Three bounced cheques can now freeze your access to credit for five years

According to new Central Bank guidelines, if you issue three cheques that bounce due to insufficient funds, you’ll be met with a five-year banking ban. The new rule, released in November 2025, is designed to curb the rising wave of dud cheques, cheques that bounce due to insufficient funds.

Customers classified as serial dud cheque issuers will lose access to the clearing system (a framework that facilitates the exchange and settlement of payments between banks, such as cheques and automated clearing house instruments), be denied all forms of bank credit, and be barred from opening current accounts for at least five years.

The crackdown comes at a time when cheques, once considered outdated in a digital-first payments market, are quietly staging a comeback. The value of issued cheques reached ₦5.15 trillion ($3.55 billion) in Q1 2025, up 51.43% from the same quarter in 2023, highlighting both renewed usage and the gaps the CBN says it now aims to address.

“The latitude with which some customers of banks and other financial institutions have continued to issue dud cheques on their accounts, despite the provisions of the Dishonoured Cheques (Offences) Act, 1977 (the Act) and the CBN’s regulations and circulars issued over the years, has made it imperative for the CBN to implement further measures to dissuade the issuance of dud cheques,” the apex bank said.

Banks are required to report dud cheques within one hour to the CBN’s Credit Risk Management System or any other platform as may be determined by it, and to at least two credit bureaus. They must also notify affected customers within two working days.

Banks that fail to report dud cheques, neglect to notify customers, ignore database checks before opening current accounts, or fail to cancel remaining cheque leaves of barred customers will face minimum penalties ranging from ₦2 million ($1,375.67) to ₦5 million ($3,439.17) per infraction. The harshest fine, ₦5 million ($3,439.17), applies when a bank fails to enforce restrictions on a serial offender.

The CBN also noted that the executive compliance officers and chief technology officers of financial institutions will be held personally accountable for breaches. These measures are designed to “promote integrity and confidence in the use of cheques as a reliable means of payment,” the regulator said.

The new guideline replaces all previous circulars on dud cheques and is part of recent moves by the apex bank to tighten its grip on the financial ecosystem.