Compulsory check payment to compel 16,000 importers to justify “from where did you get this!”

The obligation to pay by check, beyond certain thresholds, officially went into force Wednesday, July 1st 2015 in Algeria. Every day, some practices will undoubtedly change. “Echorouk” got in touch with economists and banking sources in order to shed light on the upcoming changes to be brought about by this governmental decision about the introduction of the compulsory check payment.

Regarding for instance the purchase of new vehicles from dealers, no sale is accepted of an amount equal to or greater than 1 million dinars. Banks no longer accept cash payments on the accounts of dealers. This prohibition also applies to payments in advance (or payment by installments), for a transaction whose total reached the threshold of 1 million DA, says our interlocutor Ali Bey Nasri.

He said, that small cars whose price is below this amount are not affected, according to our source. For people who do not have a bank account, the bank “first opens their account prior to the transaction,” the source added.

Asked about the impact of these measures on the increase in planned banking, our interlocutor  believes that this is “just the beginning”, but it’s a step in the right direction with the prime focus being on the monitoring of the numerous trade transactions carried out by thousands of importers.

However, it considers that this “will not create many new accounts,” but decrease significantly “the use of cash in certain transactions”, especially for customers who already have a bank account.

This improves the banking rate, reducing transactions outside the banking system. As such, it is difficult to give an estimate of the amounts that banks can capture, according to our source. It depends on the situation: for example, car sales tend to stagnate now, the source said.

It should be also noted that the new regulation applies only threefold for now: dealers, non-financial corporations (lawyer’s office, jewelers …) from 1 million dinars and finally, real estate transactions from 5 million dinars.
As for the real estate purchases, it is the notary who must no longer accept cash transactions. Banks have a minimal role in this area.

Indeed, customers will still have the right to file amounts of liquid money on their accounts. Unlike any suspicious transaction will be easier to detect.

Thus, the banks will notify the customer and shall report any unjustified operation (in terms of wages, for example) to the Financial Intelligence Processing Unit (CTRF). This improves the traceability of banking, increasing the number of operations that are performed in the official circuit.