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Abu Dhabi: The UAE Central Bank on Sunday said it has implemented the new electronic image-based cheque clearing system, the Image Cheque Clearing System (ICCS), from July 12, thereby reducing the time needed for settlement to four hours from two to five days.
According to the previous system, the central bank's representatives delivered the cheques physically to the settlement department, where representatives from all banks settle the cheques manually, a lengthy and daunting task.
"During the initial operation of the system, cheques will clear within a maximum of 36 hours. This time will be progressively reduced over the coming months.... The system is capable of clearing cheques in four hours," the bank said in a statement.
Efforts to introduce the ICCS were initiated several years ago, but the Central Bank was facing hurdles as the UAE courts did not recognise images of documents.
"If a cheque is proved to be forged, courts did not recognise the image of the signature as proof of forgery, but this has been overcome now, as the Central Bank formed a committee along with several government entities to eliminate such difficulty," Saif Ali Al Shehi, the senior manager of the domestic banking division at the National Bank of Abu Dhabi (NBAD) said.
Consumers gain
"The system serves customers well, as the banks in the past were benefiting from the delay of the settlement and keeping the funds for three days, or even five days when the banks concerned belong to different emirates," he said.
Corporations and individual customers are now advised to secure the necessary funds instantly before drafting cheques, as the time-lag between cheque presentation and settlement will be reduced to hours instead of days.
"We advise all our customers now to ensure the availability of funds in their accounts before drafting any cheque, given the reduction of the time factor due to the efficiency of the new system which we have started deploying since Saturday," Hesham Malak, head of Standard Chartered's Consumer Banking, told Gulf News.
Have you ever faced problems because of cheque fraud? What happened? Do you think this new system will help make the clearing system more transparent or should more steps be taken? Tell us at letter2editor@gulfnews.com or fill in the form below to send your comments.
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