Cheque Bounce in UAE Everything You Need to Know About It

1. Cheque Bounce in UAE: Everything You Need to Know About It Many people consider cheques to be an outdated method of payment. However, some individuals and businesses still prefer to use them in lieu of cash or digital payments due to the convenience and safety they offer. It’s important to ensure that all checks you issue are funded sufficiently, because a cheque bounce in the UAE can be a big legal headache. Why do cheques bounce? There are several reasons that cause a cheque to be returned. Here are the most common ones:  Non-availability of funds equal to or more than the amount of the cheque on the date of issue Technical errors such as mismatched signatures, wrong dates, and over-written or scribbled text Closure of the bank account before the cheque is encashed A bank instruction to withhold payment against the cheque    The laws concerning a cheque bounce in the UAE Did you know that a bounced cheque in the UAE is a criminal offence? Most countries would consider this situation as a civil offence; however, Article 401 of the UAE Penal Law states that confinement shall be inflicted on any person who commits the following in bad faith:     Draws a cheque with no existing or drawable provision Withdraws all or part of the fund after issuing the cheque Orders the drawee not to pay the cheque Deliberately makes or signs a cheque in such a manner that prevents it from being paid

2. If the cheque amount is less than Dh 200,000, a fine of Dh 2,000 to Dh 10,000 may be imposed. However, the person who received the cheque may still file a case with the court. In this scenario, the issuer will be presented with two options; pay the fine or go to jail. If you or anyone you know is dealing with a cheque bounce in the UAE, the first thing to do is contact a criminal lawyer. Experts in criminal law will inform you of the different regulations governing cheque bounce cases, providing advice on the best course of action for your situation.