Financial Times

New scheme to fight cheque fraud
By Quintus Perera
A Sri Lankan businessman is in the process of developing a novel scheme to outwit those who provide cheques that bounce. The scheme is designed to tackle the growing problem of dud cheques faced by businesses. M. Rifdhi Jameel, Managing Director, Pan Asia Impex Ltd, said he is working on a network to collect information of fraudulent cheque drawers, who draw cheques while there are no funds in their accounts.

He is planning to base his network on a system similar to what commercial banks in the country use to detect bank loan defaulters. The loan defaulter detection system is now incorporated in the entire banking system in the country.

Jameel said that if the people who use cheques for their transactions because it is safer and more convenient now find they are put to greater inconvenience, then the process seems to be utterly useless. But it would be inadvisable to stop dealing with cheques altogether, as a result.

He says the cheque defaulter's identity card number is also essential along with other relevant information so that the person could be separated from genuine persons.

Once the network is in operation, when a cheque gets bounced it could be notified to the network immediately. Those using the network will be given the information for a small fee like Rs 100 to 150.

"People would prefer to obtain such information before they become victims," Jameel said. "When someone gets a cheque as payment for services or goods, he should be able to immediately call a number and check whether there are funds in that particular account."

He said his company plans to introduce such a network and invites the business community and financial institutions such as banks to support the venture and together work out a system to fight cheque fraud.

Jameel said that many leading financial institutions have expressed their willingness to cooperate to adopt a foolproof system. But at present they were confronted with some legal barriers as the law is not that strong in that area. One of the problems was that commercial banks cannot divulge account balances. He said that to overcome this legal barrier the network could run as a semi-government institution.

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