CBN Moves to Clamp Down on Dud Cheques, Proposes 5-Year Ban for Repeat Offenders
The Central Bank of Nigeria (CBN) has unveiled a stringent draft guideline that seeks to impose a five-year restriction on individuals who repeatedly issue dud cheques. The policy, contained in the newly released exposure draft of the Guidelines on the Treatment of Dud Cheques, aims to curb rising cheque fraud and strengthen confidence in the nation’s payment system.
According to the document, any customer whose cheques bounce three times due to insufficient funds will be classified as a serial dud cheque issuer and automatically blacklisted. Those affected will face sweeping sanctions, including:
- A ban from accessing credit facilities across all banks.
- Suspension from the cheque clearing system.
- A prohibition on opening or operating current accounts for five years.
The apex bank also mandates financial institutions to immediately retrieve all unused cheque booklets from sanctioned customers and upload their details to the Credit Risk Management System (CRMS) as well as at least two licensed private credit bureaux.
The proposed guideline introduces even tougher measures for individuals who offend again after completing their initial restriction period. Each subsequent dud cheque incident will attract an additional five-year ban, further tightening regulatory controls around cheque usage.
Removal from the blacklist will only be granted once the sanction period lapses or if a bank confirms that a previous report was made in error. Upon clearance, financial institutions are required to notify the customer and update relevant credit bureaux.
Banks that fail to enforce the new rules will face heavy penalties, including a minimum fine of N5 million for neglecting required restrictions and N3 million for opening current accounts without cross-checking a customer’s CRMS status.
Cheque-related fraud remains a persistent challenge in Nigeria’s business environment, with several companies reporting financial losses after receiving cheques that were later found to be invalid. The central bank believes the new measures will help curb abuse and restore trust in cheque-based transactions.
The proposal follows an earlier directive issued in August 2025, in which the CBN ordered banks to discontinue instant alerts on cheques from other banks until the payments are fully cleared—a move designed to strengthen security and prevent premature release of goods and services.
The draft guideline is currently open for stakeholder review ahead of formal adoption.
