Cheques to be given expiry dates

CHEQUES COULD carry an expiry date from the summer onwards, following a new directive from the Bank of Portugal.

The authority has sent a circular to all financial institutions recommending that they introduce a validity date for all cheques. In practice, this means that a cheque would have to be deposited or cashed within a specified time limit. But, the Central Bank also advises that the client’s credit history should also be considered. The aim of the measure is to reduce the risks of ‘dud’ cheques and also clamp down on post-dated ones.

According to Portuguese business daily newspaper, Jornal de Negócios, the Bank of Portugal would like to see the new measure in place by the end of June. The Central Bank has apparently decided to leave it to the discretion of each banking institution to decide a reasonable validity period for its cheques.

More than 180,000 cheques ‘bounced’ in the first three months of this year alone, because accounts lacked adequate funds to cover the amount pledged. The value of these ‘bounced’ cheques is said to amount to 469 million euros. Consumer association DECO considers that the Bank of Portugal’s initiative is “positive” but has expressed doubts as to whether the objectives can be attained.