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Thursday, 24 February 2011

Fundanga’s Ignorance

The total volume of cheques returned unpaid on account of insufficiently funded accounts increased by 5.4% to 4,428 (third quarter 2010: 4,202) cheques while the value decreased by 8% to K36.2 billion (third quarter 2010: K35.3 billion). The Bank would like to urge members of the public to always ensure that they fund their accounts sufficiently whenever they issue cheques. This will ensure that they do not face criminal charges under the National Payment Systems Act for bouncing cheques dishonestly or with intent to defraud.
Since we are given  two quarters amounting to 8,600 bounced cheques, I would estimate that at least 17,000 cheques bounced in 2010. If we had to investigate and prosecute everyone we would be bankrupt as a country. Every quarter Fundanga (who apparently has been fired from his job) issues the same report (e.g see the 2009 report) about the law he introduced in 2007. I would have thought by now he would recognise that this was a poor law to begin with. A good law is one which is rarely used because the deterrent effect is sufficient enough. This law is like legislating against someone urinating in public. The law has had a zero deterrent effect. When are we going to stop making bad laws?

What is particularly interesting is that the prosecution of Mpombo has made no difference whatsoever. In fact according to Fundanga the number of cheques bouncing actually increased over that period.  This lends further weight to what I have previously suggested – many people who bounce cheques usually do so involuntarily. This is largely because before one accepts a cheque there’s a bond of trust established, which acts as vetting process (Zambia does not use cheque guarantee cards). See a previous post for additional thoughts on this – Decriminalising would-be Mpombos

1 comment:

  1. This ranks up there with the Ghanaian Law against selling used underwear. The NEW law says that vendors must stop selling used underwear. This comes just 16 years after Ghana banned the importation of such items BUT never enforced it. I have high hopes for this new law...surely it will be well enforced and save millions of lives. I thought we banned this kind of stupidity years ago? I guess enforcement is the trick


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