Singdollar cheques: Banks to charge S$0.75 to S$3

SINGAPORE: Singaporean banks to charge S$0.75 to S$3 starting Nov 1 for issuing Singapore Dollar (SGD)-denominated cheques. This decision will affect individual and corporate customers and is part of an effort to adapt to the digital age and cover rising cheque-processing costs, as reported by CNA.

The fee structure for these SGD-denominated cheques will range from S$0.75 to S$3, according to the information available on the websites of seven major banks: DBS, UOB, OCBC, Citibank, HSBC, Maybank, and Standard Chartered.

For US dollar-denominated cheques, fees will begin at US$0.55 and go up to US$3.

Notably, these charges will be waived for customers aged 60 and above until 2025. This temporary relief gives customers more time to transition to digital payment methods. Some banks, such as DBS and Standard Chartered, have indicated that they may consider exceptions for specific clients facing exceptional circumstances.

Here’s a quick overview of the fees set to be imposed for issuing cheques by individual customers effective Nov 1, 2023:

• Citibank: S$3 per SGD cheque, US$3 per USD cheque
• DBS: S$0.75 per SGD cheque, US$1 per USD cheque
• HSBC: S$1 per SGD cheque, Free for USD cheque
• Maybank: S$0.75 per SGD cheque, US$0.75 per USD cheque
• OCBC: S$0.75 per SGD cheque, US$0.55 per USD cheque
• Standard Chartered: S$3 per SGD cheque, US$3 per USD cheque
• UOB: S$0.75 per SGD cheque, US$0.55 per USD cheque

The Monetary Authority of Singapore (MAS) and the Association of Banks in Singapore (ABS) initially announced this move in July. The decision to impose these charges for issuing SGD-denominated cheques is a response to the increasing costs of cheque processing and the declining use of cheques.

MAS and ABS have highlighted that the average cost of clearing a cheque has risen significantly, from S$0.10 in 2016 to S$0.40 in 2021. If cheque volumes continue to fall, as anticipated, by another 70%, these costs are expected to surge to between S$2 and S$6 by 2025. Most banks have been subsidizing these costs, but due to the projected increase, they can no longer do so.

To address these challenges, seven banks are taking the lead by introducing these new fees, with other banks expected to follow suit by Jul 1, 2024.

In addition to fees for cheque issuance, depositors will also face charges for cheque deposits in the future. However, most banks have not disclosed specific details about these deposit charges. UOB, Maybank, and DBS have mentioned that cheque deposits will remain free for at least six months after Nov 1, 2023, thanks to government agencies and organisations’ increasing adoption of alternative payment methods such as PayNow. These banks have committed to keeping their customers informed about any changes.

While the move to charge for cheques is aimed at covering processing costs and encouraging the adoption of digital payments, it is important to note that individual cheque users will still have the option to issue cheques for a period beyond 2025, providing them with a longer transition period towards alternative payment methods.

MAS, alongside the Association of Banks in Singapore, the financial industry, and government agencies are the ones to facilitate this transition. The goal is to develop an e-payment solution that can serve as an alternative for post-dated cheques, enhancing convenience for both corporates and individuals.