CBN Proposes Five-Year Ban on Repeat Dud Cheque Offenders

The Central Bank of Nigeria has released draft guidelines proposing tougher sanctions against individuals who repeatedly issue dud cheques. The new framework seeks to strengthen financial discipline, restore confidence in cheque usage, and ensure stricter compliance across the banking system.

Under the draft rules, banks must report dishonoured cheques to the Credit Risk Management System and at least two credit bureaus within one hour of confirmation. Customers must be notified within two working days, and banks are required to retain copies of dishonoured cheques for at least five years.

Read Also:

• CBN Takes Control of Fixed Income Market in November
• TAJBank Surpasses CBN’s Recapitalisation Requirement Ahead of Deadline

A customer who issues three dud cheques across the banking system will be classified as a serial offender and automatically barred for five years from accessing the clearing system, opening current accounts, or obtaining credit facilities. The guidelines further stipulate that if such a customer reoffends after completing the initial ban, another five-year restriction will be imposed for each subsequent offence, with no upper limit.

The draft also introduces penalties for banks and credit bureaus that fail to comply. Infractions such as failure to report incidents, notify customers, or conduct mandatory status checks could attract fines ranging from ₦1 million to ₦5 million per incident, depending on the institution type. Credit bureaus may face fines of up to ₦2 million for incomplete records.

The exposure draft is currently open for stakeholder feedback and represents part of the CBN’s broader efforts to deter abuse, protect the payments system, and enforce accountability in financial transactions.