Parliament has approved the phasing out of cheque payments after passing the Bills of Exchange (Amendment) Bill, with government touting the reform to accelerate digitisation and modernise Malawi’s payment systems.
Speaking when he presented the Bill in Parliament yesterday, Minister of Finance, Economic Planning and Decentralisation Joseph Mwanamvekha said the legislation was part of broader financial sector reforms aimed at moving the country away from outdated payment methods and aligning laws with the Public Finance Management Act.
He said cheque usage had declined significantly while several countries in the region had already abandoned the payment method in favour of digital platforms.
“The Bill of Exchange is saying let’s now use modern ways of payment as opposed to issuing of cheques,” said Mwanamvekha.
On the Pension Amendment Bill and Insurance Amendment Bill, which were also passed yesterday, the minister said the changes focused on harmonising the management of unclaimed funds by ensuring that such resources were handled in line with the Public Finance Management Act.
“There is need to strengthen regulation, address cybercrime and sensitise customers who are going to use digital platforms,” said Mwanamvekha.
Opposition Malawi Congress Party (MCP) spokesperson on Finance Peter Dimba welcomed the passage of the Bills of Exchange (Amendment) Bill, describing it as a significant milestone that will end the use of cheques in Malawi.
He said although cheques had played an important role in Malawi’s financial system, they became vulnerable to fraud, forgery and counterfeit while also causing delays in transactions.
“Cheques have really served us, but in some ways have been found wanting. Thus, the move towards digital payments is timely but government should improve internet connectivity and undertake extensive public sensitisation to ensure Malawians are ready for the transition,” said Dimba.
Former finance minister Sosten Gwengwe said the reforms on unclaimed funds will help bring uniformity in the handling of billions of kwacha currently held by banks, insurance companies and other financial institutions.
He, however, warned that the shift from cheques to electronic payments must be accompanied by improved digital infrastructure, reliable networks and affordable transaction costs to prevent financial exclusion.
“The caveat is the rising cost of digital transactions,” said Gwengwe.
The legislators also backed calls for the establishment of a sovereign wealth fund in future to manage resources such as unclaimed funds.
