An official of the Bank of Ghana said on Wednesday that the decision to sanction bank customers who issued dud cheques in recent years was to boost confidence in the country’s cash lite initiative and payment systems.
Kwasi Osei Yeboah, a director at the financial stability department of the central bank, said in an interview on the sidelines of a media interaction on monetary policy issues that the central bank arrived at the decision due to the waning confidence in cheques as a means of payment in the country.
“Confidence in cheques for payment has fallen to the extent that many businesses and individuals reject cheques as instruments of payment. At best, they decide to get it cleared before delivering services or goods,” Yeboah said.
He said the situation ought not to be so, because cheques are considered the nearest payment instruments to cash, and businesses and individuals should be able to transact business with cheques.
He confirmed that 245 institutions and 47 individuals have been caught issuing dud cheques at least three consecutive times within the past three years.
Yeboah said the central bank would continue with the exercise over the next three months to review the situation.
He said the Bank of Ghana had directed commercial banks to withdraw the checkbooks from the offending individuals and institutions and should not offer credit to them. “If you are issuing dud cheques, then you are not credit-worthy and should not enjoy credit facilities.”
“The Bank of Ghana has been encouraging the cash lite initiative, and if people are not using cheques as payment instruments, then it will defeat the purpose of the initiative,” he added.
The official said this directive from the central bank would boost the trust people have in cheques as instruments of payment and bring certainty to businesses that receive cheques as payment.
The central bank on Tuesday announced the imposition of sanctions on 47 individuals and 245 entities for issuing dud cheques between Jan. 2022 and Jan. 2024, despite warnings about the consequences of their actions.