RBM yet to implement cheque value limitation


ngwiraThe Reserve Bank of Malawi (RBM) is yet start enforcing a directive on a K5 million cheque value limit seven months after its proposed date of implementation.

The cheque value ceiling was supposed to be implemented by the Reserve Bank of Malawi (RBM) on July 1, 2015 as one way of putting a limit on the amount of money that could be transacted using a cheque.

The limit was seen as one way of preventing a reoccurrence of the cashgate fraud in the country.


RBM spokesperson Mbane Ngwira, while confirming that the cheque value limit was yet to be implemented, said Monday he needed time to find out why the proposed regulation has not been implemented.

RBM deputy governor for economics, Naomi Ngwira, announced the central bank’s plan to enforce a cheque value limitation during a meeting hosted by the bank in Mangochi last year, saying most of the money looted from government coffers in the cashgate was through cheques cashed over the counter.

“Of course we cannot completely eliminate cashgate because the people involved are always thinking of new ways of beating the system but putting a cheque value limit would help a great deal as the amounts involved would be reduced,” said Ngwira.


The proposal, however, faced resistance from the business community who argued that it would be cumbersome as it would require writing of multiple cheques for payments above K5 million.

“Some companies have contracts in billions and at every month there will be an invoice of say K150 million for work done. Do they expect clients to issue 30 cheques to pay one invoice?” wondered the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) in its position paper.

MCCCI observed that government institutions have challenges accepting online payments and prefer use of cheques, adding that should the limit be introduced, it would also require large tax payers to issue multiple cheques when paying dues to the Malawi Revenue Authority.

“In any case, if the limitation is aimed at curbing fraud, fraudsters will simply 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, in the position paper.

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