“UAE not ready to decriminalise bounced cheques,” says Mashreq boss

The UAE cannot decriminalise bounced cheques because the paper payment is still crucial to the financial system, the head of the country’s banking association has said.

Making the offence a civil matter rather than criminal – and punishable with jail – has been an ongoing point of discussion and has the support of numerous banking officials.

However, UAE Banks Federation chairman AbdulAziz Al Ghurair said the country was not yet ready to decriminalise cheques.

“We cannot [decriminalise bounced cheques] due to the lack of alternative methods to guarantee payments,” he said on the side lines of an event for Mashreq bank, of which he is CEO.

“The whole country’s trade system is based on the cheque system. It is the tool for recovering one’s money.”

Cheques are the most common form of payment for renters, cars and property deposits in the UAE.

While cheques are rarely used in some other countries, with bank transfers the more common option, Al Ghurair said bouncing a cheque had to remain a criminal offence until alternative modes of payment were implemented in the UAE.

“What else is there to protect properties otherwise?” he said.

“The UAE is not the only country that criminalises bounced cheques, it is a system followed in many other countries.”

However, he called on courts to process such offences faster.

“Why should it take four to five years to get back a cheque of AED25,000 ($6800)?” he said.

“This puts unnecessary pressure on the courts. These cases should be settled in one court session.”

Meanwhile, he said Mashreq was not interested in purchasing Standard Chartered’s assets in the UAE.

Instead, the bank was targeting Egypt and Turkey for expansion.