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CBN Extends Acceptance of Legacy Banks’ Cheques

06 Jan 2013

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CBN Governor, Samusi Lamido Sanusi

Festua Akanbi
The Central Bank of Nigeria (CBN) may have yielded to pressure from members of the banking community with the extension of the deadline on the acceptance of cheques that emanated from legacy banks to March 31. The affected banks included Afribank Plc, Bank PHB Plc, ETB Limited, Oceanic Bank Plc, Intercontinental Bank Plc, Finbank Plc and Spring Bank Plc.
This implies that such cheques can still be presented for transactions and clearing.

Following the new directives, some of the affected institutions began passing the information to their respective customers and contractors last week, in a bid to douse tension.
The apex bank had in November last year directed all Nigerian banks and other financial institutions not to honour or present for clearing cheques from legacy or liquidated banks from January 2, 2013.

Following the CBN’s intervention of 2009, where eight banks adjudged to have failed a joint test conducted by the CBN and the Nigerian Deposit Insurance Corporation (NDIC) were taken over by the CBN, some of the affected banks were immediately acquired by healthier bigger banks, while three others lost their identities to three new financial institutions.

However, First Monument Bank Plc, in an SMS to its customers disclosed that the “CBN has announced the extension of the deadline for the acceptance of legacy bank cheques (that is, those of Afribank Plc, Bank PHB Plc, FinBank Plc, ETB Bank Limited, Oceanic Bank Plc and Spring Bank Plc) to March 31, 2013.

“This implies that such cheques can still be presented for transactions and clearing.”
THISDAY checks showed that the CBN had been under intense pressure especially by some contractors of the legacy banks who had been shortchanged by the initial deadline, which expired in December last year.

Some of the contractors include those presented with post-dated cheques or those with cheques, which could not be honoured by the new institutions that emerged from the ruins of the legacy banks.

THISDAY also gathered that some of the contractors had petitioned the CBN especially as some of the cheques issued by the banks at the twilight of their operations had repeatedly bounced, a consideration said to have largely informed the latest deadline extension.

A banking industry source explained that the apex bank had no choice but to bow to pressure mounted by some contractors of the legacy banks, who had threatened to institute legal actions against the banks.

“Besides, some of the banks that acquired those troubled banks are back on their feet, so there is no excuse for them not to honour the cheques given the fact that they have acquired both the assets and liabilities of the affected institutions,” the source said.

CBN Spokesperson, Mr. Ugo Okoroafor, could not confirm the development when THISDAY called him at the weekend as he promised to call back. He did not do so up till press time.

Tags: Business, Nigeria, Featured, Legacy Banks

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