Arab Today, arab today saudi mulls new law on bad checks
Last Updated : GMT 21:25:08
Arab Today, arab today
Arab Today, arab today

Saudi mulls new law on bad checks

Arab Today, arab today

Arab Today, arab today Saudi mulls new law on bad checks

Jeddah - Arabstoday

Officials from the ministries of Interior, Justice, Commerce, Finance and the Bureau of Investigation and Prosecution (BIP) are studying new proposals related to checks that bounce for insufficient funds. The proposals include obliging banks, via executive judges at general courts currently or commercial courts in the future, to impound the funds of the drawer if the amounts in his bank account do not cover the check. The impounded money would then be disbursed to the check holder and the outstanding amount treated as due to him. These proposals come after the finance section at the BIP and the Ministry of Commerce and Industry’s committees on commercial paper disputes noticed a rise in the number of such cases. A bounced check drawer is punished by immediate detention according to regulations. In many recent cases, holders of bounced checks requested banks to disburse whatever funds the account holder had after they found that the fund does not cover the check they received. But banks do not have the authority to do so, sources were quoted as saying by an Arabic newspaper. Recently a check for SR 300,000 was issued to someone who found the man who issued the check had only SR 270,000 in his account. The bank refused to give him the money despite the fact the check holder was ready to accept the lesser amount. The reason he was ready to forgo SR 30,000 was he knew it would take a long time to pursue the case. Moreover, he was interested in getting his dues more than having the bad check drawer arrested. The proposed regulation may give executive judges at general courts the power to have the check’s amount seized from the account in the bank the check is drawn on and from and any other bank account of the drawer and paid to the holder. Ministry of Commerce and Industry’s official lawyer, Saad bin Misfer Al-Malki, said there is need for amending the commercial paper regulation for punishment against those who issue bad checks. Failing to pay the amount has to be sanctioned with imprisonment or fines or both. Al-Malki estimated the total value of bounced checks in the country in the past five years at SR 10 billion. Sources at Jeddah court said the cases of bounced checks being processed constitute 30 to 40 percent of commercial dispute cases. Arab news

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