The UAE and Dubai have always relied more heavily on payment via cheques rather than electronic bank transfers or payments via debit or credit card. This has meant that cheques have become an integral part of the financial system of Dubai. Electronic funds payments were only introduced to the country in 2013, just under five years ago. While there are no issues with making payments via cheques, in Dubai, a bounced cheque, on the other hand, is a serious criminal offence. You might be thinking how so? The law says that if you were to write a cheque which when writing it out you knew there were insufficient funds in your account to pay for it that is where the criminal offence takes place. Until recently, the punishment for a cheque bouncing was jail time. But, in a shock move, the penal code of Dubai has recently been changed. Court fines have replaced jail time for many minor offences, such as the bouncing of a cheque. Of course, this approach "jail time for a bounced cheque" was regarded as an outdated approach by many. An approach that created a somewhat hostile environment for many businesses, as well as for anyone who signs cheques on a regular basis. Anyone who in bad faith wrote a cheque that went on to bounce would be at risk of jail terms. The issue was that was not always possible to determine when a cheque was and wasn’t written in bad faith. Luckily that has all changed, thanks to the new ruling that uses fines to punish the senders of bounced cheques, rather than jail time. The new ruling that came into effect in December of last year means that people who are responsible for bounced cheques will now be issued fines. The amounts are as follows:
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