Motei & Associates

Motei & Associates - Law Firm in Dubai

Motei & Associates – the go-to legal consultants in Dubai that cuts through legal complexities and delivers effective advocacies.

Damac Executive Heights - Office 801
Dubai
United Arab Emirates

Tel:+971 4 435 5959

Email:contact@motei.com

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Banks to check the creditworthiness of customers regarding issuing cheque books | Attorney in Dubai
Banks to check the creditworthiness of customers regarding issuing cheque books
December 17, 2018

As part of an ongoing effort by the Central Bank of UAE (CBUAE) has issued a circular to banks regarding issuance of cheque books to customers. According to this circular, before issuing cheques to customers, banks are now required to carry out a ‘creditworthiness check’. This creditworthiness check will be carried out by the Al Etihad Credit Bureau (AECB).

The circular states “for any new customers, banks shall issue a cheque book containing a maximum of 10 individual cheques to their customers. After a period of six months and providing no cheques are returned (unpaid), further cheque books may be issued to customers, as per the approved procedures

Additionally, if any cheques are returned, or bounce, due to inadequate funds, it will adversely affect the creditworthiness of the customer. Through this circular the CBUAE has also directed the banks to advise the customers to minimize the use of cheques and to use alternate modes of payment instead, such as direct debits, wire transfers etc.

Pursuant to this policy the government aims at promoting responsible lending practices in the UAE. Although the percentage of bounce cheques has declined in the last quarter of 2018, the government aims at strengthening its grip on nay irresponsible lending practices in UAE.

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Damac Executive Heights (TECOM)
Office No. 801, 8th Floor
P.O. Box: 112888
Dubai, UAE

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