Central Bank: cheques can now be deposited to beneficiary account by third parties

26th March 2020

It is the latest to introduce measures concerning the COVID-19 pandemic

Following the advice of national health authorities for persons to remain indoors as much as possible, the Central Bank of Malta yesterday issued a directive on important measures concerning cheques.

The new measures will primarily enable persons to avoid visiting bank branches and other financial service providers, by depositing them through trusted third parties.

The Central Bank is the latest to issue measures aimed at limiting contact, as Malta combats the COVID-19 pandemic. As of Monday noon, Malta registered 129 cases of the virus.

In a statement issued on Wednesday, the Central Bank said measures were introduced after consultation with commercial banks as a temporary measure during the current pandemic restrictions and will come into force on today.

The notification, called Directive 17, is aimed at maintaining banking services essential to the life of the community. They spell out minimum services expectations to be provided by commercial banks and financial institutions.

The most important change affects the use of cheques which will no longer require direct deposit by the beneficiary.

As from 26th March, those cheques marked as “only” for use by the beneficiary can - until further notice - be deposited by a trusted third party of the beneficiary.

This can be done in two ways:

The beneficiary can instruct the trusted person to make the deposit directly into the beneficiary’s account;

The beneficiary can also instruct the trusted person to make the deposit into the trusted person’s own bank account via an ATM. This should be particularly helpful for those beneficiaries who do not have a bank account.

These measures are aimed to help those persons who either cannot leave their home, or who have been advised not to do so by the health authorities.

It provides a remedy for a section of the population who will be receiving their social security benefits, including pensions, in the form of a cheque from the Government.

The new directive also takes into account concerns of commercial banks with regards to the wellbeing of their own staff, and places emphasis on the use of ATMs to reduce the number of people who need to rely on over-the-counter services.

Since banks may also be working with limited resources, the amount of time taken to clear cheques and drafts has been extended temporarily to a maximum of six days, while cash deposits may take up to three days to be processed.

To reduce the number of customers inside branches, all banks are now authorised to restrict over-the-counter cash withdrawals from a deposit account associated with a payment card unless the amount exceeds €500.

In the meantime, banks and financial institutions must provide over-the-counter cash deposit services for all those customers who do not have any other access to alternatives such as ATMs.

These customers are encouraged to obtain access to such alternatives offered by the financial services community.

These are just some of the measures being taken by institutions in the financial sector to support the health authorities’ guidance to reduce the need for people to go outdoors, and to maintain social distancing. Banks have also increased the limit for non-authenticated contactless cards to €50.