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Banking functions 

1 Operating current accounts 

An important job for a commercial bank is to make sure that money is 

transferred swiftly and correctly from one current account to another. The 

bank's job operating current accounts is vital to the functions of the whole 

economy. This involves keeping a careful record of the payments a custom-

mer makes and the money received. A customer is given full written details 

of these transactions in a statement of account. Statements are normally 

issued every month, but they can be provided every day if necessary. 

Transfers of money from one current account to another usually take 

place as a result of the instructions contained in a cheque. But this is not 

always the case banks can provide a service which transfers money from one 

current account to another, automatically. This system of standing orders 

enables the banks to make regular payments out of a current account to pay for 

such regular and fixed amount payments as rent, life assurance premiums and 

subscriptions to clubs. For example a subscription to the AA (Automobile 

Association) could be paid annually by standing order. Although this system 

 

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has been useful, it is now being replaced in many cases by the system known 

as direct debit. This is very similar to a standing order, but it enables a person 

to make regular payments of a varying amount. This system has proved to be 

particularly useful in times of high inflation when, for example, club 

subscriptions, rent and premiums have all been rising.