New UAE law: 11 things all bank account holders should know

Changes to UAE’s Commercial Transaction Law – which include narrowing the scope for criminalisation of returned or “bounced” cheques due to insufficient funds – came into effect in the UAE earlier this week..Here are 11 things all bank account holders should know:. Banks operating in the UAE can no longer stop payment against a cheque even when the cheque drawer’s account does not have enough funds to cover the full amount. Instead, they can make partial payments. For example, if the cheque value was Dh100,000 and the account had Dh75,000, the bank would have to pay Dh70,000. The cheque’s bearer may accept partial payment of the cheque’s value and postpone the remainder, if that is deemed to be in her/his interest, or if the drawer’s financial condition is poor, or if it is in his interest to save whatever can be saved from the debt. While accepting a partial payment against a cheque, the bearer may request the drawee bank to mark the partial payment on the back of the cheque and the bank should issue a certificate along with it confirming the partial payment. The bank should keep a copy of the partially-paid cheque and a copy of the partial payment certificate issued by it. According to law, the cheque bearer has the legal recourse for the remainder of the original cheque as an executive document after partial payment to go ahead with a civil case against the drawer if the drawer refuses or has no capacity to pay. If the cheque issuer asks the bank before the date of encashment of the cheque not to encash the cheque, or withdraws the entire balance of the account before the cheque is presented to the bank, or deliberately writes a cheque in a way that prevents it from being encashed, the punishment for such cases can be imprisonment between six months to two years and fine for a minimum of 10 per cent of the cheque amount and not less than Dh5,000. Punishment for the forgery of cheques shall be imprisonment for a minimum of one year and fine between Dh20,000 and Dh100,000. The same punishment will apply to anyone using a forged cheque or obtaining money by using a fake cheque under a different name or if using a cheque linked to fraud. The court has the right to order a ban on the convicted person from practicing any commercial or occupational activity for up to three years if the crime occurred in the capacity of practicing a business. In case of repetition, imprisonment for minimum one year and a fine between Dh50,000 to Dh100,000. The cheque issuer can request the bank to stop payment in only two circumstances. One, if the cheque bearer loses a cheque, and it’s obtained by someone using fraudulent means; two, in case of a bankruptcy declaration. If the issuance of the bounced cheque is in the name of, or for the benefit of, a corporate person, the person in charge of actual administration shall not be liable to punishment unless it is evident that such person has been aware of the crime or that such person has committed the crime for the benefit of himself or third parties. Where the liability of the natural person is not evident, the legal person shall be subject to a penalty of no less than twice the legally applicable penalty for this crime and no more than five times of it.