The Central Bank of Nigeria (CBN) is set to introduce a policy that would impose a five-year ban on customers who repeatedly issue dud cheques.

Under the proposed guidelines, a customer qualifies as a “serial dud cheque issuer” if they issue three cheques that are dishonoured due to insufficient funds.

The announcement came via an exposure draft of the CBN’s planned “Guidelines on the Treatment of Dud Cheques,” which authorizes banks and other financial institutions to blacklist such individuals.

Offenders would face several restrictions during the five-year sanction period, including:

• Denial of access to the cheque clearing system.
• Ineligibility for credit from any bank.
• Restriction from opening current accounts.

Banks would also be required to impose returned-cheque charges as specified in the national Guide to Charges.

All commercial, merchant, non-interest, mortgage, and microfinance banks are mandated to enforce the sanctions, retrieve unused cheque leaves, and record offenders on the Credit Risk Management System (CRMS) and at least two private credit bureaux.

For recalcitrant offenders, the guidelines prescribe additional five-year bans for any repeat violations after completing a previous sanction.

Unbarring conditions are limited to either the expiration of the sanction period or verified erroneous reporting by a financial institution. Banks must update the customer’s status with credit bureaux and issue formal notification once the ban expires.

The CBN also outlined penalties for banks that fail to comply, including:

• Minimum N5 million fine for failing to enforce restrictions.
• Minimum N3 million fine for opening a current account without checking a customer’s CRMS status.