Prosecutors are currently working on a case involving Rwanda Football Federation (FERWAFA) president Fabrice Shema who is facing charges related issuing a bouncing cheque. Shema was arrested on August 11, and his case was forwarded to the prosecution on August 18. In light of the case, The New Times takes a look at what the law says about issuing a bouncing cheque: ALSO READ: Bouncing cheques: Central bank moves to relax measures for first time offenders When does issuing a bouncing cheque become a crime? The law deals with bouncing cheques on two levels: criminal liability under the 2021 law governing negotiable instruments and administrative sanctions under the 2024 BNR regulation. Under the 2021 law, a person commits an offence if they knowingly issue a bouncing cheque. The law also holds accountable a person who, after issuing a cheque, withdraws all or part of the funds or otherwise prevents payment. ALSO READ: Evolution of cheque regulation in Rwanda A person convicted of the offence faces between two and five years in prison and a fine of bbetween five to10 times the amount stated on the cheque. What dministrative sanctions are imposed? Criminal proceedings are not the only consequence of a bounced cheque. ALSO READ: EDITORIAL: Bounced cheque: BNR should double public awareness The 2024 National Bank of Rwanda (BNR) regulation relating to bouncing cheques provides for administrative sanctions that apply separately from the criminal provisions. For an individual account, the sanction is imposed on the person who signed the cheque. For a corporate account, the sanction is imposed on the legal entity that appears as the drawer of the cheque. The administrative sanction is 10 per cent of the amount of the bounced cheque, capped at Rwf10 million. The regulation also requires the cheque defaulter to return cheques issued by financial institutions, with restrictions placed on their use for specified periods depending on whether it is a first or subsequent offence. Is someone given time to settle a bounced cheque? The 2024 regulation requires the paying institution to formally notify the drawer that the cheque has bounced and give them five calendar days to settle it. If the cheque remains unsettled after that period, the institution reports it to the National Bank of Rwanda and the Credit Reference Bureau. Such reporting can also negatively affect the cheque defaulter's credit score. Lawyer sheds light on the law Lawyer Irénée Bayisabe told The New Times that a cheque should be issued on the understanding that the money needed to honour it is available. “A cheque represents money, so you have to issue it with confidence that the money is there,” he said. He added that the criminal fine imposed following conviction is paid to the state, while the person who was supposed to receive the money remains entitled to the amount owed. In cases where the convicted person cannot immediately pay what is owed, Bayisabe said the debt can remain outstanding and recovery can be pursued against the person's property in accordance with the law. Financial institutions keep records of bouncing cheques for 10 years Besides criminal proceedings, there is a regulation that requires financial institutions to keep records relating to bouncing cheques for 10 years from the date the cheque is presented for payment.
