UAE to bring in direct debit system on June 15

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(Photo for illustrative purposes only)

(Photo for illustrative purposes only)

The UAE central bank said on Tuesday it was introducing a direct debit system for commercial banks, a step which could ease a major problem for foreign businessmen operating in the country.

The system, to start on June 15, will let customers make regular, automatic payments from their bank accounts towards mortgage loans, credit card payments and personal loan instalments, the central bank said.

In the absence of such a system, post-dated cheques are frequently used in the UAE as guarantees by businesses and individuals. For foreign nationals, bouncing the cheques is a criminal offence rather than a merely civil one, causing some foreigners to be jailed.

The UAE's tough penalties for defaulting on cheques were relaxed for local citizens last October after a royal decree was issued.

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Posted by: Business Man

Welcome to the 19th Century! Great to see you guys catching up with the rest of the world.

Posted by: Sole

How a central bank decisions will ease a judicial problem ?

The bounced cheques problems is due to internal judicial decision to interpretate penal code and consider all cheques issued are given with bad intention unless it is cleared ., such evil act cannot be rectified without decision from high authority to cancel or clarify this article of the penal code , and all other initiation or statements whether from central bank or any other authority remain wishful thought without any value as long this Penal code are not modified .

Posted by: Zuhair

This is great news and will have a dramatic and positive impact on the retail banking sector for the UAE.

Posted by: nimby

Anyone explain what is going on here? Politely please!

It is banned, it is open, it is banned, it is open.....
Another day in telco land Dubai.

Posted by: nimby

Much easier.
No paper cheques, no cramped wrist signing them all the time.

Does anyone know, will the same rules apply on bounced post dated cheques as with direct debits unable to be processed?

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