Cyprus Parliament is set to examine legislation allowing digital cheque deposits, enabling customers to present cheques for payment remotely through their bank’s electronic systems or a mobile phone application.
The two amendment bills, concerning the Bills of Exchange Law and the Criminal Code, are scheduled to go before the House plenary on Thursday, October 22, following three meetings of the Parliamentary Finance and Budget Committee on September 28 and October 5 and 12.
The proposed changes aim to allow cheques to be deposited without customers having to visit a bank branch in person, saving time and reducing bureaucracy for individuals and businesses.
How digital cheque deposits would work
The first bill expands the ways cheques can be presented to banks by allowing customers to submit digital images of both sides of a cheque through their bank’s electronic systems.
The Central Bank of Cyprus explained during discussions at the Finance Committee that the changes would enable remote cheque deposits through banking systems and a dedicated mobile phone application.
The introduction of digital cheque deposits is intended to make banking transactions more convenient while maintaining the procedures required to process cheques.
What the legislation says about bounced cheques
The second bill amends the Criminal Code to cover cases in which a cheque is presented digitally for payment but is subsequently found to be unsupported by sufficient funds.
Under the proposed provisions, the bank receiving the cheque would be able to record electronically the reason for non-payment, based on information provided by the bank on which the cheque was drawn, as well as the date on which it was presented for payment.
These electronic records would be admissible as evidence in court and would constitute rebuttable presumptions as to the accuracy of their contents.
The changes aim to establish a legal framework for cases involving bounced cheques presented through digital channels.
Banks say technical checks will remain in place
During the Finance Committee’s examination of the bills, a representative of the Law Office of the Republic said the proposed amendments would strengthen transaction security and legal certainty while facilitating remote transactions for individuals and businesses.
The representative of the Association of Cyprus Banks clarified that digital images would not eliminate the technical checks carried out by bank employees before cheques are forwarded for clearing.
The representative also said the changes would not alter the procedures set out in Central Bank directives for the issuance and presentation of bounced cheques.
MPs raise concerns over forgery risks
Despite the potential benefits of digital cheque deposits, MPs raised concerns during committee discussions about the authenticity of digital copies and the evidence required to prove that a bounced cheque had been issued.
AKEL MP Andreas Pasiourtides questioned how disputes over signatures and handwriting could be resolved without access to the original document.
ALMA Movement leader Odysseas Michaelides also warned about the possibility of forgery, arguing that cheques could be easier to falsify digitally and highlighting the need for stronger safeguards.
Finance Committee chairwoman and DIKO MP Christiana Erotokritou proposed examining a provision requiring beneficiaries to retain the original cheque for a specified period, ensuring it would remain available if needed as evidence.
MPs reserved their positions ahead of the debate in the House plenary.
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