Regulatory Alerts2016-01-01
Revision of Item Value Limits on Cheques and Electronic Funds Transfers
The Bank of Zambia has revised the Item Value Limits for local and foreign cheques, direct debits, and direct credits to encourage broader adoption of electronic payment methods. The directive explicitly prohibits splitting cheques to circumvent these thresholds, mandating a 25% penalty fee on paying banks that is collected monthly by the Zambia Electronic Clearing House. These updated limits, which repeal the prior circular, take effect 180 days from issuance and remain subject to standard compliance penalties under the National Payment Systems Act.
[Logo: Bank of Zambia]
Bank of Zambia OFFICE OF THE DEPUTY GOVERNOR - OPERATIONS
BOZ/EXEC/DGO/bcps/bp
October 14, 2016
CB Circular No. : 06/2016
To : All Heads of Commercial Banks
REVISION OF ITEM VALUE LIMITS ON CHEQUES AND ELECTRONIC FUNDS TRANSFERS
In exercise of its powers contained in Section 5 (3) of the National Payment Systems Act 2007, the Bank of Zambia would like to advise all commercial banks on the revisions to the Item Value Limits (IVL) on cheques and electronic funds transfers as reflected in the schedule. The decision is aimed at promoting the use of electronic payment methods.
In the implementation of the new limits, that splitting of cheques 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. This fee will be paid to the Zambia Electronic Clearing House Limited (ZECHL) 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 effect 180 days from the date of this Circular. CB Circular 03/2008 is therefore repealed.
Failure to comply with the above requirements could in addition attract penalties in line with Section 43 of the National Payment Systems Act of 2007.
[Signature]
Bwalya K. E. Ng’andu (Dr) DEPUTY GOVERNOR – OPERATIONS
Cc Governor Senior Director – Supervisory Policy Director – Banking, Currency and Payment Systems Director – Bank Supervision Director – Non-Bank Financial Institutions Supervision Chief Executive Officer – Zambia Electronic Clearing House Limited
Bank Square, Cairo Road P.O. Box 30080, Lusaka, Zambia Tel: 260-211-226844, 228888 Fax:260-211-237070 E-mail:dgo@boz.zm Web: http://www.boz.zm
Schedule
| Type of Payment Instrument | Old Item Value Limit | New Item Value Limit |
|---|---|---|
| Local Currency Denominated Cheques | ||
| Local Kwacha cheques cleared through the Clearing House | K100, 000.00 | K25, 000.00 |
| Local cheques presented over the Counter | K0.00 | K25, 000.00 |
| Foreign Currency Denominated Cheques | ||
| Foreign cheques cleared within Zambia | US$0.00 | US$5, 000.00 |
| Foreign cheques presented over the Counter | US$0.00 | US$5, 000.00 |
| Electronic Funds Transfer | ||
| Direct Debits | K50, 000.00 | K75, 000.00 |
| Direct Credits | K100, 000.00 | K500, 000.00 |
Bank Square, Cairo Road P.O. Box 30080, Lusaka, Zambia Tel: +260-211-226844/228888/9 Fax: +260-211-237070 Email: bngandu@boz.zm. http://www.boz.zm