One of the first decisions of the new Supreme Court (which last month replaced the House of Lords as the highest court in the land) will be a disappointment to many bank customers who suffered high levels of charges after they exceeded agreed overdraft limits.

The Court accepted the banks’ argument that the British tradition of free ‘in credit’ banking (rare elsewhere in the world) was only possible because of charges levied on those who go overdrawn.

The decision does not preclude the possibility that the Office of Fair Trading could challenge the fairness of other aspects of bank charges, but it does mean that tens of thousands of customers who had pending applications for refunds of charges will not now receive them.

For private customers who do not go overdrawn on their current accounts, the decision may well mean that free banking will continue.

Earlier this month, the banks announced a plan to phase out cheques: they already charge business customers up to 65p more for writing a cheque than paying a bill electronically.