According to Al Etihad Credit Bureau

4 bounced checks within a year that reduce credit rating to the lowest degree

The Central Bank obligated banks to take measures against those who used to issue bounced checks.

Photography: Eric Arazas

Al-Etihad Credit Bureau confirmed that returning four checks to the customer, during a one-year period, lowers his credit rating number to the lowest degree, which is 300.

The company explained to Emirates Today that the customer’s credit report includes all the bounced checks, indicating the reason for returning each check, while the credit evaluation form includes the controls set by the Central Bank, in terms of number and various reasons.

She added that the credit rating number will indicate the lowest score, which is 300, in the event that four checks are returned to a person in one year.

Deprivation of funds

The banker, Mustafa Ahmed, told Al-Emarat Al-Youm that the drop of the customer's credit rating number to 300 degrees deprives him from obtaining any financing or loans for a period ranging between three and six months, so that he can present evidence to banks that he has already paid all his financial obligations that he wrote Checks with it then returned, and then addressing the credit information company to raise the evaluation number, stressing the need to be careful not to return the checks, and to ensure that there is sufficient balance before issuing them.

Current checks

It is noteworthy that the latest figures issued by the UAE Central Bank show that the value of checks that were traded through the Emirates Check Clearing System, during the first eight months of 2020, amounted to approximately 650.4 billion dirhams, while the number reached about 14 million checks, noting that the data The Central Bank does not show the number or value of bounced checks.

Penal Code

The penal code stipulates that the bank, which grants a new checkbook, is obligated against whom a judgment was issued in the bounced check case, to pay a fine of 100,000 dirhams.

The Commercial Transactions Law regulates checks cases, apart from the Central Bank Law, which has preferred not to intervene over the past years, despite company owners ’requests for flexibility in dealing with check cases.

The bounced check

According to the law, a bounced check (also known as a “check without balance” or “bad check”) is a check presented by the payee, and rejected by the drawee's bank, when the amount in the drawer's account at the time the check was issued is not sufficient to cover the mentioned amount. In the check, partially or completely, so the check is rejected by the bank, or when the bank receives an order from the check writer not to pay it, or when the drawer releases the check, or signs it in a way that prevents it from being cashed, such as deleting or changing his signature, or when closing the account The bank of the drawer before presenting the check to the bank.

Circular «Central»

In a previous circular issued by the Central Bank, in order to limit the phenomenon of bounced checks, the "central bank" stressed that the reasons for the return of the check must be summarized specifically in: insufficient balance, mismatch of signature, cancellation, closure of account, or freezing, or Seizure of it, or other reasons (to be mentioned).

On the other hand, the Central Bank obliges banks to take a number of measures against those who used to issue bounced checks, the first of which is to close the bank account of the customer in the event that he issued four checks and bounced them for reasons related to bad faith, such as insufficient balance. The central bank also obligated banks to inform him of the names of these persons, to include Their names are on the blacklist that it makes available to all banks.

Credit Score Number

The credit rating number of the customer is a triple number ranging between 300 and 900, and is approved by the banks to determine the extent of the customer's eligibility to take financing, credit cards, or others.

A low credit rating number indicates a high degree of risk for banks, while a higher number indicates a lower risk score, and it is calculated based on the behavior of the customer, who must review the evaluation number continuously, and is keen to be high, as it is often updated on a daily basis. On the company's systems.

The reduction of the credit rating number of the customer to 300, depriving him of funds from three to six months.

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