In a January 13 2022 entry under the headline ‘Make interbank transfers faster in 2022’, Business Unpacked lamented the delays encountered in clearance of funds electronically transferred from one bank to another.

Following the write-up, feedback flowed, especially from players in the financial sector, including the Reserve Bank of Malawi (RBM) which stated that discussions were underway towards having instant electronic funds transfers.

In a follow-up write up on January 20 2022 titled ‘Flicker of hope for interbank clearance’, I recall quoting an official from RBM who had given feedback to the earlier article as follows: “Aub, that article on making interbank transfers faster has come at a right time when we at the Reserve Bank are also discussing with banks on increasing clearing times for retail payments as well as concluding on the bank specific instant payments project which once concluded will see interbank payments behave more or less like mobile money transfers through TNM Mpamba and Airtel Money.

“Be rest assured that the article also provides input to the agenda items during our scheduled meetings with industry players on the matter.”

There was also feedback from a banker with one of the commercial banks who added that the article should have interrogated why the systems go to bed.

The banker said: “Banking worldwide is done during working hours and banking days as movement of cash from one institution to another is regulated and there are reporting implications.

“The other issue I wanted to comment on is that these days movement of funds from one bank to another is through the RBM system.”

Today, I am delighted to write that instant interbank transfers are here. In other words, one of the items on Business Unpacked’s wish-list for 2022 has been ticked. I say well done RBM and commercial banks for this innovation which will surely further make electronic banking transactions more convenient.

I was pleasantly surprised last week when in the course of making an electronic funds transfer from my bank account I was given the option of “immediate transfer”. I ticked “immediate transfer” and moments later the recipient of a different bank acknowledged receipt of the funds.

Previously, the funds could have been accessed by the recipient 24 hours later. In some cases, the clearances would even take 48 hours or more and it got worse on weekends as the clearance system only worked on business days and within business hours, especially for interbank transfers.

For this, the banks deserve a round of applause for introducing services that will save customers’ time while giving them convenience.

Naturally, the instant interbank transfer is at a cost. For instance, my transaction cost K1 100, but I considered the risk and time I would have taken to cash out and go deposit, the money at thhe other bank.

For the record, the banks were already providing instant transfers where one was transferring funds from bank account to mobile money platforms, notably Airtel Money and TNM Mpamba.

Malawi is still a cash society where many people transact using hard cash and if we are to promote the use of digital services, fine-tuning of services such as interbank electronic funds transfers will be one of the major incentives for improved uptake of electronic transactions.

Keep on improving the digital services to enhance convenience. To customers, please embrace digital financial transactions as they save time, give convenience and, above all, they are secure. Days of moving about with wads of cash are over, let’s go digital.

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