Pettah traders seek new laws to tackle ‘bouncing cheques’
Pettah traders have asked the government to bring in new legislation to penalise customers issuing fraudulent cheques as the present system allows most to get away with it. The traders formed under the Progressive Traders Association in a letter to President Maithripala Sirisena signed by its President A.H. Sabreen has stated that the cheque system is being abused by fraudsters by drawing cheques on closed accounts; drawing cheques on accounts with insufficient funds; and stop payment of issued cheques being unable to honour them.
In this respect it was pointed out that banks only impose a nominal penal levy when drawn cheques were dishonoured. Moreover, it was stated that banks do not take notice of cheques drawn out of closed accounts or those with insufficient funds. The traders pointed out that the current judicial system was cumbersome and costly spending time and money at police stations and courts.
Conversely, the letter stated that countries like India, Pakistan, the UK, US, Singapore, Malaysia would prescribe more strict rules against such criminals. In this respect, the traders suggest necessary provisions to blacklist those customers who engage in such activities or whose credibility is questionable through the banking system.
Another suggestion was to impose a maximum sentence of about 10 years on such persons who carry out frauds with bail applicable to surety in cash or property equivalent to the value of cheques dishonoured. In addition, the traders called for provision to be enacted to make the defaulter liable to pay legal costs and permitted interests to the victim, in the event the parties enter settlement on defaulters’ voluntary undertaking to settle the cheque amount.
A copy of this letter was forwarded to the Justice Minister and the Finance Minister but Mr. Sabreen noted they had not received any response in this regard.