No more cheques but IBG come 2014

It's time to make a SWITCH from issuing to cheques to IBG (Inter Bank Giro) because effective 1 April 2014, a cheque processing fee of RM0.50 will be imposed in addition to the RM0.15 stamp duty per cheque leaf.

So that means that when you issue a cheque, you are losing another RM0.65 which you can save if you use IBG which is only RM0.10 per transaction.

In addition, not only is IBG cheaper, it's also faster than cheque, which is:-

Days	Cut-off Time	Funds Availability
Monday to Friday	Before 12:00 noon    After 12:00 noon	Same day Next working day
Sat, Sun n Federal Territory P.Holiday	Not applicable	Next working day

Bear in mind there is another option of INSTANT IBG but it cost RM2.00 per transactions.

IBG transactions are pretty simple but first and foremost you must have online access to your bank account (savings / current).

HOW TO DO IT:-
Once you have signed up for online banking, then you'll just need to add the recipients under your favourite IBG. Select the name of bank, types of transfer ie.

Fund transfer - means transfer to another savings / current account
Credit card payment
Loan payment
Hire purchase

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Note:- FYI my house repayment is consider a fund transfer because it's flexi loan where I was given a current account number complete with cheque book.

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Then you key in the recipient account number and name. There is another layer of security (eg. NRIC number etc) but you can opt out of it.

Everything is pretty straightforward and if do do encounter any problem, just give the bank's customer service a call. I'm sure they can assist you in using IBG.

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BUT have you pause to wonder why the sudden increase in cheque processing fee to encourage customers to use IBG or internet. Why?

Well one rationale is so that it will be easier for Bank Negara to monitor money flow and curb money laundering because with cheques, you can issue cash cheques to people who do not own any bank accounts.

But with IBG, it will be transactions between bank account holders and thus easier for Bank Negara to trace the money ie. where your money comes from and where it goes to.

Not to say that you cannot issue cheques anymore but in the event that you do, our government still stand to benefit because 50sen does work out to quite a "handsome" extra income at the end of the day.