The Central Bank of Nigeria has introduced stringent new measures targeting individuals who repeatedly issue dud cheques, proposing a comprehensive five-year banking ban for serial offenders.
Strict Penalties for Repeat Offenders
According to draft guidelines released on Monday, November 25, 2025, the CBN defines a serial dud cheque issuer as any customer whose cheques bounce due to insufficient funds on three separate occasions. The apex bank's exposure draft titled 'Guidelines on the Treatment of Dud Cheques' outlines severe consequences for those who fail to maintain adequate funds for their cheque transactions.
Individuals blacklisted under this new regulation will face comprehensive financial restrictions including being barred from accessing credit facilities from any banking institution in Nigeria. They will also be prohibited from opening current accounts and lose access to the cheque clearing platform entirely for the duration of the five-year sanction period.
Bank Responsibilities and Enforcement Measures
The CBN has mandated all financial institutions including commercial banks, merchant banks, non-interest banks, mortgage banks, and microfinance banks to strictly enforce these sanctions. Banks are required to retrieve all unused cheque booklets from affected customers and upload their details to the Credit Risk Management System (CRMS).
Financial institutions must also report offenders to at least two licensed private credit bureaus, ensuring the information is widely available across the financial system. The guidelines further specify that banks must impose standard returned cheque charges as contained in the national Guide to Charges.
For customers who return to the system after completing their ban and issue another dud cheque, the CBN proposes even harsher measures. Each repeat offence will attract an additional five-year restriction, creating a progressive penalty system for habitual offenders.
Heavy Fines for Non-Compliant Banks
The central bank has established significant financial penalties for banks that fail to enforce the new regulations. Institutions that neglect to apply the required restrictions will face a minimum fine of N5 million, while banks that open current accounts without first checking a customer's CRMS status will be fined N3 million.
A customer can only be removed from the blacklist after the sanction period expires or if a financial institution confirms that a previous report was made in error. Upon removal of restrictions, banks must formally notify the customer and update all relevant credit bureaus accordingly.
The proposed guidelines aim to strengthen financial discipline and safeguard the integrity of Nigeria's cheque clearing system. This move comes amid numerous reported cases of businesses suffering losses from cheque fraud, where goods or services are provided based on cheques that subsequently bounce due to insufficient funds.
This initiative follows the CBN's August 2025 directive that required banks to stop instant alerts for cheque payments from other banks until the cheques are fully processed and cleared. That measure was designed to strengthen financial security and reduce losses from fraudulent cheque issuers.
