I asked the Finance Minister to explain the new 50 cents cheque processing fee introduced by the Bank Negara Malaysia and Association of Banks Malaysia. This is in addition to the existing 15-sen stamp duty per cheque. This is going to add RM100 million to the cost of doing business. The implementation of the new fee was postponed from 1st April 2014 to 1st Jan 2015.
The fee of the Sistem GIRO Antara Bank [Interbank GIRO (IBG)] was also reduced from RM2 to 10-sen from 2nd May 2013. The explanation given for the new charges is to discourage the use of paper cheques and to encourage the use of the electronic transfer. The e-payment is meant to be cheaper, faster and more cost effective.
The new charges were meant to start on 1st April 2014 but had been postponed to 1st, January 2015. This is because only 65% of the government agencies were ready to receive e-payments. There were also huge opposition from the Chambers of Commerce, industry bodies and consumer associations.
The Finance Minister stated in his answer to me that since the new IBG fee of 10-sen was introduced, the IBG transaction showed a very encouraging sign of growth and had had tripled from 2% to 6%. The public and businesses had benefitted from the saving as much as RM129 million from May 2013 to June 2014 via the use of IBG. Over the same period of time, the number of cheques issued decreased at a much faster rate as high as 9.8% at the first half of the year 2014 compared to only 2% at the first half of the year 2013. All these happened before the new punitive 50-sen cheque processing fee was introduced.
It is very obvious that the high IBG charge of RM2 was the main reason why the e-payment system was not adopted faster earlier. The 50-sen cheque processing fee is totally unnecessary except to add to the continuous record earnings of the banks which had a combined pre-tax profits of RM29.8 billions in 2013. This year the banks are expecting even higher profit and another record year. However, instead of rewarding the customers with better services and lower cost, the greedy banks want to penalize public and the businesses reeling from escalating costs of living and doing business by imposing a new cheque processing fee!
We must also realize that
- Not everyone is computer literate to handle e-payments
- Not everyone has access to a computer or internet connection
- The cost of buying a computer and connecting to internet will cost a few thousand ringgits minimum
- The e-payments usually has a low daily limit of RM5000 only
- The internet connection speed and coverage is far from satisfactory in many parts of the country.
- The security of internet banking has been called into question lately
- For the businesses, cheques very often require two signatures by two of the directors. How is this to be done by two directors on the internet?
Unfortunately, the new ruling may have the unwanted end result that many people may choose to go back to cash payment instead of e-payment. We will see a sudden rise in cash transactions and this indeed will be a step backwards for the country.
I hereby urge the Finance Minister, the Bank Negara and the Association of Banks Malaysia to cancel the new cheque processing fee for the benefit of the people and the businesses.