Within the next month or so, Government will be moving towards a process of making payments to public servants electronically—directly to their accounts—rather than by cheque.
And banks will be alerting customers to change their cheque books to new standardised models to be used with the cheque-clearing law starting soon.
Finance Minister Colm Imbert indicated this in Tuesday’s Senate debate to amend the Bills of Exchange Act.
Minister in the Ministry of Finance Brian Manning said the law would reduce the four days it takes to clear a cheque from one bank to another to two days.
Currently, cheques are couriered between banks. The new system, involving use of electronic imaging, is expected to begin next month.
Imbert spoke after UNC Senator Wade Mark called for a status report on a US$40 million IDB loan Government obtained in 2017 to do an electronic payment system.
Mark cited pensioners lining up to collect cheques when he said modern technology allows for payment cards. He said the majority of cheques in the system are from Government.
Independent Senator Anthony Vieira shared Mark’s concern on pensioners.
Under the bill, cheques will continue to be used.
Imbert added, “Some of you may have been contacted by your banks and told in due course you’ll have to get new cheque books, as Central Bank is standardising the features on the cheque books. I got my new cheque books recently and one of the things I noticed is the date is done differently to what was on the cheque before.
“So commercial banks are now standardising all of this and putting other security features on the cheque to allow for as much integrity as possible in the electronic imaging.”
On plans for electronic payments for public servants, Imbert said URP is already paid by debit card but the bulk of Government payments—salaries/wages for 60,000/70,000 workers—are via cheque.