UAE banks have started enforcing rules by the Central Bank to turn down old cheques and accept only those with high security standards within a drive to combat forgery and ensure monetary stability.
In a report on Monday, a newspaper quoted bankers as saying the country’s 23 national banks and 28 foreign institutions stopped accepted old cheques from yesterday following instructions by the central bank last year.
“As from yesterday, banks in the UAE stopped accepting cheques which do not conform to security standards set by the Central Bank,” the semi official daily Alitihad said, quoting Mohammed Berro, CEO of Alhial Bank.
It quoted another banker as saying all banks were able to meet the deadline set by the central bank to enforce the new cheque system.
“The Central Bank gave banks a sufficient deadline…there was no problem or confusion in enforcing the new rules,” said Mutaz Al Ghalayini, director of central operations at the government-controlled Abu Dhabi Commercial Bank.
But he noted that banks would accept old cheques which are postdated provided bearers sign a statement showing they received those cheques before March 31 last year, the deadline given for banks to stop issuing old cheques.
UAE banks, which control the largest asset base in the Arab region, have already stopped issuing old cheque books for clients and are replacing existing books with new ones that are compatible with those defined by the Central Bank.
In a circular to banks in late 2009, 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.
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.