UAE central bank introduces direct debit deadline

  • Share via facebook
  • Tweet this
  • Bookmark and Share
UAE Central Bank governor Sultan Nasser Al Suwaidi

UAE Central Bank governor Sultan Nasser Al Suwaidi

The United Arab Emirates central bank will introduce a direct debit payment system on June 15, bringing an end to the practice of requesting a blank cheque for payment in the Gulf state.

“The implementation of direct debit will enable customers to make regular, automatic payments from their banks accounts towards mortgage loans or credit card payments or personal loans installments,” the bank said in a statement.

In the UAE writing cheques that bounce is a criminal offence instead of a civil one.

The move is designed to eliminate the need for post-dated cheques, which are frequently used as a guarantee by businesses and individuals for everything from apartment rentals to multi-billion dollar deal.

The practice has been heavily criticised in recent years following a string of cases in which several high profile businesspeople were jailed for writing bad cheques.

The Gulf state has introduced several measures aimed at reducing its reliance on post-dated cheques in the last year. The central bank last year rolled out a set of rules aimed at limiting loans to individuals and capping banking fees in the country.

Authorities in October relaxed the penalties for Emiratis who write bad cheques and in November freed around 290 UAE nationals who were in prison for bouncing cheques.

UAE President Sheikh Khalifa Bin Zayed Al Nahyan in May allocated around AED5m to settle defaulted loans for each indebted Emirati. In August, the Central Bank ordered banks to extend maturities on personal loans held by Emiratis by more than four years.

Related:
Companies
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

Posted by: Muneer

How will direct debit eliminate PDC culture? If someone does not have money in their account the direct debit will not work. Therefore suppliers will still take PDCs as their guarantee to recovery by threatening the writer of the PDC with a trip to prison.

PDC culture will only be eliminated when bouncing of PDC is made a civil offence.

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Women edge into Gulf boardrooms as economies, societies shift

Women edge into Gulf boardrooms as economies, societies shift

Amina al-Rustamani, CEO of TECOM Investments, is leading the...

1
Dubai mulls rule change to lure more domiciled funds

Dubai mulls rule change to lure more domiciled funds

Proposed rules would create a new class of funds in the Dubai...

Gulf's rift over Qatar may slow investment, reforms

Gulf's rift over Qatar may slow investment, reforms

Analysts suggest dispute may not hurt immediately but could impact...

Most Discussed
  • 10
    UAE father who whipped son to death wins appeal

    "Under Sharia, a parent cannot be executed for killing their child"
    A spouse could be executed if he/she kills his/her spouse, as none of them is... more

    Friday, 18 April 2014 3:38 PM - Nihar
  • 3
    To diet or not to diet?

    It is best to eat by your blood type. Following this diet is miraculous. Generic diets don't always work as certain foods are not good for the individual... more

    Friday, 18 April 2014 11:49 AM - Shamira Mitha
  • 2
    Saudi conservatives stage rare protest against Westernisation

    While one certainly appreciates a country to retain its own culture and heritage, one might call the current status in Saudi something like "stoneage"... more

    Saturday, 19 April 2014 1:51 AM - Non-Muslim
  • 54
    Three UAE women attacked with hammer at London hotel

    I really feel that Arabian Business.Com should now close this comments page. This should be all about sympathy for the families not what it is/has turned... more

    Wednesday, 16 April 2014 1:06 PM - Adrienne
  • 51
    Why Dubai isn't a plastic city

    What is definitely not a plastic city. The Arabs have a culture dating back to several centuries. 50 years back Dubai was just a fishing village. Today... more

    Tuesday, 8 April 2014 3:49 PM - P. MADHUSUDAN
  • 48
    DMCC boss Ahmed Bin Sulayem entertains Robert Mugabe in Dubai

    @fga ''However today, simply because he decided to dispossess a few white farmers of their land and redistribute to the poorer indigenous blacks'' more

    Sunday, 13 April 2014 3:02 PM - Matt Williams