«Central»: written approval for banks to buy their shares

Fee-free information about the returned “check clerk”.

The circular specifies the information that must be provided to the beneficiary of the check in case it is returned.

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The Central Bank obligated all banks and finance companies operating in the country to provide the check holder or beneficiary with information about the customer who wrote the check without any additional fees when the check is returned for any reason, according to circular No. (599/2022) issued by the Central Bank. «Emirates Today», a copy of it.

The circular stressed that “in coordination with the judicial authorities, regarding the implementation of the new amendments to the law on commercial transactions related to the check, the drawee bank is required to commit to providing the check holder or beneficiary with information about the customer or the drawer, without any additional fees, when the check is returned for any a reason".

The circular enclosed a form for the banks that includes the information that they must provide to the beneficiary of the check, in the event of its return, including the date, number and value of the check, the reason for the return of the check, the name of the customer who draws the “check writer”, his identity number, telephone number, his detailed address, his account number and his international account number, as well as a copy of the check returns.

It is noteworthy that the banks operating in the country, as of last January, started implementing the new amendments to the Commercial Transactions Law regarding the decriminalization of the check without balance and the amendments related to the “partial fulfillment” of the check.

In addition, and in another matter, the Central Bank stated that “the bank may not own, repurchase or deal directly or indirectly with its shares, without the prior written consent of the Central Bank, unless those shares have devolved to it to settle a debt.”

And the “Central” set the maximum allowed for purchase, pointing out that “the bank is not allowed to buy, own, repurchase or acquire any amount of its shares in excess of 10% of the paid-up capital of the bank.”

This came in the system of "banks owning their shares", which was published by the "Central", yesterday, on its website.

The Central Bank added: “When the shares are transferred to the bank to settle a debt and this leads to the bank’s possession of its shares in excess of the maximum permissible limit, which does not exceed 10% of the paid-up capital of the bank, the bank must sell the surplus shares within two years from the date of acquisition.” .

And he indicated that “the Central Bank, when granting any approval, may request any information it needs so that it can take the appropriate decision or impose any restrictions or conditions it deems appropriate,” stressing that “the banks that breach, or are likely to breach, any provision contained in this. system, inform the Central Bank of this in writing and immediately.”

He said: "Violation of any provision of this system and any of the accompanying standards will lead to being subject to regulatory procedures and sanctions, as deemed appropriate by the Central Bank."

• Violation of any provision of this system leads to being subject to supervisory procedures and penalties, as deemed appropriate by the Central Bank.

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