Tag: Serial Dud Cheque

The Central Bank of Nigeria (CBN) is proposing a policy that would impose a five-year ban on individuals identified as “serial dud cheque issuers.” Under the draft guidelines, a person becomes a serial dud cheque issuer if they issue cheques three times that are returned due to insufficient funds. The CBN outlined the proposed measure in an exposure draft of its ‘Guidelines on the Treatment of Dud Cheques’, released yesterday, which would allow banks and other financial institutions to blacklist such offenders. According to the draft, individuals on the blacklist would be denied access to the cheque clearing system, barred from obtaining credit from any bank, and restricted from opening current accounts during the five-year sanction period. Banks would also be required to impose returned-cheque charges in line with the national Guide to Charges. All commercial, merchant, non-interest, mortgage, and microfinance banks are mandated to enforce the sanctions, retrieve unused cheque leaves, and report offenders’ details to the Credit Risk Management System (CRMS) and at least two private credit bureaux. The guidelines include stricter penalties for repeat offenders. Any person who issues another dud cheque after completing a five-year ban would face an additional five-year sanction for each recurrence. Lifting the ban would only be possible once the sanction period expires or if a financial institution verifies that a report was made in error. Banks are required to update the customer’s status with the credit bureaux and provide formal notification when the sanction ends. The CBN also proposed heavy penalties for non-compliant banks, including a minimum N5 million fine for failing to enforce restrictions and a minimum N3 million fine for opening a current account without checking the customer’s CRMS status.