1,500,000 bounced cheques in UAE in 2011
Oct 23rd 2012, 6:44 am
#1
Hit 16's
Thread Starter
Joined: Mar 2010
Location: Of all the gin joints, in all the towns, in all the world, she walks into mine
Posts: 13,112
1,500,000 bounced cheques in UAE in 2011
Er, that's rather a lot.
More than 1.5 million cheques used for payments amounting to Dh55.3 billion (US$15.05bn) were returned in the UAE last year, according to the most recent available data from the Central Bank.
That represents one failed transaction out of every 20 cheques used last year.
The total includes cheques that bounced due to insufficient funds and those that failed to clear for technical factors such as being damaged or missing details.
Ok, those figures include cheques that were damaged or missing details, but even so.
The number of people who have been jailed for bounced cheques is unknown. However, Lieutenant General Dahi Khalfan Tamim, the chief of Dubai Police, has called for a decriminalisation of bounced cheques because of the costs imposed by pursuing bounced cheques used by local businesses.
Unknown? Really? And will the chief's call carry any weight? Surely if the police and the banks join forces their combined voice would be heard.
http://www.thenational.ae/thenationa...-uae-last-year
More than 1.5 million cheques used for payments amounting to Dh55.3 billion (US$15.05bn) were returned in the UAE last year, according to the most recent available data from the Central Bank.
That represents one failed transaction out of every 20 cheques used last year.
The total includes cheques that bounced due to insufficient funds and those that failed to clear for technical factors such as being damaged or missing details.
Ok, those figures include cheques that were damaged or missing details, but even so.
The number of people who have been jailed for bounced cheques is unknown. However, Lieutenant General Dahi Khalfan Tamim, the chief of Dubai Police, has called for a decriminalisation of bounced cheques because of the costs imposed by pursuing bounced cheques used by local businesses.
Unknown? Really? And will the chief's call carry any weight? Surely if the police and the banks join forces their combined voice would be heard.
http://www.thenational.ae/thenationa...-uae-last-year
Oct 23rd 2012, 8:16 am
#2
Bored liberal
Joined: Feb 2007
Location: Over there ----->
Posts: 13,713
Re: 1,500,000 bounced cheques in UAE in 2011
Many of them are not bounced, but rejected. You'd be amazed at how many are rejected because of signatures not being identical to the one on the system. Many are also represented and go through a second time. Even if they are bounced, it takes a while to go through the process of reportng to the police, going the court and going to prison.
Oct 23rd 2012, 8:23 am
#3
Nothing doin' here
Joined: Sep 2008
Posts: 3,508
Re: 1,500,000 bounced cheques in UAE in 2011
even the Chief of Dubai police says jail for bouncing cheques is not the way to go, interesting piece in the National again (however is "afoul" a word and what does "The entire banking system would benefit by erasing red ink in a more timely fashion" actually mean)?
From The National (again)
From The National (again)
Blame it on a lack of personal responsibility. And blame it on a system that encourages people to incur too much debt. Either way, the recent report that more than 5 per cent of cheques written in the UAE last year were returned or rejected is concerning. That those cheques had a face value of over Dh55.3 billion is particularly troubling.
As The National reported yesterday, 1.5 million of 28.4 million cheques written for payments in 2011 failed to clear the bank. The reasons are varied: in some cases it could have been something as insignificant as a torn corner or an illegible signature.
The other cause concerns us more. It is illegal to write a cheque that bounces, and cheque-writers can end up referred to the courts and, in some cases, seeing jail terms. Debtor's prison is supposed to act as a deterrent. But in practice, this is a burden on the state, which is jailing people who are guilty simply of debt. It's also a burden on individuals who may end up behind bars, deprived of the opportunity to earn any income with which to pay off their debts.
In recent years there have been numerous proposals to deal with this problem, including setting up a nationwide credit bureau that would give lenders information about prospective borrowers' creditworthiness. Equally important would be a modern bankruptcy law that allows borrowers - individuals and businesses - to restructure their debts, rather than face criminal sanction. The entire banking system would benefit by erasing red ink in a more timely fashion.
Lenders must have ways to pursue debtors. Established banking standards offer plenty of models to choose from. But debtor's prisons are debilitating to efforts to create a system with efficient lending practices.
Debt repayment strategies must be reconsidered. Requiring blank cheques as guarantees for a rental agreement or a loan, for instance, is a recipe for default. Smarter lending by banks, and securing debts with actual assets - rather than cheques - could mean fewer people running afoul of the law.
Bad debts raise issues of personal responsibility, but many borrowers also run afoul of the law for reasons other than profligate spending.
We must come up with a strategy for facilitating repayments by otherwise responsible borrowers who have fallen on hard times. A structured bankruptcy law would go a long way.
As The National reported yesterday, 1.5 million of 28.4 million cheques written for payments in 2011 failed to clear the bank. The reasons are varied: in some cases it could have been something as insignificant as a torn corner or an illegible signature.
The other cause concerns us more. It is illegal to write a cheque that bounces, and cheque-writers can end up referred to the courts and, in some cases, seeing jail terms. Debtor's prison is supposed to act as a deterrent. But in practice, this is a burden on the state, which is jailing people who are guilty simply of debt. It's also a burden on individuals who may end up behind bars, deprived of the opportunity to earn any income with which to pay off their debts.
In recent years there have been numerous proposals to deal with this problem, including setting up a nationwide credit bureau that would give lenders information about prospective borrowers' creditworthiness. Equally important would be a modern bankruptcy law that allows borrowers - individuals and businesses - to restructure their debts, rather than face criminal sanction. The entire banking system would benefit by erasing red ink in a more timely fashion.
Lenders must have ways to pursue debtors. Established banking standards offer plenty of models to choose from. But debtor's prisons are debilitating to efforts to create a system with efficient lending practices.
Debt repayment strategies must be reconsidered. Requiring blank cheques as guarantees for a rental agreement or a loan, for instance, is a recipe for default. Smarter lending by banks, and securing debts with actual assets - rather than cheques - could mean fewer people running afoul of the law.
Bad debts raise issues of personal responsibility, but many borrowers also run afoul of the law for reasons other than profligate spending.
We must come up with a strategy for facilitating repayments by otherwise responsible borrowers who have fallen on hard times. A structured bankruptcy law would go a long way.
