BoG Tightens Punishments On Bounced Cheques

The Bank of Ghana has announced stiffer punishment for customers of financial institutions who issue dud cheques.

The new penalty regime includes a possible ban of offenders from using cheques in the country for three years.

According to the BoG, if a bank customer issues a cheque that “Bounces”, a bank or Specialised Deposit-Taking Institutions (SDIs) shall issue a warning notification to the customer for the first time and report the offence to the credit reference bureau subsequently.

The bank shall then proceed to place the customer under surveillance for a minimum period of three (3) years. The warning should be documented and may be in the form of a Short Message Service (SMS), an email or any other established means of communication between the bank or SDI and that customer. The notification shall also indicate further sanctions that will be applied in the event of subsequent breaches. 

“Where a customer issues a dud cheque for the second time within three (3) years of the first offence, the drawee bank or SDI concerned, in addition to the above sanctions under paragraph 1, shall report the conduct of the customer to the BoG and the customer’s details and breach shall be recorded in a dud cheque register maintained at the BoG,” the BoG statement read.

“Where a customer issues a dud cheque on a third-occasion within three years of the first offence, the drawee bank or SDI concerned…The BoG shall ban such a customer from issuing cheques within the country for a minimum period of three (3) years. The BoG shall notify all banks and SDIs of the ban and publish a list of all third offenders in two daily newspapers of national circulation, ” read the directives that were issued on March 11, 2021.

A dud cheque is a cheque that a person issues to a third party to supposedly withdraw money from his account even though the account does not contain enough funds to satisfy the cheque amount.

The Credit Reporting Act, 2007 (Act 726) makes it compulsory for banks and other deposit-taking institutions to report such incidents to credit reference bureaus in the country.

However, the Central Bank has become worried about a rise in the subculture of dud cheques despite existing prohibitions. In 2016, the issuance of dud cheques hit a four-year high, rising from 34,389 in 2014 to 55,665. It, however, dropped to 29,334 in 2017.

In 2018, the BoG banned 125 people from opening and operating current accounts with any bank in the country for three years after persistent issuance of dud cheques.

The apex bank reminded that under section 313(A) of the Criminal Offences Act, 1960 (Act 29) as amended, it is an offence punishable by a fine and/or imprisonment of up to five (5) years for any person to issue a dud cheque.


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