Abu Dhabi: “Clients who issue four bounced cheques or more will be blacklisted,” a Central Bank official told the Gulf News.

“The banks have the right to close the customer’s accounts if they have exceeded the four bounced cheques within one year,” the source added.

“In case some of these banks have chosen to keep customers’ accounts, then they should comply with all resulted legal rules and obligations,” explained the source.

“The purpose of this new rule is to reduce court cases due to bounced cheques especially with small sums,” the source pointed out.

“It has been noted a large number of lawsuits filed in court in recent years due to bounced cheques as well as the disappearance of those who issued cheques without balances. So, the action was needed to control issuing cheques and ensure repeating such cases,” the source added.

In August 2011 the UAE Central Bank announced that any residents who issue four bounced cheques within one year will receive a 12-month ban, have their accounts suspended and be unable to open any new accounts for the blacklisted duration.

In 2011, the total number of the presented cheques were 28,499,858 million worth Dh1,219,003,518,373.00 which is Dh1.2 trillion, UAE Central Bank statistics showed.

The statistics

The returned cheques total number were 1,583,015 worth (Dh55,337,963,265.71). the percentage of returned cheques in 2011 was 5.55 per cent and the percentage of amount of returned cheques was 4.54 per cent.

According to UAE Central Bank figures, the presented cheques for January 2012 were 2,423,441 with an amount of Dh99,550,197,208.00 compared to 2,416,448 for the same period in 2011 worth Dh91,496,613.00.

According to the bank, the count of returned cheques of total cheques presented for January 2012 were 130,954 with an amount of Dh5,247,254,989.34.

“The percentage of returned cheques of the total cheques presented for January 2012 was 5.4 per cent and the percentage of the amount of returned cheques of the amount of total cheques presented was 5.27 per cent,” according to statistics of the Central Bank.

UAE circular

The Central Bank has issued a circular pertaining to three main issues: personal loans, auto loans and the overdraft.

The Central Bank’s circular ends the internal contracts used by banks.

A lawyer who declined to be named told Gulf News that these agreements or the so called “unified contracts” only serve banks which have the right to amend and terminate the contract while the clients or customers cannot.”

“Customers are penalised and if they have an issue against the bank they cannot penalise the bank,” added the lawyer.

He complained that the banks have been granted full authority to secure its rights even on the insured loans from insurance companies and the heirs.

The new rule was circulated in May and will be applied effectively starting from July 1.