SKELETON ARGUMENT

Skeleton Argument

Skeleton Argument

Introduction

Mr. Green and Ms Slow are the two directors as well as the shareholders in Cheadle Royal Ace Properties Limited. The core business of the company is based on property development and letting. Major dealing of the company is associated with Boomerbust Bank Plc. Company is having two accounts in the bank. One is simply the business current account, while the other is RCF that help Mr. Green for letting purpose. Despite of the facility given by the bank, it was agreed that bank would not deal with the balance of the company without the permission of Mr. Green.

Discussion

Bank or banking system refers to the set of institutions that enable the development of all transactions between individuals, companies and organizations that involve in the use of money. Within the banking system one can distinguish between public and private banks which in turn reflect the nature of banks which can be commercial, industrial or mixed business. The private commercial banks are primarily concerned with providing loans to private individuals. Industrial or business banks invest its assets in industries. Mixed private banking combines both types of activities. In the nineteenth century industrial banks were very common although they have been losing strength during the twentieth century in favor of mixed banking. However, the public banks issue is responsible for issuing currency to private banks thus central bank has got the monopoly on printing money which belong to the State. The main role of a bank is to keep external funds on deposit as well as to provide safe transactions denominated liabilities. For the protection of these funds banks charge a number of committees which also apply to the various services that modern banks offer to their customers, these services include more competitive framework: credit cards, overdraft, telephone bank, among others (Akhigbe, 2002: 307-26).

There is no country in this world that is without banks due to its importance. Bank performs an intermediary role. First of receiving money from savers and on the other hand lend it to individuals and companies to assist in the growth of the economy of a country. In addition through the banking system payments operates in the country through checking accounts, credit cards and money orders, among others. Suffice it to mention that in England 90% of all transactions that take place in the economy are made through banks. There are many reasons why a firm or company in need of a loan or a loan. But some of them have such needs may arise quite often, so in these cases it is easier to conclude a contract with the bank to open a credit line. Today, the bank can provide your choice of two types of loan products: renewable and non-revolving credit line (Altunbas, 2001: 1931-55).

Non-renewable line of credit gives you the opportunity to obtain loan installments (tranches). This means that you can make a request to the bank to get money for basic necessities; such an option is suitable for lending to ...