A combined photo of CBN headquarters and logo
By Shade Damiro
The Central Bank of Nigeria (CBN) has proposed a five-year ban for customers who repeatedly issue dud cheques, as part of a new guideline aimed at promoting market discipline and boosting public confidence in cheque-based payments.
The proposal is part of a draft guideline released on Monday, inviting stakeholders to provide feedback within the next three weeks.
A dud cheque is a cheque that is bounced due to insufficient funds while serial offenders are customers who issue three dud cheques within the financial system.
They face a five-year ban from: using the cheque clearing system, accessing credit, and opening current accounts.
Banks and other financial institutions are required to report dud cheque incidents to the CBN’s Credit Risk Management System within an hour and file records with at least two licensed private credit bureaus.
Affected customers must be notified of the dishonour within two working days using reliable channels.
The CBN aims to promote market discipline, raise risk management standards, and boost public confidence in cheque-based payments.
The guideline is designed to prevent payment failures that could harm institutional balance sheets and erode stakeholder trust.
The CBN invites stakeholders to provide feedback on the draft guideline within the next three weeks.
The full draft can be found on the CBN website, reflecting the institution’s commitment to open consultations and stronger financial system governance.
The new set of guidelines, released on Monday in Abuja, reflect a stronger compliance stance across the financial services sector, with the apex bank inviting stakeholder feedback to shape a more robust and transparent implementation framework. The consultation will stay open for comments over the next three weeks.
According to a statement signed by Rita I. Sike, Director of the Financial Policy and Regulation Department of the CBN, the exposure draft strengthens the CBN’s supervisory role under the Central Bank of Nigeria Act 2007 and the Banks and Other Financial Institutions Act 2020.
It updates previous guidelines on handling dud cheques, aiming to promote market discipline, raise risk management standards, and boost public confidence in cheque-based payments.
The move highlights ongoing industry concern that issuing dishonoured cheques keeps damaging trust, slowing settlement processes, and weakening credit assurance in the banking sector.
While Nigeria’s Dishonoured Cheques (Offences) Act of 1977 already outlines criminal penalties, including jail time, the CBN’s new proposal signals a move toward regulatory deterrence.
For years, policymakers and legislators have argued over whether punitive approaches work, as shown by a 2023 Senate bill that suggested fines instead of prison terms.
The latest draft, however, focuses on operational measures that limit banking access for repeat offenders, framing the guideline more as a preventive compliance tool than a strictly criminal one.
