Ex.5. Match the method of payment with the definition.

2. CURRENCY AND OTHER FORMS OF EXCHANGE

Ex 1. Read the text

The work of bank is focused on money and financial services. Virtually any actively involving money or advice about financial matters is undertaken by all the commercial banks. The immediate service offered by the bank is the receipt for deposit of coins, notes and cheques and the cashing of cheques, through current accounts. Coins and notes in circulation have the status of "legal lender" that is to say they must be taken in payment of a debt although the extent to which this applies in the case of coins is deliberately restricted for the sake of convenience. The most common means of payment, particularly for sig­nificant sums of money, is the cheque since it is both safer and more convenient than using cash. However, it is not le­gal lender and creditors can refuse to accept it if they wish. Normally both national cheques and traveller's cheques are readily negotiable if the bearer has some means of proving his identity and the creditor can be sure that the cheque will be «honored». To assist the use of cheques, banks now provide their customers with bankers cards which, when used in as­sociation with a cheque, will guarantee it up to a stated maxi­mum. If a customer wishes to make payments of large amounts of money by cheque and is not known to the creditor, then he may obtain a «certified cheque» from his bank. Such a cheque is signed by the bank and therefore payment is guaranteed. Those trading overseas, or in conditions where there may be a significant time lapse between sending out goods and their receipt by the customer, may use a Bill of Exchange as a means of payment. This is really a post dated cheque which assures the creditor payment but also gives the buyer opportunity to inspect the goods before the transaction is completed. Those whose credit standing is unknown may have to get the Bill «accepted» before a creditor will take it. Such a process guar­antees payment and most work of this kind is undertaken by the merchant banks. Because Bills are post dated creditors may have to wait some time for their money. They can over­come this problem by endorsing the Bill and then either dis­counting it with a Discount House or a bank or passing it on to another trader in settlement of a debt of their own. By the time it comes to maturity a Bill may have passed through sev­eral hands and on each occasion it must be endorsed. The commercial banks participate in this activity in two ways: in part by lending money to the discount houses and in part by discounting bills for their own customers.

Ex. 2 Answer the questions on the text:

1. What forms of money are called legal lender?

2. Why are cheques a common form of exchange?

3. What is the main purpose of a banker's card?

4. What is the special feature of a certified cheque?

5. What is the main use of a Bill of Exchange?

6. Why does a Bill sometimes have to be "accepted"?

7. In which two ways might a creditor who needed the money indispose of a Bill?

Vocabulary Exercises

Ex.3 List all the forms of money mentioned in the passage and match them with the following definitions:

1.A bank's unqualified guarantee to pay a specified sum to a specified individual or organization.

1. A negotiable instrument issued only by the Bank of En­gland and signed by the -Chief Cashier of the Bank.

2. A written order to a bank to pay a stated amount of money.

3. A negotiable instrument issued by a bank in exchange for cash and readily usable in most parts of the world.

4. Taken money largely used for small purchases and trans­actions.

5. A written order to a bank to pay a stated amount of money to a stated person or, after endorsement, to the bearer on or within a stated time after a given date.

Ex.4 Say what is true and what is false. Correct the false sentences:

1. Coins and bills of every denomination are called legal lender.

2. Cheques are rarely accepted in lieu of currency.

3. To cash a traveller's cheque the bearer need only present proper identification.

4. Bills of Exchange are not legal lender.

5. A cheque is always guaranteed by a bank.

6. Certified cheques are always guaranteed by a bank.

Ex.5 For each of the following phrases find another one in the text that explains it:

1. A piece of currency made of metal.

2. Unit of the bank note's value.

3.A document in settlement of a large debt guaranteed by the bank.

4.A document which establishes the identity of a person set­tling by cheque.

5. Cashing in a Bill of Exchange before it is due for payment.

6. The bank's readiness to accept a cheque for payment.

Ex.6 Fill in the blanks with proper words or phrases:
bank notes honored bearer identification coins issued currency traveller's cheques

1. While travelling I do not like to carry large amounts of………

2. I prefer to have...... which arc immediately negotiable.

3. Traveller's cheques are ..... in different denominations.

4. To cash the traveller's cheque the.. should present proper identification.

5.However, there are merchants who will not accept traveller's cheques even though you present proper

6.I collect........... of every denomination.

Ex.7 Write sentences of your own:

1. to sign a cheque

2. to accept a cheque

3. to cash a cheque

4. to make payment by cheque

5. to certify a cheque

6. to endorse a cheque

7. to make out a cheque

8. to accept liability for

9. to present your identification document

10. to settle business accounts