RBM Backs Banks on Third Party Cheque Encashment
Malawi’s central bank has backed a move by local commercial banks to suspend encashment of third party cheques; a decision currently on hold after the Malawi Law Society obtained a court injunction Tuesday.
Reserve of Bank of Malawi spokesperson Ralph Tseka told Zodiak Online that the suspension would reduce fraud.
“In as far as elimination of fraud is concerned; enhancement of cheques over the bank counter should be discouraged. It would also help government control fraud and people would be encouraged to open bank accounts,” said Mr. Tseka.
However RBM has faulted the Bankers Association of Malawi for not doing enough to sensitize people about the move hence the resistance.
The association suspended all third party Cheques on April 10, citing massive fraud said to be costing banks about one hundred million kwacha annually.
Meanwhile, the injunction by the Malawi Law Society renders temporary relief to the decision by the country’s commercial banks.
MLS president John Gift Mwakhwawa confirmed the development obtaining the injunction, insisting that the move by the bankers is illegal.—Zodiak Online