Regulatory Alerts2009-06-25 | BOD/DIR/GEN/SMP/03/024Circular on Dishonouring of Bank Drafts by Issuing Banks
The Central Bank of Nigeria (CBN) has observed increased cases of banks dishonouring their own bank drafts, citing current clearing house rules which do not differentiate between cheques and bank drafts. However, the CBN clarifies that a banker's draft is a form of cheque payable to order on demand and thus should not be subject to restrictive or conditional terms. Banks are now fully liable for their own drafts, with payment required upon demand. The CBN will strictly enforce these rules and impose appropriate penalties against erring banks. Exceptionally, a bank can place a stop on its own draft if there is conclusive proof of a forged endorsement.
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payments
enforcement