Stakeholders from the banking, law and various regulatory and financial crimes enforcement agencies have called for stiffer penalty for dishonoured cheques to stem the ugly trend in Nigeria.
The need for strong legislative and regulatory frameworks to contain the ugly trend of dishonoured cheques has been stressed by stakeholders from the banking, law and various regulatory and financial crimes enforcement agencies at a recent national workshop in Abuja.it was their consensus that the extant law - Dishonoured Cheques (Offences) Act (1977) is inadequate to curb the menace of dishonoured (dud) cheque that has grave economic consequences for the country.
Some of the shortcomings of the current law include the fact that for a cheque which was returned (dishonoured) to be an offence, "the cheque must be for an obligation", not when it is a gift. In addition, immovable items are not covered by the law and the payee who cannot get the value of the cheque must complain within three months. The enormity of the problem posed by dishonoured cheques can better be imagined as available figures from the CBN in 2013 alone, which is said to be conservative, is over 167,507 dud cheques with a monetary value of N166 billion. A simple rhyme in the advocacy material captures the essence of the workshop: "Bouncing a Ball is Fun, Bouncing a Cheque is Criminal".
Although Nigeria is adjudged as one the countries in the world with the highest number of laws, the will to enforce the relevant laws has been the bane of the country. For example the "Dishonoured Cheques (Offences) Act (1977) provides that it shall be an offence for a person to issue a cheque against a nonexistent or account with insufficient funds and stipulates two-year jail term without the option of fine for an individual and five thousand naira (N5,000) for corporate offender. But in practice cheques can be dishonoured on other grounds like irregular signature, date, etc, which may be deliberate.
It is on record that the only conviction under the law was the case of Bolanle Abeke versus the State (2007) where Justice Nick Tobi ruled on the case to lay to rest that the cheque was not meant for payment, the accused obtained credit and the payee presented the cheque within the stipulated period of three months.
Professor Oserheimen Osunbor, former governor of Edo state while delivering the keynote address which was called "workshop conundrum" said the proposed amendment to the extant law should criminalise other things that can make a payee not get value for his goods and services such as irregular signature which can even be deliberate on the part of the drawer. He agreed with the current two-year jail term for an individual offender but kicked against the N5,000 for corporate offender suggesting the N5,000 be raised to about N15 million. He was of the view that the offence could be under the Penal Code, Criminal Code, EFCC Act, ICPC Act, etc.
Osunbor said although modern (electronic) payment system such as automated teller machine (ATM), internet banking, etc reduce cheque payment, the use of cheque remains very relevant, adding that 'internet crime again should encourage cheque payment. He urged all stakeholders, especially the banks to report cases of issuance of dud cheques thrice in six months as required by law. Dipo Fatokun, Director, Banking and Payment Systems, Central Bank of Nigeria, (CBN) who was the resource person on the topic "overview of current regulatory framework for dishonoured cheques in Nigeria (CBN policy on dishonoured cheque): Role of the regulators, operators and issuer" said issuance of dishonoured cheques has severe implications for the economy particularly the cashlite policy of the present administration. This has made the apex bank to embark on sensitization campaigns to make the stakeholders and the general public see the ills of dishonoured cheques. In addition, CBN also issues circulars to banks from time to time to ensure strict compliance with relevant regulations.
Mr. Fatokun said the CBN has information on any dishonoured cheques, especially inter bank cheques and with the apex bank's collaboration with law enforcement agencies, which gave birth to "Fraud Forum" for over two years, such offenders are promptly sanctioned. According to him, the various stakeholders have their roles to play. "The operators suppose to educate their customers to know that the balance standing against their names may be different from the available balance. This can be done through the provision of efficient services to customers. The drawer on his part has a role of ensuring that he does not draw cheque on "unfunded account", update himself on bank policy and comply with bank advice.
Central Bank of Nigeria regulation on dishounoured cheque requires the banks to render returns to ensure that prospective customers and existing ones pledge not to issue dud cheques and banks are under obligation to forward erring customers' details to the EFCC and other security agents. There is also clearing house sanction for any bank that draws a cheque on another bank, which does not have value within 24 hours.
The way forward, according to Mr. Fatokun is more sensitization to ensure compliance by all stakeholders while sanction for non-compliance should be stringent such as placing embargo on such accounts and "name and shame".
Paul Ananaba SAN, a legislative draftsman while x-raying Dishonoured Cheque (Offences) Act 1977, said the law does not have "definition and interpretation" section, so that there is no definition of something as basic as a cheque. "The law was done hurriedly. The draftsman went into terrible error. You cannot convict anyone under that law". He said dishonoured cheque has done a lot of damage to the image of Nigeria and worsen the problem of green passport as well as lowered the drawer in the estimation of the payee (civil liability). In addition he suggested that there should be compensation for the payee.