AfriPulse
November 25, (THEWILL) — The Central Bank of Nigeria (CBN) has mandated that commercial, merchant, and non-interest banks face a minimum penalty of N3 million if they fail to properly verify the status of customers before opening current accounts, according to new regulatory guidelines.
The directive, part of a broader push to tighten banking compliance and reduce financial risks from “dud cheques”, requires financial institutions to perform thorough status checks on customers using the Centralised Risk Management System (CRMS) or alternative platforms designated by the CBN.
Under the rules, banks are also required to review at least two previous current accounts for a customer before approving a new one.
In addition to the N3 million sanction for commercial banks, the CBN has imposed scaled penalties for smaller financial institutions. Primary Mortgage Banks (PMBs) must pay at least N1.5 million per violation, while microfinance banks face lower fines: N500,000 for national microfinance banks, N250,000 for state-level MFBs, N100,000 for Tier 1 unit MFBs, and corresponding amounts for Tier 2 units.
The new rules come in a circular titled “Guidelines on the Treatment of Dud Cheques by Banks and Other Financial Institutions in Nigeria”, issued and signed by Rita I. Sike, Director of the Financial Policy and Regulation Department at the CBN.
This guideline is currently in the exposure draft phase, allowing for stakeholder comments.
Under the proposed framework, repeat offenders would face stricter consequences. Customers who constantly issue dud cheques could be barred for up to five years, blocked from accessing credit, and prevented from opening new current accounts.
To enforce accountability, the CBN also requires banks to ensure that cheques are drawn from accounts with sufficient funds. Accounts that lack adequate funding will attract “returned cheque” charges, consistent with the central bank’s Guide to Charges by Banks, Other Financial and Non-Bank Financial Institutions.
The central bank’s action underscores its commitment to reducing systemic risk, improving cheque clearing discipline, and safeguarding both customers and financial institutions from the financial fallout of repeated cheque dishonours.
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Ogochukwu Onwaeze
Source: TheWillNigeria | Read the Full Story…
