DISHONOURED CHEQUES (OFFENCES) ACT

An Act makes it a criminal offence to issue a cheque knowing it will be dishonoured due to insufficient funds or unjustified countermand. It targets individuals issuing such cheques and banks reporting them. This deters fraud in commercial transactions.

What Is This Policy?

An Act making it a criminal offence to issue a cheque knowing that it will be dishonoured due to insufficient funds or because the drawer has countermanded payment without valid reason.

Who Does It Target?

Persons issuing cheques in Nigeria Banks reporting dishonoured cheques EFCC and Police investigating cheque fraud Payees holding dishonoured cheques

What Does It Aim to Achieve?

Protect commercial transactions from fraud and bad faith by criminalising the deliberate issuance of bad cheques, deterring cheque fraud in Nigeria's financial system.

Key Features

Criminal Offence: Issuing a cheque knowing it will not be honoured is a specific criminal offence. Penalties: Conviction carries a fine or imprisonment of up to 2 years. Presumption: Dishonour within a prescribed period creates a rebuttable presumption of knowledge. Reporting: Banks must report patterns of dishonoured cheques to CBN.

Current Status

Rollout Stage: Active Coverage: Nationwide cheque transactions Beneficiaries: Commercial transaction security; payees Funding: Federal Government

How to Access

Report dud cheques to the Police with the cheque as evidence File a civil suit for the cheque amount in addition to criminal complaint Banks must assist in identifying account details for prosecution Application method: Report to the Nigeria Police Force with the dishonoured cheque.

Important Terms

The offence requires knowledge that the cheque will be dishonoured Countermanding payment without valid reason may also constitute an offence CBN's GSI mechanism provides a complementary civil remedy for bank loans

Official Resources

Website: https://www.cbn.gov.ng Contact: Central Bank of Nigeria (CBN) / Nigeria Police Force

Legal Framework

Enacted under the legislative powers of the National Assembly as the Dishonoured Cheques (Offences) Act (Cap D11 LFN 2004). Operates alongside the Bills of Exchange Act (Cap B8 LFN 2004), the Criminal Code Act on fraud offences, and the Banks and Other Financial Institutions Act (BOFIA) 2020. Aligns with Central Bank of Nigeria guidelines on cheque clearing and the Nigeria Inter-Bank Settlement System (NIBSS) standards.