Landlords want new rent cheques as banks 'bounce' old ones

Landlords have put up notices in their buildings, asking tenants to replace the old rent cheques issued last year, as banks have stopped accepting them.

“Kindly bring new cheques as old cheques are no longer being accepted by our bank,” said a notice posted in one building.

An owner of a building in Bur Dubai told this website: “We deposited a couple of rent cheques last month, but they still haven’t been cleared. Our bank told us that they are processing the cheques, but it will take a lot more time. So we have asked our tenants for replacement of the cheques.”

M Dimitre, who deposited a rent cheque early this April, still hasn’t got the amount credited to his account.

“I deposited a rent cheque in April. Even after a month, it hasn’t got cleared. I cannot get the cheque back as the bank says it is processing it. I have asked my tenant to pay me the rent for the next quarter in cash, or provide me with a new cheque.”

Property management companies, however, have taken the requisite precaution beforehand by not accepting any old cheques from tenants on renewal or for a new lease.

Zubin Firozi, Head of Property Management, Head Office, Better Homes, mentions: “In the beginning of 2010 we had notified most of our tenants of Central Banks’ regulations of the cheques, and the tenants on their renewals provided us with their new cheques.

“For new leases we had only a couple of cases where we faced this issue of the old cheque taking time to be processed by the bank, but since then we have been quite vigilant and only accept the new cheques from tenants,” he adds.

It was reported in January last year, UAE banks had 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. Banks, nevertheless, continued to accept old cheques.

In a circular to banks in late 2009, the UAE Central Bank asked banks to switch to the new money tools in a bid to prevent fraud and set a deadline at the end of 2010. It 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.

Read earlier stories...

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.

UAE banks enforce new cheque rules

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.

 


 

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