CBN Targets Serial Offenders With Proposed Five-Year Ban on Dud Cheque Issuers

The Central Bank of Nigeria (CBN) has released an exposure draft of its proposed Guidelines on the Treatment of Dud Cheques, introducing stringent penalties—including a five-year ban—for individuals who repeatedly issue dud cheques.

Under the draft policy, a bank customer will be classified as a serial offender after issuing dud cheques on three separate occasions due to insufficient funds. Once designated, offenders will be blacklisted and barred from accessing the cheque clearing system, restricted from opening current accounts, and denied credit facilities from any financial institution for five years.

Banks and other financial institutions will also be mandated to recover unused cheque booklets from affected customers and document their records with the Credit Risk Management System (CRMS) and at least two private credit bureaux. Returned-cheque charges will apply in line with the national Guide to Charges.

The CBN warned that repeat offenders will face even stiffer consequences. Anyone who issues another dud cheque after completing an initial five-year sanction will receive an additional five-year ban for each subsequent violation.

Unbarring will only be permitted after the sanction period lapses or if a bank confirms that a reported dud cheque was recorded in error. In such cases, the financial institution must update the customer’s status with credit bureaux and formally notify them once the restriction is lifted.

The proposed guidelines also impose penalties on financial institutions that fail to comply. Banks that neglect to enforce the restrictions will face fines of at least ₦5 million, while those that open current accounts without conducting CRMS checks will be penalized a minimum of ₦3 million.