Industry against cheque limit bid


The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has voiced out concerns over the proposed K5 million cheque value limit the country’s monetary authorities intend to implement this year.

Among other things, the cheque value limit seeks to reduce the usage of cheques and promote electronic fund transfers.

But in its submission to a stakeholder’s conference on the matter, MCCCI says much as the business community welcomes innovations in the payment systems that the Reserve Bank of Malawi in collaboration with Bankers Association of Malawi would like to introduce, there are a number of issues that require clarification.


The MCCCI said some companies are carrying out contracts worth billions of kwacha which necessitate writing invoices in the region of K150 million every month.

“Do they expect our client to issue 30 cheques to pay one invoice? The same with purchases, they have suppliers to whom they have to pay K50 million or more, how many cheques should we issue?” queried the chamber of commerce.

It further noted that government institutions have challenges accepting online payments and prefer use of cheques.


“This implies that one has to issue more cheques when paying duty to the Malawi Revenue Authority, for example. The proposal suggests an invoice has to be split several times to be in line with this new directive where online payment is not possible.

“Businesses make large payments for customs duties and taxes by cheque because MRA are not yet ready to handle, monitor and reconcile electronic bank transfers. Limiting cheque values to K5million only will waste time and unnecessarily increase volume of paperwork for clearance of cargo for those in the clearing work,” noted the Chamber.

It further says transacting via internet banking or bank transfer letters will entail a lot of additional work on senior management staff, adding that using this method would fuel a loss of paper trail required for audit purposes.

The private sector mouthpiece said if the K5 million cheque value limit is aimed at curbing frauds, it would be hard to achieve its objective as fraudsters will issue multiple cheques.

“RBM needs to explain if banking systems are now upgraded and how multiple cheques will be identified especially fraudulent ones,” said MCCCI.

The Chamber noted that though some businesses adopted the electronic fund transfer system, they still face some challenges as some smaller banks have challenges in processing these transactions and it takes them longer to receive funds in the respective accounts.

The Chamber has since proposed a cheque limit of K100 million per transaction, arguing that in South Africa the cheque limit is ZAR5 million which translates to K200 million.

In her respone, Reserve Bank of Malawi (RBM) Deputy Governor for Economics Naomi Ngwira said putting a cheque value limit on cheques would help prevent a repeat of the Cashgate scandal.

She also described the concerns raised by MCCCI as a fear of the unknown, arguing that the Chamber could have had all their worries addressed had they attended the stakeholder’s conference.

“I think most of the issues raised by the MCCCI have been ably addressed at this meeting. It is just unfortunate that they did not attend,” said Ngwira.

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