BoG bans 245 businesses, 47 individuals from issuing cheques

The Bank of Ghana (BoG) has announced sanctions against 245 businesses and 47 individuals for breaching its rules on the issuance of dud cheques.
According to a press statement issued by the BoG, the affected bank customers issued dud cheques on at least three occasions between January 2022 and January 2024, despite repeated warnings about the consequences of their actions.

Legal framework and offences
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 years for any person to issue a dud cheque.
The BoG cited Notice No. BG/GOV/SEC/2021/03 dated March 11, 2021, which outlines the regulations concerning dud cheques.
Despite this, BoG observed with grave concern the high issuance of dud cheques by some customers of banks and SDIs.

Sanctions imposed

As a result of the breaches, the regulator disclosed that the offenders are banned from issuing cheques in Ghana for three years, effective June 28, 2024.
Additionally, they are prohibited from accessing new credit facilities from the country’s banking system for the same duration.
“The sanctions are without prejudice to any legal proceedings that may be taken against the offenders under Ghana’s criminal code,” the BoG stated.

Responsibilities of banks and SDIs
Banks and Specialised Deposit-Taking Institutions (SDIs) whose customers were involved have been directed to notify the culprits of the ban and recall all unused cheque books from them.
The institutions are also prohibited from issuing new cheque books to the affected customers until the sanctions are lifted. The BoG’s statement further cautioned the public against issuing dud cheques, emphasizing that the offence carries both legal and regulatory consequences.
“Bank of Ghana will continue to monitor the payment system space closely and is committed to the promotion of the integrity and soundness of the financial system,” the statement concluded.

Revised sanctioning regime
In 2021, the BoG revised the sanctioning regime in respect of the issuance of dud cheques for strict compliance by banks and SDIs.

First offence
A bank or SDI shall issue a warning notification to a customer who issues a dud cheque for the first time and report the offence to the credit reference bureaux.
The bank shall place the customer under surveillance for a minimum period of three years.
The warning should be documented and may be in the form of an SMS, email, or any other established means of communication between the bank or SDI and the customer. The notification shall also indicate further sanctions that will be applied in the event of subsequent breaches.

Second offence
Where a customer issues a dud cheque for the second time within three years of the first offence, the drawee bank or SDI concerned, in addition to the above sanctions, shall report the conduct of the customer to the BoG.
The customer’s details and breach shall be recorded in a dud cheque register maintained at the BoG.

Third ofence
Where a customer issues a dud cheque on a third occasion within three years of the first offence, the drawee bank or SDI concerned, in addition to the above sanctions, shall again inform the BoG.
The BoG shall ban such a customer from issuing cheques within the country for a minimum period of three 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.
The customer may, however, be permitted to receive cheques and funds into the affected account and perform other electronic transactions on the account.
Additionally, the BoG shall ban such a customer from accessing new credit facilities from the banking system for a period of three years.

Notification and compliance
Upon receipt of the notification of the ban by the BoG, the drawee bank or SDI shall notify the customer within five working days of the ban, recall all unused cheque books, and shall not issue new cheque books to the affected customer until the sanctions are lifted.
Where a customer fails to return the unused cheque books within a period of ten days from the notification date, the customer shall be reported to law enforcement agencies for further action.
These sanctions aim to uphold the integrity of the financial system and serve as a deterrent to others who might consider engaging in similar activities.