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Bank, commercial


A modern term for the joint stock bank, though the latter is still officially the name of those banking companics that deal with the general public and have branches in High Streets everywhere. At one time there were many joint stock considerably through amalgamation and there are now four major banking companics - Lloyds, Barclays, Midland and NatWest. Others not quite so prominent. though enjoying a sizeable portion of the banking business, include the Royal Bank of Scotland, Coutts (a subsidiary of NatWcst), the Trustee Savings Bank. the Co-op in England and Wales and certain Scottish and Irish banks. Branches of major foreign banks also operate in Britain as commercial banks.

The developing banking world gradually divided into two major parts, the public and the private. The former category. which now comprises the commercial banks, became limited companies, and conccrned itself with offering a deposit and transfer service to the general public (which could include both individuals and trading or industrial entities). The latter tended to retain the format of partnerships and grew into the many merchant banks and/or discount houses that deal almost exclusively with industrial finance and foreign trade.

At one time many, or most, of the commcrcial banks issued their own bank notes. but since the Bank Charter Act 1844 this privilege has been gradually restricted to the Bank of England and to a lesser extent the Scottish and Irish banks, cheques are particularly associated with the commercial banks and are the means by which they conduct most of their dealings, though the increasing adaptation of computer technology by the banks indiapid movement towards even swifter the results of daily cheque transactions by thc results of daily cheque transactions by transfers, most of which are handled transfers, most of which are handled through the Bankers' Clearing House, which arranges settlement by transfer between the accounts kept by individual banks at the Bank of England.


Reference: The Penguin Business Dictionary, 3rd edt.