UAE Central Bank issues circular on chequebook issuance

Following another round about issued by the UAE Central Bank to Financial Institutions, banks should now complete a credit check on clients before issuing a checkbook.

This activity structures some portion of progressing endeavors to “improve dependable lending practices by banks”.

Cheques stay a broadly accepted strategy for installment for purchasers in the UAE, regardless of being eliminated in progressively created markets for electronic payments systems. The UAE has expanded its efforts to improve overall transparency within the industry in recent years.  Starting with the foundation of the Al Etihad Credit Bureau (AECB) in November 2014, a government organization that gathers credit information, information and budgetary responsibilities from banks and money related establishments so as to give precise Credit Reports to people, monetary organizations and organizations to settle on educated credit choices.

The most recent Central Bank declaration states loan specialists must advise clients that cheques which bounce because of deficient finances will be recorded with the AECB and will contrarily affect their credit value.

The expert additionally advised that new to bank clients can just verify a chequebook containing a limit of 10 cheques. After a period of six months, gave no cheques are returned, can another chequebook be issued

“Banks have been likewise urged to encourage their clients to limit the utilization of cheques and consider about other installment strategies, (for example, direct debits and bank transfers) where conceivable,” the Central Bank circular said.

These moves mark a significant advance in proceeded with straightforwardness in the districts budgetary biological system.