UAE | Government

Security cheques cannot be used to arrest defaulters

The UAE no longer considers a bounced cheque as a criminal offence

By Samir Salama, Asociate Editor
Published: 18:14 January 1, 2013

Image Credit: Supplied

Abu Dhabi: Dishonoured security cheques can no longer be used to arrest defaulters and convict them, in keeping with a decree by the President His Highness Shaikh Khalifa Bin Zayed Al Nahyan, a senior official said on Tuesday.

“The President’s instructions were that all defaulters including citizens and foreigners arrested or convicted for presenting dishonoured security cheques must be freed, any related cases being heard be suspended and any penalties handed down to these defaulters be annulled,” Jassem Saif Bu Asseeba, head of the Judicial Inspection Department at the Ministry of Justice, told Gulf News.

Bu Asseeba stressed that this ruling only covers security or collateral cheques for the total amount of a loan, commodity or job which lenders require borrowers or contractors ask clients to sign and that other cheques submitted towards fixed-term payments can still be used to file a criminal case if they are dishonoured.

Bu Asseeba added the police, prosecution and courts immediately enforced Shaikh Khalifa’s orders since November. “Judicial and law enforcement authorities have stopped accepting bounce security cheques as a criminal tool against debt defaulters,” he said.

Bu Asseeba, however, clarified that the move does not mean the rights of lenders are compromised as “they are still entitled to file cases with the civil courts to claim dues. Banks, financial firms and other lenders still have the right to present these security cheques to prove they are owed money by debtors.”

According to official statistics issued by the UAE Central Bank, out of 28.5 million cheques worth Dh1.2 trillion written in 2011 across the UAE, 1.6 million cheques worth about Dh55 billion were dishonoured.