DARA at the heart of transaction confirmation

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Muluken Amare

The Document Registration and Authentication Agency (DARA), which introduced strong transaction confirmation in its operation has demanded integration from the relevant government bodies for accuracy on the authentication process especially that of non-moveable assets.
The agency disclosed that it has been conducting a study that will come up with targets for the government to expand the currency circulation via banking systems. This comes after the National Bank of Ethiopia (NBE) introduced the maximum cash withdrawal directive in May 2020.
Muluken Amare, Director General of DARA, said that for the past couple of months his agency has been conducting ways on how to better link its operation with the banking system.
The NBE directive limits the daily withdrawal to 200,000 birr for individuals and 300,000 birr for companies and one million birr and 2.5 million birr per month respectively.
“The directive aims to accelerate the banking system and therefore we have to stand by it,” Muluken told Capital.
He said that based on the study the agency has decided to get confirmation of the transfer of money from the buyer’s account to the seller’s account from banks for authentication of any transaction including movable assets, which is mostly of vehicles and non-movable assets. The transaction confirmation similarly applies to the latest government move to change the banknotes with new currency.
As a result, for any authentication process clients should come up with bank transfer slips that show the transaction from September 17.
“This also applies to borrowers, that is, individuals or companies that borrow from one another and demand endorsement from DARA,” Muluken added.
However, in the past the agency was not confirming such transactions.
Muluken said that on movable assets the relevant government office, that is, mostly the transport bureau, gives transaction estimation for the settlement of two percent sales fee settlement.
“For purposes of accuracy in transaction of matters non-movable property, phony identification transaction and transfer slips the public office is normally involved,” the Director General said.
Some sector experts told Capital that with regards to non-movable property that mostly includes a house, plot, or a lease the right transaction of the actual trading might be higher than the transfer that is reflected on the bank statement.
“For instance an individual may agree to buy a house worth 10 million birr from a seller but he may transfer the 2 million birr from account to account and pay the remainder in hard cash. In this scheme the agency might not get the real transaction estimate and is left at a disadvantage to meet its targets,” the sector experts told Capital.
Muluken agreed with this argument and said that it is supposed to be supported by relevant government offices and that a good example would be that of transaction of vehicles.
“Most probably city administrations or the municipality shall estimate the price of properties in this case,” he added.
The Director General said that the scheme is relatively new and gaps are spotted along the way and as the challenges sprout solutions will be provided on the move.
“We considered unforeseen situations in our operations, for instance on the real estate transaction, clients may pay in phases for many years yet they may not receive their home. In this case we shall consider the bank transactions and the payments that were settled on cash to real estate companies,” he explained.
In the new scheme DARA has also suspended the authentication of gifts for an undisclosed period.
“We suspended this operation because it is vulnerable to illegal actors who may launder their money on this currency change period,” Muluken said.
According to Muluken, authenticating gifts, mostly houses, is insignificant operation to DARA however because of its responsibility to serve the public on all fronts, these operations will be started in the near future with the new scheme.
Power of attorney is the major operation of the agency which managed 826,000 cases in the past budget year. In the stated period DARA has provided service for 1.5 million clients. Its current daily service covers 6,100 clients.
DARA has continually led in introducing modern services to its authentication and documentation process. In the last budget year it introduced QR Codes for its processes.
Similarly, the new security features are an additional proof of maximizing the recording of documents unlike the traditional authentication scheme that is mainly based on stamps.
“In the past someone who had a fake ID would try to get the power of attorney and may use the forged documents to abuse this right by taking other peoples’ property without their knowledge. Now that the QR Code has been introduced it has been of great aid in the verification procedure. Furthermore, in the past, banks used to send their staff to DARA to authenticate the documents, which took time, effort and money, but the new system has got rid of this,” he added.
The digital transformation at DARA was launched at the beginning of this budget year and almost all documents in this year’s record are in softcopy. DARA, which is the federal agency, has 14 branches including one in Dire Dawa.