Namibian central bank limits value on cheques to N$500,000

The Bank of Namibia has announced a new limit on the value of cheques, as part of an initiative to reduce payment risk. The new N$500,000 limit on cheques within the National Payment System (NPS) became effective on 10 June. The central bank said that in line with this decision, no person will be allowed to split cheque payments into units of N$500,000 or less, if such multiple cheques are issued for the settlement of the same transaction. Businesses and the general public have been urged to consult with their banking institutions to determine how payments exceeding N$500,000 should be settled. Cheques that are issued for more than N$500,000 will also not be accepted from a Namibian account in payment of a Namibian account.

The Bankers Association of Namibia (BAN), which includes the four commercial banks, has advised customers as well as businesses to ask their bank to rather effect an electronic funds transfer or a bank credit transfer on their behalf.

BAN also emphasised the fact that the Bills for Collection service has additional costs attached to it and is subject to possible delays in final payment. “Special arrangements could be made to manually present the bill (cheque) for payment to the drawee bank; however such arrangements are also subject to the payee bank’s willingness to accept high value (bills) cheques for collection manually. It is therefore recommended that this collection process be availed on an exceptional basis only,” said BAN president, Ian Leyenaar. He added that the changes to the NPS required significant system changes in the banking industry as the country move towards clearing funds under a “real-time” system for amounts in excess of N$500,000. “We encourage individuals and clients to review their particular position without delay and discuss any concerns or questions they may have with their banking institution. It is also recommended that, if possible, the new procedures, if any, be implemented as soon as possible,” said Leyenaar. The BAN president said the banking industry hope to reduce some of the risks that both clients and the banks face with regard to the process of making payments.