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The Central Bank of Nigeria (CBN) has unveiled a draft policy introducing stricter penalties for individuals who repeatedly issue dud cheques, including a proposed five-year ban from key banking services.
According to the exposure draft of the Guidelines on the Treatment of Dud Cheques released yesterday, a customer will be classified as a “serial dud cheque issuer” after issuing cheques that bounce three times due to insufficient funds. Under this designation, offenders will be blacklisted by financial institutions for a period of five years.
The proposed sanctions are extensive. Offenders would be excluded from the cheque clearing system, barred from accessing credit facilities across all banks, and prohibited from opening current accounts during the sanction period. Financial institutions must also apply the standard returned-cheque charges outlined in the national Guide to Charges.
The CBN has mandated commercial, merchant, non-interest, mortgage, and microfinance banks to enforce all stipulated measures. This includes retrieving unused cheque booklets from offenders and filing detailed records on both the Credit Risk Management System (CRMS) and at least two licensed private credit bureaux.
The guidelines further prescribe escalating penalties for repeat violations. Customers who issue another dud cheque after completing an initial five-year ban will receive an additional five-year sanction each time the offence occurs.
Unbarring will only occur upon completion of the sanction period or in cases where erroneous reporting is verified. Upon expiry, banks must promptly update the customer’s status with credit bureaux and issue formal notifications.
Financial institutions that fail to comply face significant penalties, including a minimum fine of ₦5 million for not enforcing restrictions, and ₦3 million for opening a current account without verifying a customer’s CRMS status.
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