Why do banks charge customers for encashing account payee cheques?
To minimise the risk of loss from open cheques due to robbery, theft and fraud, banks have issued pre-printed account payee cheques.
Notwithstanding this, some banks may allow the accountholder and the payee to encash the account payee cheques over the counter.
However, to discourage such practice, a fee is usually levied over encashment of third party account payee cheques. The fee could either be charged to the payee or the issuer of the cheque depending on the practice of the bank concerned.
Therefore, if cash is preferred mode of payment by the payee, you should consider other forms of payment, such as via the internet, ATM machines, phone banking or Interbank GIRO service which are more secure and cost efficient.
Reprinted with permission from BankingInfo (A Consumer Education Programme by Bank Negara Malaysia)
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