Oct 15, 2007 (LBO) – Sri Lanka’s Central Bank said Monday that cheque returns were too high and warned customers that issuing cheques without funds was an offence. The total value of returned cheques in a day is “substantial”, amounting to over half a billion rupees, a bank statement said.
Out of the total number of cheques of 190,582 presented daily for clearing at LankaClear, the clearing house, about 10,704 or 5.6 percent are returned unpaid.
“The volume of cheque returns in Sri Lanka is high by international standards and it has serious implications on the public confidence of cheques as a means of payment.”
The authorities were considering introducing a reporting system for banks to inform cheque return details of their customers to the Credit Information Bureau (CRIB) under efforts to strengthen legal provisions to take action against those who issue invalid cheques.
“Banks will be able to use such cheque return details in screening customers at the point of opening current accounts,” the Central Bank said.
The bank said insufficient funds in the current account of the issuer was the main reason for cheque returns, accounting for