While working in a legal organisation, I noticed that some banks adopt the practice of charging 50 cents per cheque cleared per month after the first 30 cheques.
While it may not be a major cause for concern for bigger firms, this policy affects smaller firms greatly.
Generally, smaller firms make a lot of payments by cheque. Monetary transfers are done on a per-customer basis.
Cheques also circumvent the hassle and costs of transferring funds to different banks.
The number of cheques used in such transactions usually exceeds 30, which results in costs accumulating for smaller firms.
Singapore is a leading business and legal hub. Ease, efficiency and the cost of monetary transactions are, therefore, extremely important.
It is unfortunate that while work is being done to encourage the growth of small and medium-sized enterprises (SMEs), such bank policies are effectively undermining the efforts.
To come to a solution, the interests of both banks and smaller firms must be taken into consideration.
On the one hand, banks incur costs for every cheque cleared. On the other hand, smaller firms seek to reduce their costs.
Perhaps banks could adopt a flexible approach and modify the charge imposed, depending on the company's size.
Should the company be small, the banks could reduce or waive the charge altogether.
This would make banks more competitive on their end, while smaller firms can find it easier to thrive.
Victoria Ngaim (Ms)