Nigeria's central bank has slapped a five-year prohibition on individuals who repeatedly bounce checks, barring them from clearing systems, credit facilities, and opening fresh accounts across financial institutions. Dr. Rita Sike from the Financial Policy and Regulation Department issued the directive, defining serial offenders as those who have dishonored checks due to insufficient funds on three separate occasions.
The new framework imposes steep fines on banks that fail to verify customer status before reporting violations, with commercial lenders facing minimum penalties of N2 million per breach, while microfinance institutions could pay between N100,000 and N1 million, depending on their tier. The apex bank aims to restore confidence in check-based transactions while establishing clear protocols for identifying violators and reporting them to credit bureaus.
Customers must maintain adequate balances before issuing checks, as the guidelines seek to enhance accountability and streamline dispute resolution between financial institutions and clients.
The new framework imposes steep fines on banks that fail to verify customer status before reporting violations, with commercial lenders facing minimum penalties of N2 million per breach, while microfinance institutions could pay between N100,000 and N1 million, depending on their tier. The apex bank aims to restore confidence in check-based transactions while establishing clear protocols for identifying violators and reporting them to credit bureaus.
Customers must maintain adequate balances before issuing checks, as the guidelines seek to enhance accountability and streamline dispute resolution between financial institutions and clients.
