A dud cheque is a worthless cheque that cannot be paid because the person who issued the cheque does not have sufficient money or has no money at all in his bank account.
Fresh measures to eradicate dud or dishonoured cheques from the banking system have been evolved by the Central Bank of Nigeria (CBN) and the 25 banks in the country. In this regards, CBN has opted for the prosecution of the offenders under the Dishonoured/Dud Cheques Act of 1977.
The fight against dud cheque issuance came into the open after the Bankers Committee's meeting in August 2005 in Lagos. After the meeting, Mr. Godwin Olajobi of the Banking Supervision of the CBN told journalists that as part of the ways of checking illegality in the financial system, the CBN, in collaboration with the banks, had set up a website where names of dud cheque issuers would be posted. He explained that at that time, the value of dud cheques in the nation's banking system was N9 billion. He added that the law against issuance of dud cheques would be strictly enforced.
The law stipulates a two-year jail term upon conviction for dud cheque issuers by an individual, while a corporate body will be fined a minimum of N5 million. Anybody who issues a dud cheque can be prosecuted and sent to prison.. All such suspects are expected to be handed over to the Economic and Financial Crimes Commission (EFCC) for prosecution.
For awareness, banks had been mandated to put up posters in their banking halls, warning people of the consequences of issuing dud cheques. The posters, with dominant red background, read: \"Be warned! Issuance of dud cheques is a serious financial crime. Two years jail term awaits offenders".