The Bankers Association of Lesotho (BAL) has announced upcoming cross-border payment changes effective from September 14, 2024.
Established in 2006, BAL is made up of four commercial banks; Standard Lesotho Bank, Nedbank Lesotho, First National Bank and Lesotho Post Bank.
BAL’s technical expert, Samuel Koatla on Wednesday last week said the impact of the changes to Basotho include payments to and from Common Monetary Area (CMA) countries.
“Cross-border EFT credit payments to and from account holders in South Africa, Namibia and Eswatini will still be possible on various bank platforms with additional mandatory information such as payer’s gender, address, beneficiary address and Balance of Payment (BOP) category of the payment.
“The payment fees will change slightly, but the Bankers Association of Lesotho (BAL) guarantees to ensure that the burden to the customers is reasonable and fair. Basotho nationals working in South Africa, Eswatini and Namibia will still receive their salaries in their accounts held with local banks in Lesotho. There won’t be need to open an account with a foreign bank,” Koatla explained.
Apart from that, the processing of Electronic Funds Transfer (EFT) cross-border collections will no longer be possible among the CMA Countries. That means EFT debit transactions for a foreign bank must be facilitated through a local bank.
Foreign entities with a presence in Lesotho have an option of collecting through their local counterparts. The Lesotho counterpart may thereafter facilitate the transfer of funds to its foreign counterpart.
Foreign entities with no presence in Lesotho are advised to open bank accounts with domestic financial institutions to collect all debit orders in line with the Lesotho EFT Automated Clearing House rules.
Koatla noted that the decision has been made by the Common Monetary Area Cross-Border Payments Oversight Committee and Bank regulators in the CMA region (Lesotho, South Africa, Eswatini and Namibia) to discontinue the CMA EFT low value payments and collections interim solution.
“This is the discontinuation of a method currently used by banks within CMA to facilitate clients’ transactions and not discontinuation of the clients’ ability to make inter-CMA countries payment transactions. Major drivers of this decision are based on risk and compliance issues of the current method (CMA EFT) that need to be mitigated.
“Commercial banks in Lesotho are currently in the process of ensuring that the necessary customer friendly changes are made on the internet banking platforms, bank mobile applications, and other platforms accessible to the client are ready before September 2024,” he added.
The banks have until end of August 2024 to have done all the changes. The go-live date for the change is effective from 14th September 2024.
Central Bank of Lesotho (CBL) Director of Payments and Settlements, Mothetsi Sekoati, assured the public that the changes will not affect the way that clients used to transact.
“In this regard, we will work together with the commercial banks to ensure that the changes do not come with inconvenience and exorbitant costs to our financial consumers,” he said.
On his part, acting BAL chairperson Anton Nicolaisen said CBL and BAL understand the prospects and challenges of this new development in the market, and they are prepared to facilitate smooth implementation.
