World News | S Africa's Absa Bank to Stop Issuing Cheques from July
Get latest articles and stories on World at LatestLY. South African banking major Absa Group has announced that it will discontinue issuing cheque books to its clients from July onwards in view of decline in use of this mode of payment.
Johannesburg, June 9 (PTI) South African banking major Absa Group has announced that it will discontinue issuing cheque books to its clients from July onwards in view of decline in use of this mode of payment.
Use of cheques has recorded a major dip in the last decade, especially after bank cards and electronic banking gained prominence, the Absa Group said.
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"Cheque volumes in South Africa have fallen to 80 per cent compared to ten years ago, making cheques uneconomical and commercially unviable," said Bongiwe Gangeni, Absa Group deputy chief executive, retail and business banking.
The Absa Group decision follows the South African Reserve Bank (SARB) drastically reducing the maximum legal value for issuing a cheque from 500,000 rand to 50,000 rand. The minimum amount was reduced from 5 million rand in 2012.
“A cheque is one of the oldest recognised payment instruments in South Africa and also globally. However over the years with the ever-increasing usage, cost-effectiveness, efficiency and convenience of electronic payments such as cards and electronic fund transfers (EFTs) the usage of cheques has declined,” the SARB said in a report.
“Fraudulent activities and scams are prevalent in cheques,” SARB added, citing examples of forgery, fraud, counterfeiting and ‘cheque washing', a process of erasing all information from a genuine cheque.
“Against this background, Absa has taken a business decision to exit cheques as a payment instrument from its product functionality by December 2020,” Gangeni said. (PTI)
(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)