Zero tolerance for bounced cheques
A number of articles have appeared recently in the local press highlighting the problem of bounced cheques.This problem mostly affects people in business but the general public becomes aware of it when signs such as "Cheques are not accepted" are...
A number of articles have appeared recently in the local press highlighting the problem of bounced cheques.
This problem mostly affects people in business but the general public becomes aware of it when signs such as "Cheques are not accepted" are displayed prominently in shop windows. This reflects badly on the Maltese in general and the reputation of the local banks and goes against the image that Malta tries to give as being an international financial centre.
Although a personal cheque is not legal tender, it is extremely important for our trade transactions, as it is one of the most convenient and safe methods of payment. For smaller amounts, debit and credit cards are effective means of payment but it will take long before the majority of businesses gear themselves to start effecting or receiving payments by means of electronic systems.
Cash payments or bank drafts are alternative ways to effect payments. However, the former is risky for both buyers and sellers, while the latter incurs bank charges and is also time consuming.
While on one hand one appreciates the good services rendered by the banks through the use of the cheque book system, on the other hand, I fail to understand how banks can allow their customers to issue as many as six dishonoured cheques in one calendar month, as stated in the Code of Practice, before taking remedial action. Issuing a cheque without having sufficient funds or a credit facility is fraud and the customer is committing fraud using a tool that is the bank's property!
Until recently, the receiver of a bounced cheque used to report the drawer to the police who used to take prompt action. This procedure has stopped. Why?
It would be very interesting to know how many current account holders are aware of the fact that fraud is committed every time a person knowingly issues a dishonoured cheque.
In my opinion, for the reasons mentioned above, zero tolerance should apply to dishonoured cheques. The government should intervene and consider legislation as proposed by the Malta Association of Credit Management, in order to aid the stakeholders concerned and curtail abuses. The economy in general will also benefit.
An Italian bank has a presence in Malta through shareholding in a local bank. Since, as is known, Italy has solved this problem effectively, maybe this bank can help/advise the local authorities how to solve such malpractice.
If Italy, with a population of nearly 60 million people succeeded, surely our small Malta should too!
One can only hope that with the involvement and cooperation of all concerned, including the organisations representing the business community, the bank cheque will have the "honour" it deserves and the number of dishonoured cheques will be reduced or even eliminated once and for all.
This problem mostly affects people in business but the general public becomes aware of it when signs such as "Cheques are not accepted" are displayed prominently in shop windows. This reflects badly on the Maltese in general and the reputation of the local banks and goes against the image that Malta tries to give as being an international financial centre.
Although a personal cheque is not legal tender, it is extremely important for our trade transactions, as it is one of the most convenient and safe methods of payment. For smaller amounts, debit and credit cards are effective means of payment but it will take long before the majority of businesses gear themselves to start effecting or receiving payments by means of electronic systems.
Cash payments or bank drafts are alternative ways to effect payments. However, the former is risky for both buyers and sellers, while the latter incurs bank charges and is also time consuming.
While on one hand one appreciates the good services rendered by the banks through the use of the cheque book system, on the other hand, I fail to understand how banks can allow their customers to issue as many as six dishonoured cheques in one calendar month, as stated in the Code of Practice, before taking remedial action. Issuing a cheque without having sufficient funds or a credit facility is fraud and the customer is committing fraud using a tool that is the bank's property!
Until recently, the receiver of a bounced cheque used to report the drawer to the police who used to take prompt action. This procedure has stopped. Why?
It would be very interesting to know how many current account holders are aware of the fact that fraud is committed every time a person knowingly issues a dishonoured cheque.
In my opinion, for the reasons mentioned above, zero tolerance should apply to dishonoured cheques. The government should intervene and consider legislation as proposed by the Malta Association of Credit Management, in order to aid the stakeholders concerned and curtail abuses. The economy in general will also benefit.
An Italian bank has a presence in Malta through shareholding in a local bank. Since, as is known, Italy has solved this problem effectively, maybe this bank can help/advise the local authorities how to solve such malpractice.
If Italy, with a population of nearly 60 million people succeeded, surely our small Malta should too!
One can only hope that with the involvement and cooperation of all concerned, including the organisations representing the business community, the bank cheque will have the "honour" it deserves and the number of dishonoured cheques will be reduced or even eliminated once and for all.