When opening an account, UAE banks provide free checkbooks to account holders. So far, in 2018, 12 million checks have been issued across the UAE. Cheques are used for most payments. Processing the checkbook is simple if the terms and conditions on the checkbook are followed.
The validity of cheques in the UAE
Among the terms and conditions for processing checks, cashing a valid check is very important. Checks must be paid during the validity period. In the UAE, checks are accurate for six months from the date of issue. The bank rejects cheques issued after the expiry date. If the bank denies a check that has expired, the drawer can ask the issuer to release a new check. If the issuer does not provide a further check, the beneficiary can file a check return case. Cheque return laws are different in the UAE and Dubai. In Dubai, if the issuer is found guilty of bounced tickets, he will be fined AED 2,000 to AED 10,000. In other parts of the UAE, check bounce fees should be withheld in addition to fines. Violators will be barred from traveling until the case is dismissed.
The validity of returned cheques in the United Arab Emirates
Beneficiaries can file a refund check against the issuer within three years from the date of issue. In addition to the validity period, some specific details need to be ignored when holding a checkbook.
- Make sure payee name is written correctly
- Don’t overwrite the details on the check
- Enter the amount on the check correctly using numbers and text
- Don’t sign the check until you fill in the details
- Don’t leave empty checks signed before
- Make sure you hire the check successfully so that the bank can verify your records and if the signatures do not match, the check will be rejected
It should be noted that the issuance and circulation of cheques in the UAE are governed by the provisions of Federal Law No. 18 of 1993 on the Commercial Transactions Act (the “Commercial Transactions Act”). Following the requirements of the Commercial Transaction Law, it should be noted that checks should only be paid on the date indicated on the check. This is following Article 617 (1) of the law, which states: “Cheques should be paid on the date specified on the cheque (i.e., the date of issue).” Article 617, paragraph 2 of the law states: “Before that date, no cheque showing payment will be drawn.”
Based on the above provisions, it should be noted that a check should be presented for payment within six months from the specified date. This is following Article 618, paragraphs 1 and 2 of the law: “Cheques issued and paid at home or abroad shall be presented within six months. The time mentioned in the preceding paragraph shall be from the date indicated on the cheque Count as the date of the issue. ”
If six months have gone by from the time mentioned on the check, it may no longer be provided to the bank. It may be essential to note that if six months have passed from the date indicated on the check and your friend has presented the check for payment, then if you are subsequently refused to pay, criminal proceedings will be instituted against you.