The Central Financial institution of Nigeria has unveiled a draft of latest regulatory pointers geared toward curbing the issuance of dud cheques and strengthening monetary self-discipline throughout the banking sector.
The proposed framework was launched on Monday for trade evaluation.
It’s contained in an publicity draft titled Tips on the Remedy of Dud Cheques by Banks and Different Monetary Establishments in Nigeria.
DAILY POST stories that among the many key provisions is a five-year ban for purchasers who repeatedly concern dud cheques, with the CBN defining a serial offender as anybody who points three dishonoured cheques throughout the banking system.
The doc additionally launched stricter penalties for banks and different monetary establishments.
Importantly, infractions resembling failing to report a dud cheque throughout the stipulated timeframe, not notifying affected prospects, opening accounts with out correct standing checks, or neglecting to cancel unused cheque leaves might appeal to fines starting from N1 million to N5 million per incident.
In keeping with the draft, as soon as a cheque is confirmed to be a dud as a result of inadequate funds, the issuing financial institution should report the incident to the Credit score Threat Administration System and two licensed credit score bureaux inside one hour. Establishments should additionally notify the client inside two working days utilizing a verifiable communication channel and retain copies of dishonoured cheques for no less than 5 years.
Banks will moreover be required to warn account holders about the results of issuing dud cheques earlier than issuing cheque books, a measure supposed to strengthen due diligence and scale back misuse on the onboarding stage.
The proposed guideline, issued below the CBN Act 2007 and the BOFIA 2020 framework, is predicted to exchange all earlier circulars on dud cheque administration.
It goals to tighten compliance measures, restore belief in cheque transactions and scale back persistent abuses that regulators say proceed regardless of longstanding authorized controls.
