The applicability of services offered by foreign clearing banks to the local environment

Abstract

This study deals with banking services provided by foreign clearing banks, which are not offered by the local commercial banks. Emphasis has been placed on services provided by U.K. clearing banks and which are relevant to the local environment. These services have been categorized into two sections. Section A deals with personal services such as the provision of life assurance policies, brokerage facilities, investment advice and telephone banking. Section B deals with corporate services. The most important ones are leasing, factoring, venture capital and medium term lending. For each service, the following approach has been adopted: i) Each service has been briefly described by referring to the U.K. clearing banks. The advantages and disadvantages of each service were highlighted both from the customer's and the banker's points of view. ii) The constraints encountered by the local commercial banks were then pointed out. These include the interest strait-jacket, government intervention and the lack of education on the part of the potential customer. iii) Finally, recommendations were made as to how each service can be provided and marketed by the local commercial banks, taking heed of the constraints encountered.