Godwin Emefiele plans to give teeth to the law against issuance of dud cheques from July 1, which will see the prosecution of violators, big and small, being sent to jail upon conviction.
It remains to be seen, however, if banks will turn in defaulting networth customers for prosecution or continue to shield them for the sake of business relationships that guarantee a buoyant bottom line.
Godwin Emefieleemefiele
Part of the 10-point agenda of the new Central Bank of Nigeria (CBN) Governor, who came to the hot seat on June 2, is the full implementation of the cashless policy introduced by his predecessor, Lamido Sanusi.
The law banning dud cheques was made in 1977, and was planned for review in November 2013 by Sanusi.
Emefiele also wants to enhance expertise in banking supervision, develop a national credit scoring system and keep a data base of borrowers.
TheNiche learnt that the CBN has directed all deposit money banks to identify and report customers who have issued worthless cheques on three occasions since July 5, 2013.
The information will be forwarded to the Economic and Financial Crimes Commission (EFCC) for investigation and prosecution under the Dishonoured Cheque Act.
The law makes it an offence to issue a cheque against an unfunded account and stipulates for violators two years’ imprisonment without an option of fine.
However, nobody has been convicted under this penal code, leading to rising cases of customers issuing cheques against unfunded accounts knowingly or unknowingly.
To curb the practice, which the CBN says undermines confidence in the cashless policy, culprits now have to face the law.
Last year, the CBN announced that it processed in 2012 alone, more than 167,000 dud cheques valued at N166 billion.
It issued a circular on July 5, 2013 urging banks to advise customers against issuance of worthless cheques.
This prompted financial institutions to sensitise customers, mindful of the impact dud cheques on the stability of the financial system in the nationwide implementation of the cashless policy.
The CBN disclosed in the circular that, in collaboration with financial institutions and law enforcement agencies, it had taken steps to stem the tide of issuance of bad cheques, which would 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,” the circular warned.
Notices issued by banks have one central message to all customers.
One put out by Diamond Bank reiterated that the directive is to check the issuance of dishonoured cheques, which has been on the increase, resulting in low confidence in the acceptance of cheques as a payment method, thereby undermining the cashless policy of the CBN.
“As a valued customer of Diamond Bank, we advise that you ensure your account is adequately funded before issuing a cheque to a third party to prevent your cheque from being dishonoured,” it warned.
The notice from Sterling Bank read in part: “The CBN has observed an increase in volume of dishonoured cheques in the financial sector and has emphasised the need to build high confidence in the use of financial instruments.
“This will positively impact the ‘Cash-lite’ policy which is aimed at reducing the volume of cash-based transactions in Nigeria.
“Subsequently, CBN has directed all banks to provide details of customers that issues dud cheques on any three instances. Customers would also be required to sign an undertaking to comply with the CBN policy on non-issuance of dud cheques.”
Sterling Bank requested customers to fund their accounts before issuing third party cheques and to confirm cheques through their relationship manager to ensure the instruments are duly processed.
It advised customers to use e-banking channels (internet banking, Sterling Mobile, ATM services) to view their account details before issuing a cheque.
Guaranty Trust Bank also informed customers to have funds in their accounts before issuing a cheque to a third party, and to also confirm all cheques via internet banking or relationship manager, to ensure the cheque is honoured.