Hopolang Mokhopi
Effective September 14 2024, cross-border transactions will require more detailed information, including the origin of the transaction, the sender’s occupation, both the sender and receiver’s residence, and the purpose of the transaction.
This announcement was made at a press conference hosted by the Bankers Association of Lesotho (BAL) yesterday at Lancers Inn.
This is in line with the recently terminated Common Monetary Area (CMA) Cross-Border EFT low-value payments and collections system rom South Africa to neighbouring countries of Lesotho, Swaziland, and Namibia.
The previous system in which cross-border payments were processed through South Africa’s domestic retail payment system, contravened international standards on Anti Money Laundering and Combatting of Financing of Terrorism (AML/CFT).
The Bankers Association of Lesotho (BAL) consists of FNB Lesotho, Lesotho Post Bank, Nedbank Lesotho, and Standard Lesotho Bank, and is regulated by the Central Bank of Lesotho.
In his remarks, Central Bank’s Director of Payments and Settlements, Mothetsi Sekoati, said the move follows previously disclosed information regarding changes in handling cross-border transactions within the CMA region.
He explained that transactions among the four CMA countries were previously treated as internal transactions, which worked well but eventually posed challenges due to the lack of detailed information about the sender and recipient.
“Transaction fees were low when transferring money between branches, but South Africa faced challenges because they lacked detailed information about the sender’s occupation and the recipient,” Mr Sekoati said.
He emphasized the importance of knowing all the details of the sender and receiver, as well as the transaction’s purpose. To address these issues, new regulations will be implemented to ensure that all necessary information is provided for cross-border transactions.
Samuel Koatla, representing the all the four BAL members, noted that for a significant period, transactions among these countries lacked regulation, making tracking difficult. The new measures aim to rectify this issue.
“Currently, policies and investments made outside Lesotho allow payees to debit directly from account holders’ accounts. From September 14, this will be prohibited. Instead, insurance brokers and businesses outside Lesotho will be required to open local accounts for debits, enhancing security and preventing theft and money laundering. The same applies to Lesotho companies with clients in other CMA countries,” Mr Koatla said.
The Standard Lesotho Bank Chief Executive, Anton Nicolaisen, said the changes were designed to eliminate market confusion and were driven by all CMA countries, not just Lesotho. He assured that all financial institutions were working diligently to ensure a seamless transition for Basotho.
“Each bank will communicate with its clients to ensure clarity and understanding. Nicolaisen urged all Basotho to raise any concerns and engage with BAL, the Central Bank of Lesotho (CBL), or the individual banks,” he said.
