Bank Negara Malaysia has recently announced (March 2013) a new pricing strategy for their payment services to address the current price distortion between fees for electronic payments and paper-based payments. Under this new pricing scheme, the fee for electronic payment methods will be significantly reduced, and there will be an extra charge for issuing cheques.
Bank Negara Malaysia is changing this payment policy to create an incentive for users to switch from more costly payment methods to lower-cost alternatives. So what are the new transaction fees?
Online Interbank Giro (IBG) Transaction
From 2nd May 2013 onwards, the fee for Interbank GIRO (IBG) transactions performed online (via internet / mobile) will be significantly reduced to RM0.10.Cheque Transfer
To reflect their high production cost, the charge for cheques will be progressively increased, with a period of one year given for the general public and businesses to familiarize with, adjust and migrate to using IBG for their payment transactions. During this period, Bank Negara Malaysia will work closely with the financial industry to further improve the payment infrastructure to ensure payment services are easily accessible, secure and convenient.Effective 1 April 2014, banks will start charging a processing fee of RM0.50 for issuing cheques, with the burden falling on the issuer. This fee is in addition to the existing stamp duty of RM0.15 per cheque leaf.
| Current fee for cheque transactions | Fee in April 2014 for cheque transactions |
|---|---|
| RM0.15 stamp duty per cheque leaf | RM 0.65 (RM0.50 processing fee + RM0.15 stamp duty) per cheque leaf |
Online Interbank Giro (IBG) Transaction - Things You Need To Know
The IBG system was implemented in October 2000 to enable electronic payment transactions between different bank accounts.What is Interbank Giro (IBG) Transaction?
Interbank Giro (IBG) Transaction is the transfer of funds via electronic channels without the need for physical supporting documents such as cheques or bank drafts.How?
The transfer of funds can be done via internet banking, phone banking, etc.Maximum Amount
Via internet banking : the maximum amount is dependent upon each individual bank’s internet banking terms and conditions and subject to a maximum of RM500,000.00 per transaction.Key Benefits:
1. As there is no need for cheques or cash payments with IBG transactions, there is less risk involved.2. Transactions are more secure because all processes must conform to Bank Negara Malaysia’s strict security requirements.
3. Better cash management: you have an accurate record of all your transactions, and cost savings from lower transaction fees.
4. Operational efficiency for corporations: reconciling accounts will be simplified, therefore boosting staff efficiency and productivity.
5. Convenience for individuals: transactions can be performed anywhere, anytime, eliminating the need to physically go to banks during opening hours.
| Bank | Old IBG Fee | New IBG Fee |
|---|---|---|
| Affin Bank, AmBank, Bank Islam, Bank Rakyat, CIMB Bank, OCBC Bank, RHB Bank, UOB Bank | 1. First two transactions of the month bears a charge of RM0.50 – RM1.00. 2. Third transaction onward will be charged RM1.00 – RM2.00 per transaction. Other services bear a RM2.00 charge per transaction. | RM0.10 |
| Alliance Bank, Bank Simpanan Nasional, HSBC Bank, Kuwait Finance House, Maybank, Public Bank | RM2.00 per transaction | |
| Bank Muamalat | RM1.50 per transaction | |
| Citibank, Standard Chartered Bank | RM0.50 per transaction | |
| Hong Leong Bank | RM1.00 per transaction |
Looking for a current account instead? Just head on to our “Best Current Accounts in Malaysia” guide!
Banks who have already made the announcement
While all banks are expected to switch their rates by the 2nd of May 2013, here is a list of banks who have already taken the initiative to make the announcement on their websites:Hong Leong Bank
Kuwait Finance House
Affin Bank
HSBC
UOB Bank
CIMB Bank
Al Rajhi Bank
Maybank
Alliance Bank
AmBank
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