Mashreq Bank’s head of retail has insisted that reporting customers to the police for bounced cheques is taken as a last resort.
Bouncing a cheque in the UAE is a criminal offence and can land a customer in jail. Last year, Dubai police dealt with almost 80,000 cases of bounced cheques, which amounted to AED9.4 billion ($2.55 billion).
Mashreq Bank’s head of retail banking, Farhad Irani, told Arabian Business bouncing a cheque, as a means of forcing someone to repay an overdue debt, is only used by the lender as a last resort.
“We report the bounced cheque only when the customer is four cycles past beyond his debt with at least five to seven promises to pay that are broken. So it's a last resort when actually present the security cheque, bounce it and take legal action,” said Irani.
He said banks do not like using the bounced cheque method, given the lengthy process involved.
“There's a huge amount of effort and cost in every case. [Going to the] Public prosecutor’s office, presenting the cheque, making the case, filing the case, following up when the customer is either caught or arrested,” he said.
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