Cheques on the way out
Central Bank cheques reduced by 35 per cent
In several European countries the popularity of cheques
is on the wane to the extent that people can do without them for all
their payments. In Malta some people do not accept anything but cash
and some have never written or accepted a cheque in their life.
In Germany many people are able to settle all their bills electronically,
via the internet, saving on postage fees, and cutting down on work,
saving money and reducing the volume of paper waste being created.
In Malta the Central Bank of Malta has been making a concerted effort
to reduce the volume of cheques being used.
"The Central Bank of Malta, through the Malta Clearing-House (MCH)
had been working towards the implementation of the Direct Credit System
(DCS) as far back as 1992," the Central Banks Manager, External
Relations Office, told The Malta Financial and Business Times.
In October 1992 the MCH Committee had launched the Scheme through an
educational campaign in the media. The Direct Credit System provides
for the electronic transfer of salaries, wages, pensions, dividend warrants
and other payments to government and private sector employees directly
to their respective bank account rather than by cheque.
The Central Bank cheques
The Central Banks spokesperson described now the number of cheques
drawn on the Central Bank has been cut down: "The Central Bank
has been liasing with both the Treasury Department and the Ministry
for Social Policy since they are the largest issuers of cheques drawn
on the Central Bank.
"The progress registered so far by the Treasury Department has
been quite encouraging with Government salaries/stipends being almost
all paid by the DCS (98 percent). With regards to pensions paid to ex
Government employees the figure stands at 68 percent.
"This Department has also made it mandatory for every new Government
Stock Dividends to be paid by the DCS. Shortly it will be tackling the
The Ministry for Social Policy has also been instrumental in decreasing
their cheques. They are encouraging the various beneficiaries to opt
for the DCS, but since this is being undertaken on a voluntary basis
the response has been rather modest, about 25 percent of all payments.
From the 2.6 million cheques drawn annually on the Central Bank, the
number of such cheques has been scaled down to about 1.7 million, a
decrease of almost 35 percent - no mean feat given that the change has
not been compulsorily introduced by the authorities.
Cheques drawn on other banks
The Central Bank, together with the commercial banks, is working on
the establishment of an Automated Clearing House which would facilitate
the interbank clearing of electronic payments, such as standing orders,
direct credits, direct debits etc. This, coupled with the wider use
of the DCS and the Direct Debit system augurs well in the banking sectors
effort to decrease the use of cheques which is quite an expensive banking
facility especially since chequebooks and the underlying clearing of
cheques are offered free of charge. The banks, on their part, are also
providing the various debit cards free to encourage further their use.
"Most encouraging is the fact that the younger generation are fully
exploiting these new payment instruments," the Central Bank manager
told The Malta Financial and Business Times.
Most of the private companies have adopted the DCS without difficulties
since they immediately appreciated the great advantages of effecting
"It is really encouraging to note that various Government Departments,
Government owned corporations and some large private companies are now
accepting payments for services rendered through the internet or by
the Direct Debit System. In this context, the e-Government concept has
indeed been a move in the right direction. All these new facilities
help in reducing the number of cheques in use."