afternoon highlight (26/03/12/055/530) RM600m cheque-clearing subsidy

RM600m cheque-clearing subsidy

KUALA LUMPUR: Financial institutions subsidise about RM600 million to clear more than 200 million issued cheques annually, said Bank Negara Malaysia.

Malaysia, the central bank said can potentially gain about one per cent of its gross domestic product in cost savings a year if it fully switches from paper- based payments to e-payments.

In a statement to Business Times, Bank Negara said the use of cheques is minimal in countries like Austria, Finland, Norway and Sweden where cheque books are almost non-existent.

"Studies have shown that the cost of using an e-payment instrument is between one-third and one-half that of a paper-based instrument."

Bank Negara said Malaysia can leverage on its highly banked population, high number of mobile phones and high Internet penetration in households to achieve this cost savings.

"The Malaysian population can utilise the wide range of onli-ne payment services available and take advantage of the rebates given by billers for auto debit facility," it said, adding that funds transfer works faster when done electronically.

Last Wednesday, Bank Negara governor Tan Sri Zeti Akhtar asked the public to stop issuing cheques as mode of payment in view of the high cost borne by the banking system.

However, an economist Azrul Azwar Ahmad Tajuddin said cheque issuances could be made fewer only when payment options are better.

 

Source : New Straits Times

Date : 26 March 2012

afternoon highlight (26/03/12/055/530)