Malaysian Banking Law: Is Cheque Handling Essential? (Linked Case Law)


👉 NO — cheque handling is NOT essential to be a banker



1. Traditional View (Older Position)


From:

• United Dominions Trust Ltd v Kirkwood

👉 Suggested bankers usually:

• Pay cheques

• Collect cheques

• Maintain accounts

✔ This created the impression that cheques are essential




2. BUT This View Was Rejected (Important Cases)


Key Case: No Need for Cheques


From:

• R v Industrial Disputes Tribunal, ex parte East Anglian Trustee Savings Bank

👉 The court held:
✔ A bank can still be a banker
❌ Even if it does NOT issue cheque books

3. Supporting Cases (Flexible Approach)


Also supported by:

• Re Bottomgate Industrial Co-operative Society

• State Savings Bank of Victoria, Commissioners v Permewan, Wright & Co Ltd

👉 These cases show:
✔ Cheques are NOT essential
✔ Methods of banking can vary



4. Why courts say cheques are not necessary (Simple explanation)

👉 Because banking evolves


Today:

• Online transfers

• Mobile payments

• Digital banking

👉 Replace cheques


So courts focus on:
✔ Function (handling money)
NOT
❌ Form (cheques specifically)

5. Link to Malaysian Law

Under:

• Financial Services Act 2013

👉 “Paying and collecting cheques” is mentioned

BUT

👉 Courts interpret this flexibly


✔ Includes modern payment systems

6.
Although earlier cases such as United Dominions Trust v Kirkwood identified cheque handling as a characteristic of banking, later cases such as R v Industrial Disputes Tribunal, ex parte East Anglian Trustee Savings Bank established that cheque facilities are not essential. The courts now adopt a functional approach, recognising modern payment methods as substitutes



7. Final Rule 


Cheque handling is not an essential requirement of banking; what matters is the institution’s role in managing customer funds and facilitating payments, whether through traditional or modern means.