NATURE OF RETAIL BANKING IN THE UK
 

The traditional business of banking involves taking in deposits, which are then packed and on-lent as loans. Retail banking refers to the large-volume, low-value end of this business, where deposits are typically attracted from individuals and small business and loans are made to the same groups. Retail banks in UK have some features like small number of banks with extensive branches network, cash ratio is above minimum i.e. there is more cash availability, high degree of leverage/credit creation in terms of given out loans and also the bulk of their business transaction is done in pound sterling. Actually it is very difficult to distinguish between Retail and wholesale banks in the UK as many of the banks operating in the Retail markets also operates, to some degree, in the wholesale markets. To operate as a bank in the UK a firm must be authorised by the financial services authority (FSA) [UP TILL June 1998, The Bank Of England] as able to accept deposits in the UK. Once authorised, a bank’s depositors are then protected under the UK deposits protection scheme and the bank is require to place 0.15% of its eligible sterling liabilities in a non- interest-bearing account at the Bank Of England.
. This has a little relevance to any prudential assessment of the bank and is in effect a tax on banks, which is used to finance the various activities of the Bank Of England.

List of Retail Banks | Bank of England | BBC | Jokec