UAE banks are still using the police as debt collectors, according to top UAE lawyer Dr Habib Al Mulla.
In an interview published in Arabian Business, Al Mulla said that despite many calls for reform, he was not confident that the decriminalisation of bounced cheques would happen soon.
“Banks are using the police as debt collectors, but even the police don’t want to do this, though until the law is changed, they can’t change this,” he said.
Al Mulla also claimed that finance companies were deliberately blocking moves to change the law.
“One of the issues that is delaying this is there are certain economical lobbying groups behind continuing this practice. Look at banks, credit card issuers and car financing agencies. Their main protection is the cheque guarantee, and so they are lobbying against this. But the market has to adjust itself. You cannot put people behind bars (for bouncing cheques),” he told Arabian Business.
The issue of bounced cheques is one of a number of parts of financial laws that, he argued.
“The issues is the current criminal code does not properly fit for business crimes. It was drafted at a time when everyone was looking at crimes such as murder, theft and rape. But when it comes to sophisticated financial transactions there needs to be a separate code to deal with these cases because sometimes there is a very fine line between what constitutes a crime and what is a commercial transaction (that’s gone wrong.),” he said.
Earlier last week Dr Al Mulla announced a merger of company with the world’s biggest law firm Baker & McKenzie. The new entity, which he will chair, comes into effect on July 1 and will be known as Baker & McKenzie Habib Al Mulla.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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