Banks obliged to make partial payment against cheque amount and let rest amount bounce.
Dubai: The latest changes to the UAE’s Commercial Transactions Law will enhance the force of cheques as a payment instrument and cut time on beneficiary’s claim.
Last September, the UAE Cabinet amended certain provisions of Federal Law No 18 of 1993, the Commercial Transactions Law, including those related to bounced cheques. The new law will create a mechanism that will ensure the collection of payments through cheques, such as obliging banks to partially pay the amount after deducting the total amount available to the beneficiary.
Wageh Amin Abdelaziz, senior legal adviser at World Center Advocates and Legal Consultants, told Gulf News that the new changes are a giant leap into the future and will effect major and quick results when it comes into force by January 2, 2022.
“The changes will cut time and effort on the part of the beneficiary of a cheque as the decree makes bounced cheques an executive document to be executed directly by an appropriate judge in court. The changes will help overcome challenges with commercial dealings and with securing payments,” said Abdelaziz.