Bank of Ghana: Imposes Dud Cheque Credit Ban on Repeat Offenders

• The Bank of Ghana has implemented new rules, effective September 7, 2026, imposing severe penalties for issuing dud cheques.
• Repeat offenders face a one-year ban from new credit and a minimum three-year prohibition from issuing cheques.
• Levies for dud cheques are tiered: 10% for a first offence, 15% for a second offence within one year, and 20% for a third offence.
• Banks and Specialised Deposit-Taking Institutions must report all dud cheque incidents to Credit Reference Bureaus and the BoG, and submit monthly returns.
• These measures aim to restore public confidence in cheques, which has been undermined by the continued practice of issuing cheques with insufficient funds.

Beyond credit restrictions, repeat offenders will also be barred from issuing cheques for a minimum period of three years, a severe consequence designed to deter the practice.

The Bank of Ghana (BoG) has introduced stringent new measures targeting individuals and entities that repeatedly issue dud cheques, effective from its Dud Cheque Notice issued on September 7, 2026. These revised regulations aim to curb the persistent problem of bounced cheques within the financial system. Under the new framework, customers classified as repeat offenders face significant penalties, including a one-year prohibition from accessing new credit facilities from banks and other financial institutions across Ghana.

Beyond credit restrictions, repeat offenders will also be barred from issuing cheques for a minimum period of three years, a severe consequence designed to deter the practice. These most stringent sanctions are reserved for customers who commit a third offence. Additionally, a substantial levy equivalent to 20% of the dud cheque's face value will be imposed on these persistent offenders. The central bank has committed to actively notifying all banks and Specialised Deposit-Taking Institutions (SDIs) when a customer is placed under a credit ban, ensuring widespread enforcement of the Ghana BoG dud cheque credit ban.

The new rules establish a tiered penalty system for dud cheque infractions. For a first offence, banks and SDIs are mandated to impose a levy of 10% of the cheque's face value. This initial penalty is accompanied by a formal warning issued to the customer, clearly outlining the potential repercussions of any subsequent offences. Should a customer commit a second offence within one year of their first, the levy escalates to 15% of the cheque's face value, and another warning must be issued by the financial institution.

Under the updated Bank of Ghana dud cheque rules, financial institutions bear increased responsibilities for reporting and compliance. For both first and second offences, banks and SDIs are required to report the incident not only to the customer but also to Credit Reference Bureaus and directly to the Bank of Ghana. This ensures a comprehensive record of infractions across the financial ecosystem, contributing to a more robust credit reporting system.

The BoG has specifically reminded banks and SDIs of their ongoing obligation to submit information regarding customers who issue dud cheques to Credit Reference Bureaus. This requirement is rooted in existing legislation, specifically Section 25(c) of the Credit Reporting Act, 2007 (Act 726), underscoring the legal foundation for these reporting mandates. These measures are critical for maintaining the integrity of credit assessments and preventing serial offenders from circumventing sanctions.

Furthermore, all banks and SDIs are now required to submit monthly returns on dud cheques to the BoG. These detailed reports must reach the central bank by the 10th day of the month following the reporting period. This includes the submission of "nil returns" for any months where no dud cheques were recorded, ensuring complete and consistent data collection on Ghana bounced cheque sanctions.

The Bank of Ghana's decision to revise its directives stems from a persistent challenge within the nation's payment system. The central bank noted that the practice of issuing dud cheques has continued unabated despite previous warnings and existing regulations. This ongoing issue has significantly eroded public confidence in cheques as a reliable and secure method of payment, necessitating a stronger regulatory response.

By implementing these more stringent measures, the BoG aims to directly address the underlying problem of insufficient funds cheque Ghana and to restore faith in the country's payment infrastructure. The revised rules, including the Ghana cheque issuing prohibition for repeat offenders, are designed to create a more disciplined environment for financial transactions. The central bank formally defines a dud cheque as "a cheque drawn on an account by a customer for which there are insufficient funds to pay the amount specified on the cheque," providing clarity on the specific conduct targeted by these new regulations. The ultimate goal is to foster greater accountability and stability within the financial sector.

Lawyers should advise clients, particularly businesses and individuals, on the severe new credit and cheque-issuing bans for repeat dud cheque offences in Ghana, and the increased levies. Compliance officers at banks and Specialised Deposit-Taking Institutions must update their internal procedures to adhere to the BoG's revised reporting requirements to Credit Reference Bureaus and the central bank.

Source: Original reporting via Joy Business