UNIT 4:  FINANCE FOR BUSINESS

Task: 1

Financial institutions and their role within the UK Economy

High Street Banks 

        

These organisations can be seen on the most high streets. Their purpose is to supply a financial service to both the public and business organisations.

Banks are public limited companies with their shares quoted on the stock exchange. Their aim is to make profit which will be distributed to their shareholders. Banks play a very important role in our lives. Banks help us in buying houses and the nice, expensive cars we drive, without banks it would be very difficult to buy and live in expensive houses.

Banks provide financial services to people and businesses. For example if we think about starting up a business, we will need banks financial support if we haven’t got the full amount of money. They provide services for the convenient and safe flow of money in the economy. Their role in the economy today is to provide customers with full range of products and services which include: current accounts, deposit accounts, standing orders and direct debits, overdrafts, insurance, loans, mortgages, debits and credits cards and much more.  We use these banks facilities in our daily lives, for example to withdraw money when needed or to deposit money to save money in the bank. Banks bring together people who want to save money and people who want to borrow money.

Recent News about HSBC

HSBC has become the first major UK bank to offer mortgages that comply with Islamic law. 

Under Islamic law, the receipt and payment of interest is forbidden.

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As a result some of Britain's two million Muslims have chosen not to take out conventional mortgages or open bank accounts.

This can leave them having to pay in cash for large purchases, such as houses.

Lease back 

Under the HSBC scheme, the bank buys the property and leases it back to the customer over an agreed term.

The customer makes monthly payments made up of rent and contributions towards the purchase price.

HSBC owns the property until customers have made their final payment.

Crucially, at no stage is the customer paying interest - the ...

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