Banks must return security cheques after loan repayment

UAE banks must return cheques given to them by clients against loans just after the debt is settled or the loan request is rejected, the Central Bank said.

In case any bank could not hand back those cheques for some reasons, then it must provide clients with a clearance certificate showing they had either paid all their debt or their loan application had not been accepted, a central bank official was quoted as saying by 'Emirat Al Youm' newspaper.

“Banks have no right to keep any cheques given to them by their customers as long as there are no obligations by those customers to the banks,” the unnamed official told the Arabic language daily.

“If this is not possible as some cheques and documents are destroyed after the end of the deal between the two parties, then banks must provide clients with a clearance certificate which could is considered an official document that can be used in a possible judicial case.”

The official said debtors who fail to take back their cheques or clearance from the lenders can file an online complaint to the central bank before going to court. But he noted that the central bank should be given some time to sort the problem out on the grounds banks could normally transfer those documents to their head office, which means the process will take time.

'Emarat Al Youm' said the comments by the central bank official followed growing complaints by borrowers that some banks refuse to return their cheques after their loan application is rejected on the grounds they have signed a paper allowing the bank to keep all documents submitted by them to obtain a loan or a credit card.

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