BoG Introduces Tougher Penalties for Dud Cheque Issuers

The Bank of Ghana (BoG) has introduced a progressive penalty regime for customers who issue dud cheques, with sanctions increasing from a 10% fine for a first offence to restrictions on cheque issuance and access to new credit facilities for repeat offenders.

Under the revised rules, a dud cheque is one issued without sufficient funds in the customer’s account to cover the stated amount. Such cheques will be returned unpaid, and the account holder could also face legal action.

For a first offence, the customer’s bank is required to impose a penalty equivalent to 10% of the cheque’s value. The customer will also receive a warning about the consequences of repeating the offence.

The incident must be reported to the Credit Reference Bureaus (CRBs) and the Bank of Ghana.

A second dud cheque within one year attracts a higher penalty of 15% of the cheque’s face value, alongside another warning and mandatory reporting to the CRBs and the central bank.

For a third offence within one year of the first, the penalty rises to 20% of the cheque’s value.

At that stage, additional restrictions will apply. The BoG will ban the customer from issuing cheques for at least three years and restrict access to new credit facilities from the banking system for one year.

The central bank will also notify all banks and Specialised Deposit-Taking Institutions about the ban.

Credit Access Could Be Affected

The BoG warned that adverse information reported to credit reference bureaus could negatively affect a customer’s creditworthiness.

Possible consequences include a poor credit score, higher borrowing costs and more limited access to credit.

Once a bank receives notification of a cheque-issuing ban, it must inform the affected customer within five working days. The bank must also recall all unused cheque books and stop issuing new ones until the sanction is lifted.

Customers who fail to return unused cheque books within 10 working days of receiving notification could face further sanctions.

In such cases, the bank is required to report the matter to the BoG, which may prohibit the customer from operating any current account and add their name to the Directory of High-Risk Cheque Issuers.

BoG Advises Customers

The central bank has urged customers to check their account balances before issuing cheques and consider pending transactions that could reduce available funds.

Customers have also been advised not to issue cheques based on funds they merely expect to receive unless they are certain the money will be available when the cheque is presented.

The BoG further recommends keeping proper records of issued cheques and their expected presentation dates, while contacting banks promptly if insufficient funds are anticipated.