Prosecutors are at present engaged on a case involving Rwanda Soccer Federation (FERWAFA) president Fabrice Shema who’s going through fees associated issuing a bouncing cheque.
Shema was arrested on August 11, and his case was forwarded to the prosecution on August 18.
In gentle of the case, The New Occasions takes a take a look at what the legislation says about issuing a bouncing cheque:
When does issuing a bouncing cheque grow to be against the law?
The legislation offers with bouncing cheques on two ranges: felony legal responsibility beneath the 2021 legislation governing negotiable devices and administrative sanctions beneath the 2024 BNR regulation.
Underneath the 2021 legislation, an individual commits an offence in the event that they knowingly concern a bouncing cheque.
The legislation additionally holds accountable an individual who, after issuing a cheque, withdraws all or a part of the funds or in any other case prevents fee.
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An individual convicted of the offence faces between two and 5 years in jail and a effective of bbetween 5 to10 instances the quantity said on the cheque.
What dministrative sanctions are imposed?
Felony proceedings will not be the one consequence of a bounced cheque.
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The 2024 Nationwide Financial institution of Rwanda (BNR) regulation referring to bouncing cheques offers for administrative sanctions that apply individually from the felony provisions.
For a person account, the sanction is imposed on the one who signed the cheque. For a company account, the sanction is imposed on the authorized entity that seems because the drawer of the cheque.
The executive sanction is 10 per cent of the quantity of the bounced cheque, capped at Rwf10 million.
The regulation additionally requires the cheque defaulter to return cheques issued by monetary establishments, with restrictions positioned on their use for specified durations relying on whether or not it’s a first or subsequent offence.
Is somebody given time to settle a bounced cheque?
The 2024 regulation requires the paying establishment to formally notify the drawer that the cheque has bounced and provides them 5 calendar days to settle it.
If the cheque stays unsettled after that interval, the establishment stories it to the Nationwide Financial institution of Rwanda and the Credit score Reference Bureau. Such reporting may also negatively have an effect on the cheque defaulter's credit score rating.
Lawyer sheds gentle on the legislation
Lawyer Irénée Bayisabe instructed The New Occasions {that a} cheque needs to be issued on the understanding that the cash wanted to honour it’s obtainable.
“A cheque represents cash, so it’s important to concern it with confidence that the cash is there,” he stated.
He added that the felony effective imposed following conviction is paid to the state, whereas the one who was speculated to obtain the cash stays entitled to the quantity owed.
In circumstances the place the convicted particular person can’t instantly pay what’s owed, Bayisabe stated the debt can stay excellent and restoration could be pursued in opposition to the particular person's property in accordance with the legislation.
Monetary establishments “hold information” of bouncing cheques for 10 years
Moreover felony proceedings, there’s a regulation that requires monetary establishments to maintain information referring to bouncing cheques for 10 years from the date the cheque is introduced for fee.
