The Central Bank of Nigeria has unveiled a draft of new regulatory guidelines aimed at curbing the issuance of dud cheques and strengthening financial discipline across the banking sector.
The proposed framework was released on Monday for industry review.
It is contained in an exposure draft titled Guidelines on the Treatment of Dud Cheques by Banks and Other Financial Institutions in Nigeria.
DAILY POST reports that among the key provisions is a five-year ban for customers who repeatedly issue dud cheques, with the CBN defining a serial offender as anyone who issues three dishonoured cheques across the banking system.
The document also introduced stricter penalties for banks and other financial institutions.
Importantly, infractions such as failing to report a dud cheque within the stipulated timeframe, not notifying affected customers, opening accounts without proper status checks, or neglecting to cancel unused cheque leaves could attract fines ranging from N1 million to N5 million per incident.
According to the draft, once a cheque is confirmed to be a dud due to insufficient funds, the issuing bank must report the incident to the Credit Risk Management System and two licensed credit bureaux within one hour. Institutions must also notify the customer within two working days using a verifiable communication channel and retain copies of dishonoured cheques for at least five years.
Banks will additionally be required to warn account holders about the consequences of issuing dud cheques before issuing cheque books, a measure intended to strengthen due diligence and reduce misuse at the onboarding stage.
The proposed guideline, issued under the CBN Act 2007 and the BOFIA 2020 framework, is expected to replace all previous circulars on dud cheque administration.
It aims to tighten compliance measures, restore trust in cheque transactions and reduce persistent abuses that regulators say continue despite longstanding legal controls.
Eze Chidiebere Paul
I'm dedicated to creating high-quality content that informs, inspires, and delights. If you have any questions or suggestions, don't hesitate to get in touch. Happy reading!
