Deposit Money Banks processed dud cheques valued at N166bn issued by customers between January and December 2012, the Central Bank of Nigeria has disclosed.

The value, according to the central bank, shows that the “enormous volume of dishonoured cheques in the financial sector has shown no sign of abating.”

As a result, the bank said it would collaborate with commercial banks and law enforcement agencies, including the Economic and Financial Crimes Commission, to investigate and prosecute errant bank customers.

The CBN, in a circular to banks and other financial institutions, which was on its website on Wednesday, said the implication of the development was the low confidence generated in the use of financial instruments that was adversely affecting its ‘Cash-Lite’ policy aimed at reducing the volume of cash-based transactions in the country.

The circular signed by the Acting Director, Financial Policy and Regulation Department, CBN, Mr. Y. B. Duniya, noted that over indulgence of cash in the economy tended to increase the cost of banking services.

The central bank said the development was also capable of raising the incidence of crime and facilitating money laundering by obliterating the audit trail.

The circular read in part, “It is on this note that the bank, in liaison with financial institutions and law enforcement agencies, has taken steps to stem the tide of dud cheque issuance as it will adversely affect the stability of the financial system, if left unchecked.

“Customers of financial institutions should be informed that, henceforth, the CBN, in order to check this malaise in the banking sector, will forward the account details of errant customers to the Economic and Financial Crimes Commission for further investigation and prosecution.”

Consequently, Duniya said financial institutions were requested to ensure that prospective customers (at the point of account opening) and existing customers pledged not to issue cheques against unfunded accounts.

By way of enforcement, the bank said financial institutions were required to monitor cheques against unfunded accounts in three instances with effect from the date of the letter, and render monthly report vide the attached format on the letter.

The monthly report, according to the circular, is expected to be forwarded to the Director of Financial Policy and Regulation Department, CBN.

The circular also required banks to report the affected customers’ profile, transactions history and also attach copies of both the front and back of the financial instruments used.

According to the CBN, the latest circular follows an earlier one dated August 24, 2012, which requested banks to make monthly rendition of dud/dishonoured cheques.

Source: http://www.punchng.com/business/business-economy/customers-issued-n166bn-dud-cheques-in-2012-cbn-efcc-to-arrest-dishonoured-cheque-issuers/


This is a criminal offence anywhere in the world so dud Cheque issuers start preparing for EFCC arrest... Nairalander's what do you think? IMO its a welcome development to check fraud.