A first and fundamental step in the Bank's transition away from its origins as a savings bank was taken with the introduction of a cheque book facility in July 1967 - the Bank's first product that was not passbook based. In the 1960s, the horizons of the Bank's typical customer were widening, and this, combined with a general growing level of prosperity, resulted in a demand for money transmission services. Historically, a cheque book facility was the preserve of a privileged minority - a current account only being opened by a joint stock bank with an introduction, or a good reference, in order to establish that a customer was of good standing; the customer's standing and financial position were seen as essential tests for someone who would be given a facility to pay sums to a third party, without direct reference to the account's balance or overdraft limit. However, as the Bank had no authority to grant loans (other than by way of mortgage), there was to be no question of overdrafts. The Bank's current account facility was to provide a basic money transmission service, but was to prove the basis for its development into a full-service bank within ten years.

The BMB not being a clearing bank, meant that arrangements were made with the Midland Bank in New Street, Birmingham (with whom the Bank had a long-standing association) to act as clearing agent for the customers' cheques. This arrangement resulted in the decision that the administration of the current account facility would be most efficiently handled in a centralised department, at the Bank's Broad Street Head Office. This department was located on the east side of the ground floor of the building. The Bank's Assistant General Manager, Mr C H Massey, was given overall responsibility for overseeing the project. He arranged for the appointment of Mr F M Thompson (see below) to set up the new department, with Mr H T K Haslam as his assistant. They were assisted by Sheila Turner and Sue Bishop.

Amongst the many tasks that required to be completed prior to the department coming into operation, was the design and printing of cheques, Banker's Drafts, and other documentation. The resultant design was as shown:

Although the Bank, and its Broad Street address, is prominently displayed, the sort code at the top-right (40-11-18) is for the Midland Bank, New Street - a note at the bottom-left confirms that this branch is the clearing agent. The sort code, 77-85-00, also printed on the cheque relates to the BMB's Administration Department (ie the Bank's Head Office Accounts Department - responsible for reconciling the transfer of funds between the BMB and Midland Bank). The Optical Read Characters forming the bottom line of the cheque show: the individual cheque number; the Midland Bank's sort code; and the BMB's account number at Midland Bank, New Street. The other number (36-0XXXXX4-60) is the BMB customer's account number - 36 indicating that the account is that of a customer at Northfield branch. The customer name(s) appears below the amount 'box'. (See also Early BMB Cheque Book, which details how Cheque Accounts were numbered prior to computerisation).

Preparations for the setting up of the department included designing an accounting system. The system selected was based on the use of National Cash Register (NCR) machines that would post the daily transactions to customer accounts in two separate runs: one run updating the customer's ledger card; the other updating the customer's statement.

All these preparations came into fruition when branches began taking applications from their customers to open a cheque book account. The application form, completed by customers who the branch was satisfied as being suitable to have a cheque book (ie was an established depositor), was forwarded to the Current Account Department (CAD). From the details supplied on the form, CAD opened an account, and issued a temporary cheque book (10 cheques) that was identified to the customer by account number only. This cheque book was sent to the customer's branch for collection, whilst a fully-printed cheque book (30 cheques) was ordered from the printers. This system enabled customers to use their account within three or four days of them making an application.

Deposits to individual current accounts made at branch level were summarised by the branch and the daily total advised to the Bank's Accounts Department. The individual deposits slips were forwarded to CAD for posting to the ledger accounts, and reconciliation was then made between the Accounts Department and CAD.

Cheques drawn by customers, and subsequently processed through the clearing system, arrived daily at Midland Bank, New Street. Midland Bank would telephone when the cheques were ready for collection (usually around 11am), and a member of staff would be despatched to New Street to collect the bundle of cheques. Early collection of the cheques would enable a prompt start to be made on the posting run to debit customer accounts. This was particularly relevant on Wednesdays, the peak day for numbers of cheques, resulting from the high volumes that had been drawn by customers on the prior Saturday's shopping expeditions. Wednesday's high volumes routinely resulted in staff working overtime to 7pm on that day.

On receipt of the cheques in Current Accounts Department, they would be initially sorted into account number order by branch, and the relevant ledger cards and statement sheets for those accounts extracted from the files. The cheques/cards/statements would then be divided into bundles for splitting amongst the machine operators who would be posting the transactions. Prior to the posting commencing, the document details would be called between two members of staff to ensure that the correct account was being debited.

