If a cheque is issued without fund, it is marked NSF which means 'no sufficient fund'. Sometimes it happens when the issuer expects money inflow but he cannot collect his receivables, or if the cheque to fund it bounces, or there is a problem while the money is being carried or transferred to the right account.
For whatever reason, the consideration is when it is presented to the bank within the validity date (in the United Arab Emirates, it is three months after the date written), it must be properly funded, otherwise, it will be returned and there are some charges. The drawer may request for another cheque and if there is still a problem that it is not honored, he may lodge a complaint against the issuer.
MyMoneySouq.com wrote, "The law for cheque bounce is different in UAE and Dubai. In Dubai, if the issuer is found guilty for a bounced cheque, he will be levied fine that would be around AED2K to AED10K. Whereas in other parts of the UAE, the charges for cheque bouncing is detention in addition to the fine amount. A travel ban will be imposed on the defaulter until the case is dismissed."
There are those who think that fines will end up the problem for the criminal case, but if there is a civil case and if the Civil Court rules in favor of the plaintiff, the accused issuer of bounced cheques, according to Gulf News, could be asked to,
- pay the face (full) value of the cheque
- pay interest 12% from the issuance date
- pay legal charges
- face travel ban
- have assets frozen until final judgment
Fines for bounced cheques, according to the same article, are --
- AED2K - for bounced cheques with face value AED1 to AED50K
- AED5K - for bounced cheques with face value AED50K to AED100K
- AED10K - for bounced cheques with face value AED100K to AED200K
This reflects the goal of the government to improve the work processes and minimize the problems. As 2020 is just a few months away, definitely the authorities in cooperation with the private sector, communities and individuals, can come up with smarter and better preventive and curative solutions in dealing with financial challenges for the benefit and happiness of all.
We have read many stories of unfortunate ones who cannot find gainful employment as visas cannot be processed with some issues on bounced cheques because they lost their jobs, or simply put, they experienced some difficulties due to reasons beyond control. They cannot come up in the open out of fears or simply because their minds get foggy on how to begin to end their ordeals.
I read an article many years ago about a woman who courageously went to the bank to allow her to find another job, give her peace of mind while rebuilding her life, and allow her to pay 1% per month interest of the amount owe (diminishing balance), or 10% if paid for the year. So if it is AED10K, she had to pay AED100/month or AED1K for a year until she can pay in full or have it restructured later.
Linking the above with the Civil Court rules in favor of the plaintiff for civil cases related to bounced cheques, in the final analysis, her 1% per month payment request makes sense, at least, to move forward with peace of mind -- skipping the stressful court proceedings and all, aside from the time value of 1% every month it is paid.
We know that running away from debts is not the proper way of handling financial issues. Suicide must never, never be an option. Said options come to those whose minds are continuously strongly bombarded with threats as if there is no other option. They get emotionally weak, losing whatever hope and courage in them, particularly when there is nobody to turn to. They cannot imagine themselves in prison, because while inside they cannot earn money to pay their debts, and their families suffer as well.
Debts can be negotiated. Sometimes there are miracles. Good samaritans help, or the lenders themselves forgive such, though in very rare cases.
What stops many debtors in darkness to step forward is a big fear. They create monsters in their minds because of many threatening stimuli that leave trauma. The resilience is at a low level. What if the lenders change their approach in the collection, that instead of using collectors who harass the debtors, they create friendly faces through Community Social Responsibility (CSR) / outreach programs? Why not utilize the qualified debtors' services (part-time or full time) in exchange for fines or principal payment reduction? What about strategic collaborations or ties-up with typing centers/ business centers and business processing offices of good standing, through which debtors with bounced cheques can settle their fines so the officials in the judicial/legal bodies can attend to other matters?
With what is happening considering the various challenges we all face, we can help one another by passionately making a financially troubled person feel understood and guided just by sharing that there is light at the end of the tunnel and sooner or later he can take his life back.
As Adam Smith said,
What can be added to the happiness of a man who is in health, out of debt and has a clear conscience?
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Photo credits: Pixabay
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