By Gavin Davids
Customer complaints sees UAE Central Bank set new deadline for cheque change
The deadline for banks to only accept cheques bearing new security features has been extended, the UAE Central Bank has announced.
A Central Bank spokesperson told local media that the decision was reversed because of a flood of complaints from customers, forcing the regulator to push back the deadline.
UAE banks were required to stop accepting old bank cheques by January 1, 2011, and introduce new high tech, tamper proof, cheques which are machine readable.
However, banks and customers complained that the validity of their old post dated cheques, from last year and beyond, were compromised by the new rules, leaving them unable to make payments, a report in Khaleej Times said.
Landlords and property owners also protested against the deadline as they hold thousands of post dated cheques as part of their tenants’ rental payments, an issue which could prove very difficult to resolve, they said.
“It is extremely difficult for banks to replace old cheques, demand drafts and pay orders with the new ones from their loan documents,” a banker, who asked not to be named, told the newspaper.
As a result, the Central Bank issued a circular that advised local banks that a revised cut off date for handling cheques without the new security features would be released in the near future.
It added that the new deadline was likely to be in the middle of the year.
Despite repeated attempts, Arabian Business could not reach Central Bank officials for further comment.
Although banks have been implementing their own security features in the cheques, the Central Bank has insisted on all banks complying with a set of new security features to reduce the chances of fraud.
I have been involved with several countries where new cheques standards are being introduced, some of them in Africa. I have always suggested to Central Banks that they should allow minimum 18 months to remove the old cheques from the system.
Account holders feel cheated if they have cheques they have paid for and now cannot use. Most security printers cannot cope with a cheque of cheques being implimented too quickly either. Were the printers involved in the changes , were they aware of the changes, did they have the right techniques and supplies available to them to make the changes ? I have found from experience that Central Bank just impose changes without proper discussion with both banks and suppliers. I could be wrong in this case but they have the timescale from somewhere so who decided on it. The last change implimented in the UK gave two years for the transition from one cheque to the other. So I suspect in this case a no comment from the Central Bank may hold the answer.