Wednesday, Apr 10, 2013
Dubai
The UAE’s banks are gearing up for a paperless payment system ¬- Direct Debit System (DDS) - from June 15 this year that will eliminate the extensive use of cheques as a mode of payments as the country seeks to decriminalise failure in payment obligation.
Cheque-based payments might become a thing of the past - from June 15, 2013.
“The implementation of Direct Debit will enable customers to make regular, automatic payments from their bank accounts towards mortgage loans or credit card payments or personal loan installments,” UAE Central Bank said in a circular on Monday.
Bankers say, it is a major shift from the existing system. Failure in payment obligation or installment could lead to the termination of services, a fine or a penalty. “The customer might still face a civil suit - as an extreme case, but might not face criminal charges, as before,” said an analyst. “But these details will become clear in the coming weeks as we move towards implementation.”
Although the move is in existence in developed economies, the introduction of the DDS is expected to streamline payment and reduce the hassles of collection.
“This system will help create database for the credit bureau in the UAE which is common in a developed economy. This will discipline the customer in terms of managing his/her finance and expenses,” Shaikh Abdul Karim, Senior Vice President and Head of Operations Control Division at Sharjah Islamic Bank, told Gulf News.
By Saifur Rahman Associate Editor
Gulf News 2013. All rights reserved.
