Bounced cheques: New legislation voted unanimously
8/1/2003 13:14
S.O.S: Imprisonment for bank clerks
Conditional acceptance of the “legitimate reason”
The Parliamentary Legal Committee has unanimously decided to take the proper measures against the issue of bounced cheques, as this has now become a penal offence punishable by the law with 3 years imprisonment and/or CYP 5 thousand pounds. The Committee has also decided to handle the issue of issuer’s protection (known as the legitimate reason) so that bounced cheque issuers are able to submit their vindications.
According to StockWatch sources, the MP of NE.O and sponsor of the amendments, Christos Clerides, has submitted a “compromise proposal”, whilst AKEL and DIKO have accepted the conditional “legitimate reason”:
First, the cheque issuer will be able to cancel his/her cheque before the cashing date, so long as he/she has notified the banks, explaining the reasons for this action.
Second, once the cheque issuer does not do so (notification), he/she will not be able to plead the “legitimate reason”, explaining the reason for his/her action to cancel a cheque.
Third, all reasons adduced by the cheque issuer will be his/her personal commitment. He/she cannot adduce other reasons before the court.
Mr. Clerides said to “SW” that the aforesaid measures will not wipe out the phenomenon of bounced cheques that persecutes traders and citizens, but it will certainly reduce the misuse of post-dated cheques.
Mr. Clerides also pointed out that the bill is to pass on January 16, whilst banks will no longer be called before the court, since their stamp will be the proof for bringing the case before it.
It is worth mentioning that the time limit for the bounced cheques is to extend from 7 to 15 days. Once issuers have transferred the money in due time, no legal problem will be raised.
Finally, it is necessary that banks observe the banking secrecy for their clients and the confidentiality of information with regard to their bank accounts. It is noted that the legislation amendments will not only be applicable to the Cooperatives (SPE), but also to all organizations that issue chequebooks.
S.O.S: What bank clerks should be careful about?
Bank clerks that permitted, took part or violated the legislation with reference to banking secrecy and the confidentiality of information regarding their bank accounts, commit a penal offence. The law provides imprisonment (not exceeding three months) or a CYP 1000 fine.
Note that the law provides the exoneration of the bank clerk in case of a “bona fide mistake”.
Conditional acceptance of the “legitimate reason”
The Parliamentary Legal Committee has unanimously decided to take the proper measures against the issue of bounced cheques, as this has now become a penal offence punishable by the law with 3 years imprisonment and/or CYP 5 thousand pounds. The Committee has also decided to handle the issue of issuer’s protection (known as the legitimate reason) so that bounced cheque issuers are able to submit their vindications.
According to StockWatch sources, the MP of NE.O and sponsor of the amendments, Christos Clerides, has submitted a “compromise proposal”, whilst AKEL and DIKO have accepted the conditional “legitimate reason”:
First, the cheque issuer will be able to cancel his/her cheque before the cashing date, so long as he/she has notified the banks, explaining the reasons for this action.
Second, once the cheque issuer does not do so (notification), he/she will not be able to plead the “legitimate reason”, explaining the reason for his/her action to cancel a cheque.
Third, all reasons adduced by the cheque issuer will be his/her personal commitment. He/she cannot adduce other reasons before the court.
Mr. Clerides said to “SW” that the aforesaid measures will not wipe out the phenomenon of bounced cheques that persecutes traders and citizens, but it will certainly reduce the misuse of post-dated cheques.
Mr. Clerides also pointed out that the bill is to pass on January 16, whilst banks will no longer be called before the court, since their stamp will be the proof for bringing the case before it.
It is worth mentioning that the time limit for the bounced cheques is to extend from 7 to 15 days. Once issuers have transferred the money in due time, no legal problem will be raised.
Finally, it is necessary that banks observe the banking secrecy for their clients and the confidentiality of information with regard to their bank accounts. It is noted that the legislation amendments will not only be applicable to the Cooperatives (SPE), but also to all organizations that issue chequebooks.
S.O.S: What bank clerks should be careful about?
Bank clerks that permitted, took part or violated the legislation with reference to banking secrecy and the confidentiality of information regarding their bank accounts, commit a penal offence. The law provides imprisonment (not exceeding three months) or a CYP 1000 fine.
Note that the law provides the exoneration of the bank clerk in case of a “bona fide mistake”.
3287.99
1275.09
