Bounced cheques decriminalized in the UAE
The amendments will go into force from next year.
The UAE Central Bank has announced amendments to the Commercial Transactions Law. This will go into force from next year, in line with the government’s key plans and strategic initiatives to build and support a sustainable national economy based on best international practices.
Here is all you need to know about the new law:
When will it come into force?
January 2, 2022
What are the key changes?
- Decriminalization of cheques issued without funds.
- Criminalization of bounced cheques due to insufficient funds confined to cases of fraud, forgery and bad faith.
- Partial payment of cheque becomes mandatory.
- Banks must pay drawee the partial amount from the account if the amount in the account is less than the value mentioned in the cheque unless drawee rejects it.
- New amendments replace decriminalization with preventive measures.
- Amendments include deterrent alternative penalties to reduce misuse of cheques.
- Amendments will expedite the collection of cheque value in a more effective manner.
What will penalties look like?
- Withdrawing chequebook from the transgressor.
- Denying him/her the right to receive a new chequebook for up to 5 years.
- Suspending professional or commercial activity of the violator.
How will the amendments benefit the UAE?
- Avoid accumulation of cheque cases before civil and criminal courts.
- Improve UAE’s ranking in Global Competitiveness Index.
- Ease of establishing and doing business.
- Increase UAE’s attractiveness for FDI.
Source: Khaleej Times
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