Blank cheques identified as main reason behind improsinment in Dubai

Published June 24th, 2014 - 10:07 GMT
Cheques worth 2.23 billion bounced in the first three first months of this year.
Cheques worth 2.23 billion bounced in the first three first months of this year.

 The long-standing practice of borrowers issuing blank cheques to lenders as guarantee of payment is one of the reasons people end up in prison, Dubai Police said on Tuesday.

“We want to change people’s and companies’ mentality about cheques. Cheques should be used to fulfil monetary transactions and not as a guarantee that a certain amount will be paid,” Colonel Abdullah Khadim Surour, Director of Al Barsha Police Station, said at a press conference on Tuesday.

The warning came as Dubai Police launched a new campaign to raise awareness about bounced cheques and cheques issued in bad faith. The campaign will run for two weeks.

The seriousness of the problem cannot be overstated1, police said, considering that people jailed for bounced cheques can only leave jail once they can repay their debts.

Col Surour said the prevalence of claims arising from bounced cheques includes both men and women of all ages.

Brigadier Mohammad Nasser Al Razouqi, Deputy Director of the Department of Criminal Investigation (CID) for centres and police stations, said that when someone reports a bounced cheque, police first try to contact the person who issued the cheque.

“We call them and give them a month grace period to pay their dues, if they refuse or they cannot, then the case goes to public prosecution.” Al Razouqi said.

Many of the cases get resolved without needing to go to court.

Statistics provided by police yesterday showed that a grace period has helped recoup outstanding money before matters end up in court.

In 2011 there were 69,054 reports of bounced cheques of which 15,778 were resolved amicably without having to go to court as compared to 2012 there were 68,707 reports of which 20,512 were resolved.

In 2013 there were 79,525 reports of which 20,046 were resolved without going to court.

According to police records, the value of bounced cheques issued in Dubai in 2011-13 was Dh36.2 billion. In 2011, the value of bounced cheques was Dh14.6 billion, it feel to Dh12.2 billion in 2012 and further declined to Dh9.4 billion in 2013.

Cheques worth 2.23 billion bounced in the first three first months of this year.

Of all cheques issued in 2011-13, 110,554 were issued by people aged 18 to 35, 85,363 where issued by people aged 36 to 53 and 4,589 were issued by people aged 54 to 71.

Banks, Al Razouqi said, should not issue cheque books to people with previous cases of bounced cheques. He advised banks not to give loans to people who are not creditworthy.

“We had a case where the bank gave a credit card, a personal loan and a car loan to a man who earned Dh2,000 a month. How is it possible that this man can pay off all those debts?” 

Col Surour said the prevalence of claims arising from bounced cheques includes both men and women of all ages.

Brigadier Mohammad Nasser Al Razouqi, Deputy Director of the Department of Criminal Investigation (CID) for centres and police stations, said that when someone reports a bounced cheque, police first try to contact the person who issued the cheque.

“We call them and give them a month grace period to pay their dues, if they refuse or they cannot, then the case goes to public prosecution.” Al Razouqi said.

Many of the cases get resolved without needing to go to court.

Statistics provided by police yesterday showed that a grace period has helped recoup outstanding money before matters end up in court.

In 2011 there were 69,054 reports of bounced cheques of which 15,778 were resolved amicably without having to go to court as compared to 2012 there were 68,707 reports of which 20,512 were resolved.

In 2013 there were 79,525 reports of which 20,046 were resolved without going to court.

According to police records, the value of bounced cheques issued in Dubai in 2011-13 was Dh36.2 billion. In 2011, the value of bounced cheques was Dh14.6 billion, it feel to Dh12.2 billion in 2012 and further declined to Dh9.4 billion in 2013.

Cheques worth 2.23 billion bounced in the first three first months of this year.

Of all cheques issued in 2011-13, 110,554 were issued by people aged 18 to 35, 85,363 where issued by people aged 36 to 53 and 4,589 were issued by people aged 54 to 71.

Banks, Al Razouqi said, should not issue cheque books to people with previous cases of bounced cheques. He advised banks not to give loans to people who are not creditworthy.

“We had a case where the bank gave a credit card, a personal loan and a car loan to a man who earned Dh2,000 a month. How is it possible that this man can pay off all those debts?”

 

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