All cheques were scrutinised to ensure that signatures were valid, that none were out of date, that the amount in words agreed with that in written in figures, and that there were no other errors that would cause the cheque to be void. Where it was found that cheques had been drawn by customers with insufficient funds in their cheque account to meet payment, the account holding branch would be contacted to ascertain whether there was an available balance in the customer's deposit account that could utilised to transfer monies to meet payment of the cheque. Cheques that could not be paid because of insufficient funds, errors, etc, were returned to the bank where they were presented, appropriately marked: 'Refer to Drawer', 'Words and Figures Disagree' etc. On completion of the posting runs, the ledger cards and statement sheets were checked by the Department's senior staff against the machine produced duplicate posting sheets. The total of the day's cheques was reconciled to the amount debited by the Midland Bank to the BMB's account with them (number 234400 - see above). The individual customer cheques were filed so that they could be sent out with the relevant half-yearly statement.

The Bank's Annual Report & Statement of Accounts for the Year Ended March 31st 1968 marked the historic innovation of the cheque account facility with two succinct paragraphs:

 

The provision of Current Account facilities as from July 1967 has …. been …. much appreciated.

 

Progress of the Current Account Department was rapid (with the annual total of cheques cleared approaching 750,000 within eight years), as the following figures illustrate:

Year-end	Deposits (£)	Withdrawals (£)	Balance (£)	Accounts (Numbers)	Cheques Cleared (Number)
1968	621,783	464,907	156,876	2,038	23,054
1969	1,514,678	1,388,886	282,668	3,624	68,156
1970	2,473,202	2,346,750	409,120	5,609	128,928
1971	3,681,908	3,485,094	605,934	7,559	178,577
1972	5,670,305	5,426,510	849,729	9,874	265,735
1973	8,271,830	8,009,030	1,112,529	11,930	384,005
1974	10,391,512	10,161,143	1,342,898	14,173	451,247
1975	13,751,861	13,057,378	2,037,381	17,325	551,604
Mar-1976	19,632,552	18,973,552	2,696,381	20,129	715,427
Nov-1976	14,838,561	14,643,016	2,891,926	21,887	n/a
1977	n/a	n/a	4,156,000	28,694	n/a
1978	n/a	n/a	7,143,359	41,398	n/a
1979	n/a	n/a	9,960,000	n/a	n/a

In 1969, the current account facility was enhanced by the introduction of a Cheque Card for the use of approved customers; this guaranteed that the Bank would encash cheques, referenced to the card, up to £30. During these early years of the service, the charge for each cheque paid to a third party was 6d (2½ pence). There was no charge for cheques cashed at the Bank, and an allowance was made against charges if a minimum balance of £50 was kept in the account.

The rapid growth in transactions resulted in the number of staff working in the centralised Current Accounts Department increasing proportionately over a period of about six years. Senior staff who worked in the department during the early period were Terry Cox (who later left to join the TSB in the Irish Republic), Norman Jackson, David Johnson, Derek Horner (who later exported his banking skills to the USA), and Roger Garner. By early 1970, Keith Haslam was the Department's manager - Derek Horner, Roger Garner, Norman Jackson, and David Johnson had all been moved to various branches of the Bank. John Ordish was appointed as Assistant Manager, with Ron Hines and Malcolm Davies also joining the Department.

Other staff that provided valuable support during the life of the Department, and whose contribution was much valued by the senior staff included:
      Judy Barker
      Elaine Busby
      Muriel Caddy
      Linda Dalton
      Ann Dayman
      Maureen Doherty
      Jane Duncombe
      Fay Gilbert
      Mary Gilligan
      Lyn Humphries
      Mary Jones
      Lynne Kettle
      Diane Lewis
      Lynn Logan
      Karen Mayers
      Maria Perrot
      Jane Ridley
      Doreen Roger
      Veronica Sangster
      Ann Slominski
      Sue Speakman
      Sally Spenser
      Mary Taylor
      Val Thomas
      Doreen Whitehouse
      Brian Whitehurst

 

The volumes of business detailed above could only be handled efficiently by a computerised system on a decentralised basis. Over a period of approximately three years ending on March 19th 1976, the whole of the Bank's accounting system was transferred to an on-line-real-time computer system. With the BMB now being a clearing bank, customer's cheques now bore their branch's sort code, and branches took on the full responsibility for operating their own accounts. The centralised Current Accounts Department was closed in 1976.

 

 

 

(This article was written with the assistance of Keith Haslam, who was the Manager of the Current Accounts Department for much of its existence. He was later the Bank's Department Head - Advances, and retired from that position in 1986. Further information and assistance in writing the article was provided by John Ordish and Sheila Turner.)