The Central Bank of Nigeria (CBN) has released a draft of new regulatory guidelines aimed at curbing the issuance of dud cheques and promoting financial discipline in the banking sector. The proposed framework, issued for industry review, outlines stricter penalties for both banks and customers who issue dishonoured cheques.
Under the draft, customers who repeatedly issue dud cheques will face a five‑year ban. The CBN defines a serial offender as anyone who issues three dishonoured cheques across the banking system. Fines ranging from N1 million to N5 million per incident will be imposed for infractions such as failing to report a dud cheque within the stipulated timeframe or neglecting to cancel unused cheque leaves.
The guidelines require banks to report dud cheques to the Credit Risk Management System and two licensed credit bureaux within one hour of confirmation. Institutions must also notify affected customers within two working days using a verifiable communication channel and retain copies of dishonoured cheques for at least five years. Additionally, banks will 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.
Issued under the CBN Act 2007 and the BOFIA 2020 framework, the proposed guidelines aim to replace all previous circulars on dud‑cheque administration. The CBN hopes to tighten compliance, restore trust in cheque transactions, and reduce persistent abuses that regulators say continue despite longstanding legal controls. By promoting a more disciplined and transparent banking system, the new rules are expected to benefit both customers and financial institutions.
The introduction of these guidelines marks a significant step toward addressing the issue of dud cheques in Nigeria. Strengthening financial discipline and reducing fraud are crucial for maintaining a stable and trustworthy banking system. As the guidelines are finalized and implemented, the incidence of dud cheques is expected to decline, enhancing the overall integrity of the banking sector. The CBN’s move is a positive development for the Nigerian economy, and its impact will be closely monitored by stakeholders in the financial sector.
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