types of account, details of which are given below. Study this informationand be prepared to answer Student A’s questions and to give advice about which account (s) would best suit his or her saving requirements. In particular you should be ready to answer ques-tions about the following:

• Minimum/Maximum opening deposits

• Interest rates

• Dates of interest payments

• Restrictions on withdrawing money

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Type of accountDeposit

Min. Max

Interest rates

per annualInterest payments

Notice Deposit

3 months

6 months

14 days

1000 -

1000 -

5000 -

8.75 (5.75*)

9.0 (6.0*)

9.25 (6.375*)

every 6 months

every 6 months

every 3 months

Note: *indicates interest rates payable when the balance is less than the minimum deposit.

Type of account

Gross Rate % p.a. – interest paid annually

Amount of deposit£1,000 - £25,000 - £50,000 - £24,999 £49,999 £250,000

Fixed deposit

1 year fixed deposit





9.00

9.00

9.25

9.25

9.25

9.125

9.125

9.375

9.375

9.375

9.25

9.25

9.50

9.50

9.50

Type of account

Cheque Savings Account Interest paid

When the balance is £1,000 to £4,999

When the balance is £5,000 and above

3.75

6.00

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Note Deposit Account

This account exists in three forms (3months, 6 months and 14 days) depending on the periodof notice. The rates of interest payments can be made directly to the client or added to the sumin his or her notice deposit account to earn further interest. Additional deposits can be madewithout restriction.

Fixed Deposit Account

With this type of account funds are deposited for a fixed period of 1 to 5 years and earn interested at a fixed rate which is guaranteed not to change. The client can choose whetherthe interested is paid monthly, every three months, every six months or yearly. Interest canbe paid directly to the client or added to the sum in the fixed term account. The client is notallowed to make withdrawals before the end of the fixed period of deposit. The minimumopening deposit is £1000 with a maximum limit of £250,000.

Cheque Savings Account

This is an account for customers who want easy and instant access to their money while continuing to earn interest. Interest is paid every three months and customers are supplied witha cheque book which can be used without restriction. Customers may withdraw up to £1000in cash per day but are not allowed to become overdrawn. Statements are sent every 6 months.

Suggestion:

You should organize your letter in three different parts

1. An introduction, in which you should identify yourself and give the reason(s) for writing.

2. The main body of the letter, where you explain the problem and give a short history ofhow it arose.

3. A concluding paragraph, saying what action you are expecting as a result of your letter.

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Last month you received your bank statement and noticed that your accountwas overdrawn. After phoning your bank, they informed you that they had mistakenly transferred £500 from your main account into your second account,instead of vice versa. The bank apologized for the error and promised that therewould be no overdraft charges. However, you have just received your latestbank statement, on which a £30 overdraft charge appears. You have phonedyour bank again to complain and they have advised you to confirm your complaint in writing. Write a short letter to your branch manager in which youstate what your complaint is and how you want the bank to correct the mistake.

The address of your bank is:

National Savings Bank

509 Wellington Street

London SW1V 9AW

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English terms Vietnamese equivalents

A

- A run on the bank (n)

B

- Balance (n)

- (Bank) statement (n)

C

- Cheque book (n)

- Clearing bank service (n)

D

- Debit card (n)

- Deposit (n)

F

- Financial panic(n)

G

- Goldsmith (n)

- Gold bullion (n)

J

- Jewellery (n)

I

- Intermediary (n)

R

- Reserve ratio (n)

- Reservoir (n)

T

- To go bankrupt

V

- Vault (n)

O

- Overdraft (n)

- Đòi rút tiền ồ ạt ở ngân hàng

- Số dư tài khoản

- Sao kê tài khoản

- Sổ séc

- Dịch vụ thanh toán

- Thẻ ghi nợ

- Tiền gửi tại ngân hàng

- Sự hoang mang về tài chính

- Thợ vàng

- Nén vàng, thoi vàng

- Đồ kim hoàn

- Trung gian

- Tỷ lệ dự trữ

- Bể chứa

- Bị phá sản

- Hầm/Rương/Hòm

- Vay thấu chi

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10 eng104-bai 6-v1.0

Education