Payments by Cheque
Depositors' Department

As an alternative to receiving cash, a depositor could request the funds for a withdrawal in the form of a cheque (that came to be known as 'M Account' cheques). These were cheques drawn on the Bank, and were popular for large transactions, such as a car purchase, as they were readily accepted by motor-car dealers and others as the equal of commercial bankers' drafts. The depositor paid a standard fee for the service, and signed an acceptance that the cheque could not be 'stopped' except for reason of loss or theft. At first, all 'M Account' cheques were drawn by Head Office, but the system was later delegated to branches, when they became known as 'B Account' cheques.


It is not known when this facility was introduced, but a report (reproduced below) by the Bank's Finance & General Purposes Sub-Committee, dated February 20th 1939, indicates that the service had then been available for some years.


Your Sub-Committee have considered a report from the General Manager as to the increasing demands by depositors for withdrawals by cheque. During 1938, 4,418 cheques were drawn as compared with 2,052 in 1936 and there has been a growth in the number demanded for trifling sums.


The procedure involved is as follows:

The depositor fills up a form giving particulars of his requirements; the Branch Manager sends the form to Head Office, who draw the cheque and post same to the Branch. The depositor receives the cheque at the counter of the Branch in exchange for a withdrawal receipt. The cost involved is stamp duty, postage and labour, of which only stamp duty is recovered from the depositor.


Your Sub-Committee considers that the facility to make withdrawals by cheque should be continued in respect of substantial amounts, and the cheque drawn in accordance with the wishes of the depositor, but that a charge for the service should be made.


They therefore recommend that cheque withdrawals by depositors in lieu of cash be limited to 20 and over; that a charge of 4d per transaction, including stamp duty and postage, be made; and that depositors should be permitted to have such cheques drawn to their orders.


The acceptance of this report would have set the conditions upon which the service was provided in future years, with the minimum cheque value and the transaction charge increasing as values changed.


No statistics exist for the number of cheques provided under this system, but demand would have increased as more depositors were able to make large purchases (such as for cars), but would eventually be offset with the provision of current accounts (in 1967) enabling customers to draw their own cheques.


The 'M Account' cheques were completed by the staff of the Bank's Accounts Department. Until the 1960s, the cheques were made out by hand - a machine was then introduced that made their production easier, and also provided some security features (eg to make it difficult to alter the amount of the cheque). The Accounts Department was also responsible for reconciling the balance on the 'M Account', ie the value of drawn cheques not yet presented.