CBN to Blacklist Issuers of Dud Cheques

The Central Bank of Nigeria (CBN) yesterday reiterated that any individual or organisation that issue bounced or dishonoured cheques on three occasions would be blacklisted and barred from “having anything to do with the banking system.”

The CBN Deputy Governor, Corporate Services, Alhaji Suleiman Barau, said the apex bank intends to create a situation where such incidence would be formally reported to

law enforcement agencies including the Economic and Financial Crimes Commission (EFCC) for prosecution.

He said blacklisting such individuals or corporate entities who engage in issuing dud cheques had "a salutary effect of discouraging other people who may want to take advantage of the laxity in enforcement to go the route you’ve gone."

Speaking in Abuja at the opening of a two-day National Stakeholders' Workshop on Dishonoured Cheques in Nigeria, the CBN deputy governor said: "What that does is that you are marked as somebody who has the propensity to run down the banking system."

Represented by the CBN Director, Legal Department, Mr. Simon Onoketu, Barau said: "We expect that once the arrangements we are putting in place works, we’ll get to a point where people will know that if you go on issuing dud cheques, you are likely to end up in prison even using the law that we have on ground right now, we know how long it takes for the legislative process to go through but it is a good thing that we are discussing now because as we noted, there are a lot of laws with the law as we have it."
He said the menace of bounced cheques had the potential of eroding confidence in the banking sector as well as discouraging Foreign Direct Investment (FDI), adding that the CBN intends to create a system where dud cheques are discouraged.

Meanwhile, stakeholders unanimously argued that the Dishonoured/Dud Cheques Act of 1977 was no longer in tandem with current realities and called for an outright review for the war against dishonoured cheques to be won.

A Commissioner with the Law Reform Commission, Prof. Osaremen Osunbor, in a key lecture said a situation where culprits of dud cheques were allowed an option to pay a fine of the sum of N5,000 as stipulated by the existing Act was counter-productive and ineffective in the present economic reality because the value of the Naira had since depreciated as a result of inflation.

He also argued the current definition of dud cheques needed to be clarified and expanded to go beyond the notion of having insufficient funds in the issuer's bank account.

According to him, those who issue such cheques could deliberately append irregular signatures including other conscious errors to cause their cheques to bounce.

Noting that though existing laws had managed to reduce the incidence of dud cheque issuance, he said it had not been eradicated.

Osunbor said there was need to revisit the two-year imprisonment term, which had the option of fine as stipulated by the Act.

He challenged the CBN to do more to reduce the menace to the barest minimum by mandating banks and victims to report all incidences of bounced cheques.

Also speaking at the occasion, the Chairman, Independent Corrupt Practices and Other Related Offences (ICPC), Mr. Ekpo Nta, said there had been increased cases of dishonoured cheques in the commission in recent times. This, according to him, could affect the image of the country as well as the atmosphere for doing business in the country if allowed to continue.