…. Individuals can transact any amount below E1 million
…. Companies can transact any amount below E5 million
BY EPN REPORTER
MBABANE — The frustration of sending money from Eswatini to South Africa is now a thing of the past.
This follows the South African Reserve Bank’s directive to its regulated entities issued on Friday, relaxing regulatory requirements that had previously made sending money to South Africa expensive and slow.
Last week, Dr Phil Mnisi, the Governor of the Central Bank of Eswatini (CBE), engaged with Lesetja Kganyago, the Governor of the South African Reserve Bank (SARB), to address concerns raised by the public and the business community regarding the recent regularisation of cross-border transactions in the Common Monetary Area (CMA) region. The CMA region comprises South Africa, Namibia, Lesotho, and Eswatini.
For the past two weeks, the CBE and commercial banks have received numerous complaints, largely regarding the increased time it takes to make payments within the region and the additional transaction fees. Most affected were transactions between Eswatini and South Africa.
The challenges emerged after changes within the CMA, comprising South Africa, Lesotho, Namibia, and Eswatini, aimed at ensuring compliance with international Anti-Money Laundering (AML) standards as issued by the Financial Action Task Force (FATF), regional foreign exchange regulations issued by the central banks, and the Money Laundering and Terrorist Financing (Prevention) Act, 2011 (as amended).
The regional foreign exchange regulations stipulated that all cross-border transactions should be reported to the Central Banks through the Cross Border Foreign Exchange Transaction Reporting System, specifying accurate sender and receiver information and the purpose of the transaction.
However, following the successful migration of the CMA transactions by the local banks, some payments going to South Africa were not being processed within the expected timelines and cost.
This meant that when payments were received by CMA member countries, for instance, South Africa, the receiving bank was required to contact the customer to confirm the transaction details before the funds could be credited to the customer’s account, thus causing significant delays.
Furthermore, some receiving banks outside of Eswatini, charged additional fees to process these payments into the customer’s account, over and above the transactional fees collected in-country where the transaction was initiated.
In this regard, the CBE liased with the SARB to engage South African banks to allow payments to be sent and received within the usual and expected speed and cost, thereby guaranteeing the free flow of funds within the region. These provisions/relaxations were already being implemented for payments coming into Eswatini.
As of October 4, 2024, the SARB implemented these relaxations, through a directive to South African banks, which will mark the start of seamless transactions between Eswatini and South Africa.
For individuals, transactions below R1 000 000 (E1 million) flowing into South Africa, will no longer be affected, provided that all the required details, including the purpose of the transaction, are clearly and unambiguously disclosed in the payment customer transfer message.
For corporates, transactions below R5 000 000 (E5 million) flow into South Africa.
CBE’s Head – Strategy and Communication Mandla Luphondvo thanked the public and business community for their patience as the Bank addressed these challenges.
“We appreciate the feedback we received and are pleased to inform the public that as per the new guidelines, transactions to South Africa should no longer be impacted by delays and high costs. Further, the Central Bank of Eswatini will continue to monitor progress to ensure that there is improving customer experience, when it comes to sending money to South Africa,” he stated.
Luphondvo further discouraged the public from utilizing unlicensed entities or individuals to send money across borders as it carries a huge risk of losing hard-earned income. Furthermore, this is a violation of the Financial Institutions Act which stipulates that only licensed institutions can provide such services to the public.
