New cheque deadline extended to year-end

The UAE Central Bank has extended a deadline for banks to replace old cheques with new more secure books by six additional months until the end of the year to avert any confusion in the financial sector, a newspaper said on Tuesday.

The new safer cheques that would replace old cheques in use over the past decades will now be enforced on January 1, 2012 instead of July 1, the Arabic language daily Al Khaleej said, citing informed banking sources.

The Central Bank agreed to extend the deadline at the request of the country’s 23 national banks and 28 foreign units on the grounds that new cheques in circulation do not exceed 70 per cent of total cheques currently in use.

“Banks said they need a further six months to reach a reasonable level and create more awareness among its customers after many of them have not yet responded to banks’ requests to replace their old cheques,” one source said.

“The Central Bank agreed to their request to delay the deadline until the end of this year to avert fresh turmoil in the banking sector… the new deadline should allow banks to raise that level to over 90 per cent.”

In a circular to banks last year, the Central Bank asked them to switch to the new money tools in a bid to prevent fraud and set a deadline at the end of 2010. It later extended the deadline to July this year.

The circular also told the banks to ensure that the new cheques to be issued are Thermo-chromic Sensitive and Chemical Sensitive.

“While being thermo chromic sensitive will prevent fraudsters from using the colour photocopy of cheques to cheat unsuspecting people, the chemical sensitivity will render it impossible for anyone to tamper with the signature or remove or alter the content on the cheque leaf,” it said.

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