Oman: Banks Have to Maintain Bounced Cheque Defaulters List

Oman News developments

Oman: Banks Have to Maintain Bounced Cheque Defaulters List

Oman Daily Observer, 1 October 2023: Oman’s Central Bank has approved a Decision requiring banks to maintain a list of bounced cheque defaulters.

Oman Resolution No. BM/9/57/2023 regulates the direct debit system and bounced cheques.

Among other things, licensed banks must provide all details related to bounced cheques, especially details relating to account holders who have two or more bounced cheques in a month, four or more bounced cheques over six months, or six bounced cheques within one year, regardless of whether those cheques were returned through one or more banks.

Banks also have to provide the names and IDs of the owners of the bounced cheque, the numbers and dates of its issuing and return, the amounts, beneficiary names and the reasons for it bouncing.

In addition, they must provide any other information specified by the Central Bank for the purposes of analysing information and setting policies.

Licensed banks will be responsible for the accuracy and updating of the information related to the bounced cheque.

The Central Bank or the hosting entity will prepare a unified warning list of the names of the account holders based on the information received from the licensed banks.

Licensed banks, financial institutions, credit bureaus, their participating members, and others, as determined by the Central Bank, may also review the warning list to benefit from it for the purpose of assessing credit status and financial solvency.

Licensed banks or any authorised person may not use the system to benefit from information related to the bounced cheques for the purposes for which it was requested.

Licensed banks must also exercise caution when dealing with account holders whose names appear on the unified warning list and must withdraw cheque books from them. They must also not open current accounts for them and refrain from providing them with direct debit services for one year from the date of returning the returned instrument, without prejudice, apart from imposing any fines or actions determined by the Central Bank.

Licensed banks may remove the name from the list if account holders of those returned cheques have settled their obligations towards the beneficiary too.

Licensed banks should obtain a document proving settlement and maintain evidential documents as well.

The Central Bank may fine violators 20,000 Rials.

Also reported in Shabiba on 1 October 2023. For the full story, read here.

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Tanya Jain