Up to 3 years in jail for bounced cheques in Cyprus

The Ministry of Finance has tabled a bill that will introduce harsh punishment for issuers of bounced cheques, with fines of up to CYP 5,000 (EUR 8,550) or up to three years in jail, or both.

The bill, that makes writing a bounced cheque a criminal offence, was approved by the Cabinet and has the support of the Central Bank, the Cooperative Credit Societies and the Banks’ Association.

Cheques that do not clear with 15 days of issue will be considered as having defaulted and will be forwarded for prosecution. Furthermore, recipient banks will be able to add their remarks on the defaulted cheque by stating whether this was turned down on the lack of funds, closed account or other instructions of the issuer or bank. This information will be deemed as valid testimony in court.

Any employee of a banking institution that knowingly clears a bounced cheque will face up to three months in jail or a fine of up to CYP 1,000 (EUR 1,708) or both.

Meanwhile, the new bill also gives the Central bank the right to approve a process of electronic representation of cheques for clearing purposes.