Malaysia Interbank GIRO money transfer cost to reduce to 10 sen, cheque will be charged processing fee on top of stamp duty

Bank Negara Malaysia (BNM) plans to encourage paperless electronic money transfer by greatly reduce the charge of Interbank GIRO (IBG) money transfer with Internet banking or mobile banking, and at the same time greatly increase the cost of cheque transaction by charging processing fee on top of the existing stamp duty of each cheque issued out by the consumer.

Effective 2 May 2013, bank charge for IBG transaction performed online via internet banking or mobile banking will be reduced to RM0.10 only, compared to the current rate of between RM1-RM4.

On the other hand, from April 2014 onwards, the a processing fee of RM0.50 per cheque transaction will be charged, on top of the existing RM0.15 stamp duty, making the transaction per cheque to cost RM0.65. The processing fee will gradually increase to the level of RM3 in the future.

Note that before 2010, outstation cheques were charged RM0.50 by the bank for clearing. That charge was waived since the implementation of Cheque Truncation and Cheque Conversion System (CTCS) in Malaysia. Now it seems that the RM0.50 cost will be added back in the form of processing fee, and this time, is regardless the cheque is local or outstation.

It is a good news for online banking users to be able to transfer money electronically at a much lower cost in the near future.

However, as far as we know, transferring of money via online banking is capped to RM5,000 per day or so. Unless the banks revise this limit, it will bring inconvenient to us. In certain occasions, writing cheque is still the more preferred way, especially when the amount of money is large, such as buying a car, buying a house, paying lawyer fee, etc.

It is also a more common practice for companies to make payment in cheques.

I hope that BNM will really think through carefully before enforcing the "discouraging mechanism" of using cheque in order to get people to use electronic money transfer.