business

Aug. 31, 2021

NEO SENOKO

2 min read

Banks scrap use of cheques

Banks scrap use of cheques

CBL Governor, Dr Retšelisitsoe Matlanyane

Story highlights

  • banks will no longer accept any cheques for deposit
  • fraud perpetrated through the issuing of cheques
  • banks on the alternative electronic payment methods

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LOCAL commercial banks will cease issuing and accepting cheques effective from September 30, marking a death knell to the once popular method of payment.

The Central Bank of Lesotho (CBL) announced on Tuesday that local banks will no longer accept any cheques for deposit or encashment after the above mentioned date.

“The Central Bank of Lesotho (CBL), Payments Association of Lesotho (PAL) and the Bankers Association of Lesotho (BAL), jointly wish to inform the public that both the issuing and the acceptance of cheques will stop, effective from September 30,” CBL said on Tuesday.

The decision, the bank said, was taken due to the numerous challenges associated with the usage of cheques, including the lengthy processing period, fraud perpetrated through the issuing of cheques as well as its expensive nature as a payment instrument.

Other challenges include the restricted acceptance of cheques, declining usage, limited education and protection for the customers as well as the outdated cheque processing system.

The impact of the COVID-19 pandemic has also been labeled as another challenge.

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“In this regard, Lesotho banks will not accept any cheques for deposit or encashment after September 30, 2021. Banks will communicate extensively with their clients leading up to and beyond the discontinuation of cheques, and will furthermore educate their clients on alternative electronic payment methods that may be used,” CBL added.

The regulator further warned that affected stakeholders and clients are requested not to write or accept cheques after September 30. Cheques that have already been issued will not be redeemed after September 30.

Clients are encouraged to approach their banks on the alternative electronic payment methods or to direct any queries they may have related to the process of termination of the usage of cheques.

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