The Bible says, “my people perish for lack of knowledge”.
One area that people often perish for lack of knowledge is the area of personal financial and money management. In order to ensure that people have the appropriate and required knowledge, the Ghana central bank, through its financial literacy programs educates Ghanaians about financial issues.
Recently, the program event dwelt on why you should not issue dud cheques and what happens when dud cheques are issued. Given the fact that the internet has made the world a global village and that many Nigerians are either living in Ghana or have business connections and dealings in Ghana, it is imperative for Nigerians to be aware of what happens when dud cheques are issued in Ghana.
What is a dud cheque
A dud cheque is a cheque issued and made payable from an account in which the maker does not have enough funds or money to accommodate the cheque. When such cheques are rejected or bounced by the banks, they are inscribed with the alphabets, NSF, meaning “non-sufficient funds”.
Bank of Ghana to the rescue
As part of its financial literacy programs, the Bank of Ghana is telling the public that “it is an offense, punishable by a fine and/or imprisonment of up to 5 years to issue a dud cheque”. It also enjoins Ghanaians and others to ensure that they have enough funds in their accounts before issuing cheques.
The punishment for issuing dud cheques however differs depending on the frequency. A first-time dud cheque issuer gets a slap on the wrist by way of the financial institution or bank on which the cheque is drawn, issuing a warning to the dud cheque issuer and reporting him or her to the credit reference bureau. In addition to that, the bank or financial institution on which the dud cheque is drawn will be required to place the dud cheque issuer under surveillance for a minimum of three years.
A second-time offender, who issues a dud cheque for the second time within three years of the first offence, will be reported to the Bank of Ghana, (Ghana’s central bank) which will then record the offender’s name, account details, branch of bank where the offence occurred, in the dud cheque register. This sounds like what happens to a sex offender in the United States.
A third offender who issues a dud cheque for the third time within three years of the first offence will be banned from issuing cheques in Ghana for a minimum of three years. As if that is not enough, a third offender stands the risk of being banned from accessing new credit facilities from any and all financial institutions in Ghana for a period of three years. In addition to all these punishments for a third-time offender, his or her “name shall be published in two daily newspapers of national circulation” in Ghana.
Reason and advantages
The main reason for the Bank of Ghana to undertake the event and program is to ensure that people are aware of what lays ahead and to ensure that no one pleads ignorance of the law, although ignorance is usually not a defence when it comes to the enforcement of the law. In addition, and more importantly, the Bank of Ghana is doing the awareness campaign on dud cheques as a way to instill civility and credibility in the Ghanian financial and business interactions and transactions.
One advantage of this is that it will increase or improve trust within the Ghanian financial and business sector. That trust will then encourage people to issue and accept cheques from each other. That in turn will reduce the incidence of conducting businesses on a cash basis and therefore reduce the amount of cash that people carry with them. The less cash that people carry around, the less the tendency for robbery attacks, therefore, this will help in the fight against robbery.
The disadvantage, however, is that the banks will lose out on commissions or fees charged on NSF cheques as well as those charged when people opt to purchase cashiers’ cheque or bank drafts as a proxy for personal or business cheques. By and large, the advantages far outweigh the disadvantages. Way to go, Ghana.