• Share via facebook
  • Tweet this
  • Bookmark and Share

UAE banks take direct approach on debt

The end of post-dated cheques is finally on the horizon says Beatrice Thomas

For a fast-paced country with booming cities such as Dubai and Abu Dhabi, news of the UAE Central Bank’s move to a direct debit banking system is long overdue.

The emirate is renowned for the catchphrase “work hard, play hard”. Such a busy lifestyle comes with the inevitability that some things get overlooked or plain forgotten. For many, that is likely to be paying dreaded bills.

Under the current system - whether it’s water, power, credit card payments, insurance premiums or mobile phones - it’s up to the consumer to remember to pay up on time.

While it’s obviously a matter of personal responsibility, it also lends itself to defaults as people inadvertently overlook a payment’s due date.

The process of going to a bank in person or logging into internet banking may seem easy enough but in the hectic daily cycle of life it’s not always convenient.

The current system means post-dated cheques are frequently used as guarantees by businesses and individuals. But, any error in the use of this is serious, given that under UAE law it is a criminal offence – rather than merely a civil crime – for a cheque to bounce, causing some to be jailed.

Direct debit banking is not new. In fact, it is commonplace around the world.

Setting up payments for telecommunications, mortgages, personal loans, power and water bills, credit card payments and insurance premiums is not only convenient for consumers but gives the providers of these services the guarantee of money coming in on time.

The fact that the Central Bank plans to mandate the system for all loans and finances being advanced by banks and finance companies is even better news.

Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

All comments are subject to approval before appearing

Most Discussed
  • 7
    Deported expats will face GCC-wide ban

    Thanks for using a British passport in your picture, is it just British expats that are deported? No, it's not in fact we are in the minority. Using a... more

    Sunday, 7 February 2016 1:57 PM - matt williams
  • 1
    UAE to build $3bn alumina refinery by end-2017

    What is being done for the recycling of Red Mud? I have contacted EGA several times requesting information on the recycling of the Red Mud. As of today... more

    Sunday, 7 February 2016 8:46 AM - Gary McNeish