Malaysian Banking Law – Statutory Definitions of “Bank” and “Banker”

Malaysian Banking Law – Statutory Definitions of “Bank” and “Banker”
General Overview
There is no single complete statutory definition of the terms “bank” or “banker” in the United Kingdom. Different statutes use these expressions for specific legal purposes, but many do not provide a full explanation of what banking business actually means. Instead, statutes usually identify certain institutions that are recognised as banks under the relevant legislation.
This demonstrates that the legal meaning of “bank” and “banker” often depends on the context and purpose of the particular statute. As banking activities continue to evolve, legislatures have preferred to adopt flexible and functional approaches rather than one rigid definition.

Statutory Definitions Under English Law
1. Bills of Exchange Act 1882
Section 2 of the Bills of Exchange Act 1882 provides:
“Banker includes a body of persons whether incorporated or not who carry on the business of banking.”
This provision does not comprehensively define banking business. However, it recognises that:

A banker may be incorporated or unincorporated,
Banking may be carried out by individuals, partnerships, or corporations,
The important factor is carrying on the business of banking.

The statute therefore focuses more on the existence of banking activities rather than explaining the precise meaning of banking.

2. Bankers’ Books Evidence Act 1879
Section 9(1) of the Bankers’ Books Evidence Act 1879 defines “bank” and “banker” to include:

Institutions authorised under the Banking Act 1987,
Municipal banks,
The National Savings Bank,
The Post Office when exercising banking powers.

This provision adopts an institutional approach by identifying recognised banking institutions for evidential purposes under the Act.

3. Agricultural Credits Act 1928
Section 5(7) of the Agricultural Credits Act 1928 states that “bank” includes:

The Bank of England,
Institutions authorised under the Banking Act 1987,
The Post Office providing banking services.

Again, the statute identifies recognised financial institutions rather than providing a detailed legal definition of banking.

4. Solicitors Act 1974
Section 87(1) of the Solicitors Act 1974 provides that “bank” includes:

The Bank of England,
The Post Office when exercising banking powers,
Institutions authorised under the Banking Act 1987.

The purpose of this definition is mainly regulatory and administrative.

Other Statutes Referring to Bankers
Several additional English statutes refer to banks and bankers, including:

Companies Act 1985
Insolvency Act 1986
Building Societies Act 1986
Financial Services Act 1986

These statutes generally refer to authorised banking institutions under the Banking Act 1987 instead of providing independent definitions of banking business.

Note Form – Statutory Definitions
Important Principle

No single exhaustive statutory definition of “bank” or “banker” exists in English law.
Definitions differ according to the purpose of each statute.

Bills of Exchange Act 1882

Banker includes incorporated or unincorporated bodies.
Focuses on carrying on banking business.

Bankers’ Books Evidence Act 1879
Includes:

Authorised institutions,
Municipal banks,
National Savings Bank,
Post Office banking services.

Agricultural Credits Act 1928
Includes:

Bank of England,
Authorised banking institutions,
Post Office banking services.

Solicitors Act 1974
Defines bank as including:

Bank of England,
Post Office banking services,
Authorised institutions.

Other Relevant Statutes

Companies Act 1985.
Insolvency Act 1986.
Building Societies Act 1986.
Financial Services Act 1986.

Importance of Statutory Definitions
Statutory definitions are important because they:

Determine which institutions fall within banking regulation,
Clarify which entities enjoy legal protections and privileges,
Identify institutions subject to financial supervision and compliance obligations.

However, many statutory definitions focus more on recognising authorised institutions than defining the actual nature of banking business itself.

Application in a Case Scenario
Scenario
DigitalPay Ltd provides online payment services and accepts customer funds through digital accounts. The company argues that it should legally qualify as a bank because it performs banking-like activities.
A dispute arises regarding whether DigitalPay Ltd falls within statutory banking definitions. Regulators may examine:

Whether the company is authorised under banking legislation,
Whether it falls within statutory definitions under relevant Acts,
Whether it genuinely carries on banking business.

This scenario illustrates the importance of statutory recognition and licensing in determining banking status.

Critical Analysis
The statutory definitions found in English legislation mainly adopt an institutional approach rather than a functional approach. Most statutes identify recognised banking institutions instead of explaining the true legal characteristics of banking business.
This approach provides flexibility because Parliament may recognise different institutions for different legal purposes. However, it also creates uncertainty because there is no universal statutory definition applicable to all situations.
Modern financial technology creates additional challenges. Many digital financial companies provide banking-like services without clearly fitting within traditional statutory categories. This raises legal and regulatory issues concerning:

Consumer protection,
Licensing,
Financial supervision,
Legal classification of financial institutions.

As financial systems continue to evolve, statutory definitions may require further reform to address digital banking and modern payment systems.

Unresolved Issues
Lack of Uniform Definition
Different statutes define “bank” and “banker” differently, leading to inconsistency and legal uncertainty.

Digital Financial Technology
Modern financial platforms may carry out banking activities without fitting neatly into traditional statutory definitions.

Regulatory Classification
Authorities continue to face difficulties in deciding whether modern financial service providers should legally be classified as banks.

Conclusion
English statutory law does not provide a single comprehensive definition of “bank” or “banker.” Instead, different statutes recognise particular institutions as banks for specific legal purposes. Statutes such as the Bills of Exchange Act 1882, Bankers’ Books Evidence Act 1879, Agricultural Credits Act 1928, and Solicitors Act 1974 demonstrate that statutory definitions depend largely on legislative context and purpose. While this flexible approach allows the law to adapt to changing financial systems, it also creates continuing legal and regulatory challenges in modern banking law.

References (APA 7th Edition)
Bills of Exchange Act 1882 (UK).
Bankers’ Books Evidence Act 1879 (UK).
Agricultural Credits Act 1928 (UK).
Solicitors Act 1974 (UK).
Companies Act 1985 (UK).
Insolvency Act 1986 (UK).
Building Societies Act 1986 (UK).
Financial Services Act 1986 (UK).
Halsbury’s Laws of England.
Paget’s Law of Banking.

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Malaysian Banking Law – Statutory Definitions of “Bank” and “Banker”

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