The Reserve Bank of Malawi (RBM) has said it plans to spend K15 billion to replace worn out bank notes this year.
RBM Governor, Dalitso Kabambe, said it is worrying to note the growing amount of forex that the Central Bank is spending just to print new banknotes to replace worn out ones.
Kabambe said the K15 billion, if given to government could be used to implement various development projects cross the country.
“Even with the best efforts of encouraging the best way of handling cash, you will see that when you release K20, K50, K100 life span of that note is quite short. You release a bank note today, when it comes back to the banking system in three week’s time, its worn out and it needs replacement. “You release a K1000 note today, it comes back within a month and it is worn out and there is need for replacement. On your auto teller machine, you all enjoy new notes all the time. When you see some little bit used notes, you say no, I don’t like this one. I want a new one.
But for us to be replacing the worn out banknotes this year alone, we have a budget of K15 billion,” Kabambe said. He said the best option is to embrace electronic payments which could help the country save some forex.
Kabambe said part of the K57 billion profit that the RBM made in 2019 would have to be channeled towards replacing worn out banknotes.
He said if RBM makes some saving on production of notes, that money would be made available to the national Treasury and Parliament would decide where that money could go to support the development of the country.
Kabambe added that in the environment of Covid-19, it would be crucial for Malawians to consider as to how safe it would be to continue using cash.
“All over the world, people are saying the best is electronic payment. You don’t want to continue using cash but electronic payments because your card is yours alone, your phone is yours. As long as you have maintained your hygiene, then on your phone, there is no virus, you will be able to transact without anybody else infecting you.
“But as you start getting cash into the market, you don’t know who has given whoever is selling that cash and you are getting it, whether it is on a kiosk, you don’t know whether that money has no virus on it. So globally, people are encouraging electronic payments,” Kabambe said.
Currently, Malawi has two mobile payment schemes called Airtel Money and TNM Mpamba.
In addition, banks in recent days have been encouraging cash less payments through the use of mobile banking as well as point of sale devices.