The Central Bank of Nigeria (CBN) has intensified its fight against cheque fraud. It proposes a strict five-year ban on repeat offenders. At the same time, lawmakers and regulators have raised fresh concerns. These concerns relate to risks emerging from Nigeria’s fast-growing Point-of-Sale (POS) industry. Together, these actions signal a renewed push to protect the financial system. They also tighten oversight across both traditional and digital payment channels.

What the New Cheque Rules Introduce

The CBN’s draft guidelines were released in late November 2025. They outline severe penalties for individuals who issue multiple dishonoured cheques. Anyone who issues three cheques returned for insufficient funds will face an automatic five-year ban. This ban covers cheque-clearing services, banking credit, and the opening of new current accounts.

If the offender violates the rule again after the ban expires, the five-year restriction restarts. This creates the possibility of indefinite exclusion from formal banking for chronic offenders.

Banks must report all returned cheques to the Credit Risk Management System (CRMS) and at least two private credit bureaus. This must be done within one hour of dishonour. The rules also impose penalties on banks that fail to enforce the restrictions. Institutions that open new accounts without verifying CRMS status may face fines. These fines range between $\text{N}1$ million and $\text{N}5$ million. The amount depends on their category and the severity of the breach.

The CBN says the draft rules reinforce existing frameworks. These include the 2015 policy on dud-cheque issuers. The new rules represent the strongest stance yet against cheque-based fraud.

Why the Crackdown is Happening

Cheques remain widely used by individuals and businesses, despite appearing outdated. Their continued use creates risk within the banking system. This is due to rejected payments and slow clearing times. Industry stakeholders argue that the new penalties will help restore trust. They will also introduce order into a segment that has long operated with too much leniency.

At the same time, Nigeria’s digital-finance sector faces increasing political and regulatory scrutiny. The once-celebrated rise of POS agents is now under review. A House of Representatives Ad hoc Committee recently flagged major risks. These risks are linked to unregistered operators, cloned terminals, weak Know-Your-Customer (KYC) processes, and gaps in fraud prevention. The report highlighted vulnerabilities that could be exploited for illicit finance and data breaches.

One senator reportedly warned about the rapid spread of POS operations. They said it “if left unchecked, could turn Nigeria’s digital-finance promise into a security threat.” The Committee is now considering legislation. This would introduce stricter registration, tighter compliance rules, and unified standards for POS operators nationwide.

What is at Stake

If cheque failures continue, confidence in formal payment instruments could decline further. The CBN aims to send a clear message. The era of leniency on cheque fraud has ended.

The sanctions reach far beyond cheques. Offenders will lose access to essential financial services. These include loans, mortgages, and new current accounts. This could lock individuals and businesses out of credit for years. This affects liquidity, cash flow, and long-term financial stability.

Banks now face additional compliance responsibilities. They must upgrade reporting systems, strengthen KYC checks, and improve credit-bureau updates. They must also monitor cheque-book usage more closely. Noncompliance attracts heavy penalties. This creates a wider operational and financial burden.

Meanwhile, regulators have broadened their lens. The scrutiny of POS agents suggests that oversight will intensify. This affects fintechs, payment service providers, and digital-finance companies. These players may soon face new licensing rules, enhanced KYC demands, and tougher anti-fraud obligations.

What Happens Next

The CBN has released the rules as an exposure draft. It is inviting feedback from banks, fintechs, and consumer groups over the coming weeks.

For many observers, the policy marks a turning point. Nigeria’s regulators appear intent on prioritising fraud prevention and systemic stability. This is true even if it means imposing stricter controls on convenience-driven financial services or informal liquidity channels.

A banking compliance executive, speaking anonymously, captured the mood. “The new rules change the competitive landscape. Companies that treated bounced cheques as a minor business cost will now face long-term consequences. It is time to get organised or risk exclusion.”

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