The Reserve Bank of Malawi (RBM) will from March 1 replace the Foreign Exchange Statistical Database System (Fesds) with a new system for reporting data on cross-border financial transactions by authorised dealer banks and registered forex dealers.
The new system, Cross-border Foreign Exchange Reporting System (Cfers), whose access will be shared with the Malawi Revenue Authority (MRA), will help the country’s commercial banks and other financial institutions to track foreign exchange payments and receipts.
According to RBM spokesperson Mbane Ngwira the system has added advantage as opposed to the Fesds which is not integrated and poses some risks on late capturing of transactions or even non-capturing of other transactions due to human error.
“If an exporter sends his products the system will track the receipt of proceeds and reconcile the account. The new system will have the capability of being integrated into the core banking systems,” said Ngwira.
He added that the system will improve efficiency as any transaction that has been captured in the banking system will be automatically recorded.
In order to comply with the requirements of the system, individuals and organizations processing cross-border payments and receipts with banks, foreign exchange bureaux, money transfer business operators and tourist operators will be required to provide detailed information about the foreign exchange payments and receipts.
To this effect, foreign exchange payment will not be effected until the applicant has fully declared the transaction.
Further, any foreign exchange receipt will not be credited to the account of a recipient until the transaction has been fully declared.
Speaking separately, an official from the MRA said the new system will not exempt individuals, companies or organisations from complying with the exchange control rules and regulations requirements of cross border foreign exchange transactions.
Elsewhere in Africa, Namibia and South Africa, just to mention a few, use the electronically based platform which provides more accurate information for statistical and policy formulation purposes.
The reporting system is in line with international standard of reporting and managing Balance of Payment (BoP) data and it requires comprehensive reporting of transactions irrespective of their value.
For instance in Namibia the information compiled from the system is used for multi-purposes such as the compilation of balance of payment statistics of Namibia.