The Bank of Ghana (BoG) has outlined a progressive penalty regime for customers who issue dud cheques, with sanctions escalating from fines of 10% of the cheque’s value for a first offence to a ban on issuing cheques and accessing new credit facilities for repeat offenders.
Under the revised dud cheque rules, a cheque is considered a dud cheque when there are insufficient funds in the customer’s account to honour the amount stated on it. The bank will reject and return the cheque unpaid, while the account holder may also face legal action.
For a first offence, the customer’s bank is required to impose a penalty equivalent to 10% of the face value of the cheque. The customer will also receive a warning notification outlining the consequences of repeating the offence.
The offence must additionally be reported to the Credit Reference Bureaus (CRBs) and the Bank of Ghana.
The financial penalty increases to 15% of the cheque’s face value if the customer issues a second dud cheque within one year of the first offence.
The second offence must also be reported to the Credit Reference Bureaus (CRBs) and the central bank, with the customer receiving another warning on the consequences of further breaches.
For a third offence within one year of the first, the penalty rises to 20% of the cheque’s face value.
At this stage, the sanctions extend beyond financial penalties. The Bank of Ghana will ban the customer from issuing cheques for at least three years and from accessing new credit facilities from the banking system for one year.
The central bank will also notify all banks and Specialised Deposit-Taking Institutions of the ban.
BoG says adverse reports to credit reference bureaus could affect a customer’s creditworthiness, potentially making borrowing more difficult and expensive in the future.
The consequences may include a poor credit score, higher borrowing costs and limited access to funds.
Once a bank receives notification of a cheque-issuing ban, it must notify the affected customer within five working days. The bank is also required to recall all unused cheque books and refrain from issuing new ones until the sanction is lifted.
The central bank has further warned that customers who fail to return unused cheque books within 10 working days of notification could face additional sanctions.
In such cases, the bank is required to report the matter to the BoG, which may ban the customer from operating any current account and add their name to the central bank’s Directory of High-Risk Cheque Issuers.
BoG is advising customers to check their account balances before issuing cheques and consider pending transactions that could affect available funds.
Customers have also been advised against issuing cheques based on funds they expect to receive later unless they are certain the money will be available in time. They are encouraged to keep records of issued cheques and their expected presentation dates and contact their banks promptly if they anticipate insufficient funds.
