Bounced Cheques

Legal Consequences of Cheque Bounce in the UAE

The legal consequence of a cheque bounce is determined by the cheque amount and the reason behind the case.

• Civil Offense: Since the amendment in 2022, most of the cheque bounce cases have been treated as civil offenses rather than criminal offenses. It will bring amicable settlements between parties who are involved.
• Fines: The penalty amount differs based on the cheque value. There will be a fine of Dh2,000 for Dh50,000, while bounced cheques of between Dh50,000 and Dh100,000 will have to bear a Dh5,000 penalty, with a penalty of Dh10,000 for cheques between Dh100,000 and Dh200,000.

If the cheque value is less than AED 200,000, the issuer may avoid criminal proceedings by paying a fine. 

• Partial Payment: Except where the beneficiary refuses, the banks must release all available funds in the issuer’s account for the purpose of making partial payment.

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Steps to Handle a Bounced Cheque

If you have presented a cheque that has bounced, the following should be done as soon as possible:

• Verify the Cheque Details: Check for errors in the cheque such as the date or amount or signature. Be certain that there were no issues when the cheque was presented at the bank.
• Contact the Issuer: Reach out to the person or business that issued the cheque. In some cases, the issue could be resolved informally if the issuer is agreeable to fixing the issue.
• Partial Payment Option: The bank must check if there are any available funds in the account of the issuer and give you a partial payment for it. You would either accept this or proceed with civil action.
• File a Civil Case: If the cheque is not paid, you may institute a civil suit for the recovery of the amount. Fast track proceedings are available in such cases.

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