The Central Bank of Nigeria (CBN) has unveiled a draft guideline that would impose stricter sanctions on individuals who repeatedly issue dud cheques, including an automatic five-year ban for each repeat offence.
The move aims to strengthen financial discipline, tighten reporting standards, and restore confidence in cheque usage.
Released during the week for industry feedback, the Guidelines on the Treatment of Dud Cheques by Banks and Other Financial Institutions in Nigeria replaces all previous circulars on dud cheques and is anchored under the CBN Act 2007 and BOFIA 2020.
Under the proposed framework, a customer is classified as a serial dud cheque issuer after issuing three dishonored cheques across the banking system. Once designated, the Credit Risk Management System (CRMS) instantly notifies all financial institutions, triggering severe restrictions. Serial offenders would face a five-year ban from accessing the clearing system, opening current accounts, or obtaining credit from any bank.
The draft also introduces a renewable ban for repeat offenders. If a previously barred customer issues another dud cheque after completing their initial restriction, the person will face another five-year ban, with no upper limit on renewals, effectively locking persistent offenders out of the financial system for extended periods.
The guideline further imposes penalties on banks and credit bureaus for non-compliance. Banks could face fines of N1 million to N5 million per incident for infractions such as failing to report dishonoured cheques, not notifying customers, or opening accounts without conducting mandatory checks. Credit bureaus may be fined up to N2 million for failing to maintain or provide complete records of dud cheque issuers.
According to the CBN, the measures are intended to curb the continued abuse of cheques despite long-standing legal restrictions and ensure a more disciplined and transparent banking system.
This draft now awaits feedback from industry stakeholders before final implementation, signaling the CBN’s intent to clamp down on cheque fraud and protect the integrity of Nigeria’s payment system.