October.12.16‬ Personal Finance‬
Money Matters with Nimi

The CBN in a circular dated July 5, 2013 directed all banks to advise their #customers against issuing “dud” cheques to third parties, that is, issuing a cheque against an unfunded account.

Naturally, it is infuriating to be at the receiving end of a dud cheque. This makes people reluctant to accept cheques from people that they aren’t familiar with and indeed they might hesitate or even refuse to accept cheques altogether. Several #retailers continue to be reluctant to accept cheques as a mode of payment.

“Bounced” cheques are one of the most common offenses that plague the financial world. There are various reasons why a cheque might be dishonoured including the following:

Irregular signature: Your signature is central to your identity and should be unique. It is important to be very skilled in writing your own signature as this will help to protect you from fraud, as it will be more difficult to copy. Many of us can be somewhat careless when we sign our signature, signing in different ways and with little consistency. If your signature is irregular and does not match the banks records in the documentation that you submitted, the bank, for #security reasons should return your cheque to be sure that there hasn’t been a fraudulent attempt at making a #withdrawal from your account.

Insufficient funds: It is important to keep track of your bank statements so that you have an idea of your bank balance and don’t find that you suddenly have insufficient funds to make an important payment. If you use a chequebook, you can keep a running balance on the attached cheque leaves.

You are expecting some money to be deposited into your account and issue a cheque in anticipation of the credit. For some reason, the credit doesn’t arrive before the cheque goes in for clearing and the cheque is thus returned.
Another common occurrence is that someone owes you money and issues you with a dud cheque. If you have written cheques against that cheque, then your cheque will also bounce.
Some people are just simply unscrupulous and knowing fully well that their account is not funded, they issue a cheque knowing that they do not have money in the account.

The consequences of issuing DUD cheques are grave. CBN has directed all Commercial Banks to send details of their customers along with copies of their dud cheques to the CBN. Worse still, the CBN will in turn forward such details to the Economic and Financial Crimes Commission (EFCC) for further investigation.

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