The Bank of Zambia has issued a circular to all commercial banks limiting the amount of money that can be withdrawn through cheques.
The circular dated 14 October 2016 signed by Bank of Zambia Deputy Governor- Operations Bwalya Ngandu is aimed at promoting the use of electronic payment methods.
The Central Bank said in the implementation of the new limits, splitting of cheques in an effort to circumvent the prescribed limits is prohibited as it violates the spirit of this directive.
“Split cheques will attract a penalty fee on the paying bank of 25% of the value of the split cheques up to a maximum of two hundred thousand penalty units as stipulated in Section 43 of the National Payment Systems Act of 2007,” the circular read.
“The fee will be paid to the National Electronic Clearing House Limited and will be collected on a monthly basis through the paying bank’s settlement account held at the Bank of Zambia. These limits shall take place 180 days from date of this circular,” Dr Ngandu said.
He warned that failure to comply with the above requirement could in addition attract penalties in line with Section 43 of the National Payment Systems Act of 2007.