By Claire Valdini
Move marks the latest initiative in the Gulf state to help citizens deal with debts
The UAE has freed around 290 Emiratis who were jailed for bouncing cheques in the latest move by the Gulf state to help its citizens deal with their debts.
The move follows several Gulf-wide initiatives aimed at supporting local populations following last year’s Arab Spring protests.
The freed nationals have been presented with certificates to protect them from any future prosecution, said the UAE's official state news agency. Citizens in similar situations should report to the Public Prosecution to receive the certificates, it added.
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.
Cheques are used in the UAE to underwrite credit cards, loans and guarantee future payments.
The global economic downturn exposed the UAE’s borrowing excesses, which were fuelled by easy credit during the country’s five-year real estate boom. When Dubai’s property bubble burst, thousands of expats fled the emirate leaving unpaid credit cards, mortgages and personal loans outstanding.
At the height of the country’s debt crisis in 2009, UAE lenders said they were seeing up to 2,500 customers leave the country every month without settling their debts.
The UAE central bank last year rolled out a set of rules aimed at limiting loans to individuals and capping banking fees in the country. The central bank has limited personal loans to 20 times the salary or the monthly income of a borrower with a repayment period set at 48 months.
More than 1.5m cheques issued for payments totaling AED55.3bn (US$15.05bn) bounced last year, according to data from the Central Bank.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.
Can the editor of this article provide us with proof of payments being made or a contact number to follow up with for the person in charge of these payments?? I have yet to see a payment coming in from the Dewan's Office. Hopefully this does not get edited this time around. If you claim that they are being paid please stand by this claim. I have yet to be paid by the Dewan's Office.
@editor Are all these Emiratis that were jailed for bouncing cheques being freed AND having their debts paid off? Or are they just being freed without their debts paid off? Who pays these debts off? Are they actually being paid off? Why are they presented with certificates to protect them from any future prosecution?
Their cases are being transferred from criminal to civil courts, if they can show that the cheques were issued as security, therefore all emirati offenders are to be released from jails.
No one said anything about all their debts being paid off.
The civil cases are negotiated with banks, with many agreeing to restructure the loans, or extend maturity dats etc.
Theres a small change that the locals will flee their country as opposed to expats (2500 escaping overseas every month) so there really is no need to jail them.
The article refers specifically to debts of individual citizens, therefore does not apply in any way to money you are owed by any govt office.
Thanks Keeno, last year we had 1.5 million checks bounce which mounts to over 4,100 checks per day. In 2009 expats hit peek with 2500 per month fleeing the country and that was during peek (highest number of expats). I bet now it is well under 2,000 per month which is a drop in the bucket compared to the 118,000 checks that locals bounce every month.
@Andy, your numbers are probably off as we do not know how many cheques were bounced. In the case of administrators of companies one single person could be responsible (or liable) for hundreds of cheques.
But then of course there is a good reason you never get these numbers ain't?
I really doubt that they would be honest enough to pay on their behalf. If they were honest then why have we never seen any articles online of those that were paid off. Pardons but not payments made.