Cheque Writing in the UAE
Cheques play a critical role in your finances here in the UAE. We’ll show you exactly why in this article.
But first, let’s go over the layout. The first thing you’ll notice is that these cheques appear very similar to the cheques in the U.S. or Europe. You’ll have the name of the addressee at the top, the cheque amount in the middle, and the signature area at the bottom. Banks will often give you the option to have both your cheques and monthly account statements in either Arabic or English, so if your Arabic feels a bit rusty, make sure you mention this during the signup phase.
UAE Money Expert advises you to always have the proper funds in your account before issuing a check. Unlike banks in the U.S. or Europe, UAE banks consider overdrafts to be a criminal ofense and will contact the authorities if the overdraft is substantial enough. If the overdraft is slight, you’ll still be issued a hefty fee and may be contacted directly by the bank. So be wary and stay within the boundaries of the law.
Crossed and uncrossed cheques
You’ll encounter two types of cheques here in the UAE. Crossed cheques ensure that the recipient’s account is the only account that the money can be released into. Uncrossed cheques don’t have this guarantee, and the money could technically be released into any account designated by the individual.
If you’d like to issue an uncrossed cheque, to be certain that it’s deposited into the correct account, you’ll have to locate the crossed area of the cheque and write in “A/C Payee Only.” This will guarantee that the money is released into the proper account.
For obvious reasons, a crossed cheque is the safer bet. You can identify a crossed cheque by locating the crossed area of the cheque and verifying whether it has the “A/C Payee Only” stamp across it.
Lost or stolen cheque books
Once you’re certain that your cheque book is missing, contact your respective bank and request that they halt any transactions from that book immediately. You will bear no responsibility for cheques cashed from that book once you’ve spoken with a representative of your bank.
You may be able to halt a cheque from being cashed. The sooner you explain to your bank what is going on, the more likely it is they will do something about it. If the situation is serious enough you stand a good chance of having that cheque cancelled before it can cause harm to your account.
Paying cheques that are drawn on banks outside the UAE
In such a case, expect a much longer transaction time. Waiting for the bank to clear the cheque can be a time-consuming process, and it may not be ideal if you need the money on time every month. One possible work around is to ask your UAE bank if it retains correspondent status with the other bank outside the UAE. This should help to alleviate much of the cheque clearing process.