BNM increases cheque fees in lieu of cheaper online interbank transaction costs

Donation for the FalconsI never had a cheque book when I lived in Australia. I got my first chequebook when I moved back about five years ago, for the sole purpose of paying for a car (they wouldn’t accept a charge card)!

Cheques aren’t free. Each leaf costs 0.15 sen (this is the stamp duty that you pay – so the book costs RM7.50). I use it nowadays to pay my credit cards at different banks, because the limit for an electronic GIRO transaction stands at RM5,000 per day, plus you have to pay a RM2 fee per transaction. Simple economics suggest that the cheque is cheaper.

Bank Negara has decided to shake that up: from April 1 2014, the issuer now has to pay a 0.50 sen fee. So now, issuing a cheque costs 0.65 sen. (that means each cheque book now costs an additional RM25, bringing the total cost now to RM32.50 over RM7.50).

On the bright side, they want more transactions processed online: interbank GIRO transactions now cost a mere 0.10 sen per transaction effective May 2 2013. I argue that this fee should be brought down to zero, but it is cheaper than a cheque. My only concern might be the silly RM5,000 limit that they may impose (something you don’t have to worry about a cheque).

What irks me is the last statement: “By 2020, pricing of all payment services would be based on the cost of providing the service.” The cost of providing a service in Malaysia goes up tremendously due to inefficient thanks to the lack of meritocracy in the hiring process. We are all paying for the NEP now.