New Strange Law for POST DATED CHEQUES
Source: Gulf-times, Dtd:23.12.2009
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Cheques will be encashed immediately on presentation at a bank irrespective of its issuing date, according to the relevant provisions of Qatar’s Commercial Law, which takes effect on May 13, 2010.
According to Article 580 of the Commercial Law of Qatar (Law No.27 of 2006), the cheque shall be ‘payable at sight’. In the event the cheque was presented before the date set as its issuing date, the instrument shall be paid on its presentation date.
If a cheque bounces for lack of funds when presented at a bank, the drawer will be liable for its value and he/she may be prosecuted, convicted of a penal offence, fined or imprisoned, sources said yesterday.
The provisions of the law take effect in May next year following the expiry of the three-year period notified after its implementation. The law was issued on July 27, 2006 and implemented six months after gazette publication.
Effectively, the system of issuing ‘post-dated’ cheques will get scrapped with the law taking effect, a senior banker told Gulf Times yesterday.
He said QCB had already notified the local banks about the relevant provisions of Commercial Law of Qatar taking effect in May next year.
“This has already been published in Qatar Central Bank Regulations Handbook,” the banker said.
Legal expert Nizar Kochery said drawers of cheques would no longer be able to rely on their instruments being cashed on or after a “future date”.
“The days of post-dated cheques have gone. Cheques can be presented for payment anytime after they are handed over to the drawee. The banks will be required to honour and pay the cheques immediately on presentation, Kochery said.
It is the drawer’s responsibility to ensure he/she has sufficient funds before issuing a cheque. If funds are not available at the time the cheque is presented, the drawer “may be prosecuted” for a criminal offence, it is learnt.
“The drawer may be prosecuted, convicted of a penal offence, fined between QR3,000 and QR10,000 or imprisoned for a period ranging between three months and three years,” a source said.
A local bank’s chief operating officer said: “We are working with QCB to ensure effective implementation of the law governing cheque issuance. We will sit together with Qatar Central Bank to see the customers’ interests are safeguarded.”
Many residents who spoke to Gulf Times hoped QCB would clarify the status of post-dated cheques they have already issued for a period beyond May 13, 2010, when the relevant provisions of Qatar’s Commercial Law take effect.
I've learned this law has been put in abeyance, from someone at work.
anyone has got more details on this ?
for tenants like us who pay rent thru PDCs...some landlords may be tempted to encash all the PDCs in one go and dupe us (this is in case there is sufficient fund in your account that the landlord is able to encash all the checks). with this law it would be scary for those who have already given out PDCs not because they won't have funds but because they can easily be duped now by unscrupulous people.
I am just thinking, how to sleep in jail on standing basis? (if there's still space to stand) most of the expats issued pdc's for their houses, are they going to prosecute these all?
I am afraid!
are they really going to implement this law within the next coming days?
because that allowed me to renew my rent, in a monthly payment without PDC, i took advantage of the law...
they know that people did not go for these options (especially with cars) because they only in need.
I'm just wondering, if the landlord asks for cheques and you won't pay him of course because you got no money ... What would be his assurance that you will pay him monthly in time??
Would it do them any good if i were sent to jail? Who is going to pay for the 3 or 5 years car loan monthly? The neighbors?
Do not dwell in the past, do not dream of the future, concentrate the mind on the present moment. (Gautama Buddha)
What to do with rents
Do we need to deposit one year rent in advance, if landloard asks for cheque?
what a starnge law is this ?
I am really confused
If you have no money and your rental company is asking for Cheques, forget about ti and live on the streets ...
If you want to take a car and got nothing in your bank account, forget about it and ride a bike.
Do not dwell in the past, do not dream of the future, concentrate the mind on the present moment. (Gautama Buddha)
This is not a"World Standard"
As mentioned above many countries around the world ALREADY treat checks this way, in fact in some countries it is a crime to draft a post dated check. And all the gloom and doom about what will we do now is nonsense, again this system ( no PDC's)works and works very well in many places.
A check is not and was never meant to be a promissary note (IOU), it is a bank draft that is suppose to be treated as cash. It is a document that says you are entitled to withdraw XXX amount from my account. You go to the bank and make that withdrawal from the drafter's account.
This law is a positive step to bringing forth meaniful financial reform. The big problem is simply how to handle the "transition period".
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"A Wise Man knows what he does not know!"
Strange law,.. I feel something is missing here,.. this is a world standard that cannot simply change,...!!
what about the cheques that have already been given before? will they return those back or will they take advantage and deposit them straight away?
This will sure take time to get used to.
Then there should be no part on the face of the check that requires the date, since the check will be negotiated at the time of its presentation.
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Everything happens for a
reason.
The requirement by banks and landlords for the issuance of post dated cheques is to protect the lender or the landlord. That way they can send you to jail if the cheque bounces (as opposed to just a past due debt, which they cannot jail you for). As a borrower or a renter do you really feel that the ability of the bank or landlord to send you to jail if you don't pay the loan or the rent somehow protects you? The new law which effectively bans post-dated cheques protects you from that kind of abuse.
Well, it will be really a NIGHTMARE for all of us till this law is being implemented by Q.C.B.
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Even if this idea fails but still till that day all those seeking financial help from May will suffer alot. Financial Institutes will also hit hard too as the policy & procedure will completely be changed after this law
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Moreover, personal financial help from individuals will flourish and they will charge higher too coz they will not be abiding by QCB law. None of us will approach financial institutes instead will be looking for such individuals who can lend money by taking PDC. Money Laundery will increase too.
ExpatinQatar, I agree that the word 'banker' should be used with care. I have often come across bank clerks introducing themselves as 'bankers'. It is like a janitor in hospital calling himself a neurosurgeon.
The concept of a cheque being honored on the date mentioned is followed in many developed nations and big economies around the world. the same is followed in US, Europe, Japan, India and other countries in GCC.
i dont know whose 'wise' idea is this?
Even if Q.C.B. is intending such system still we have to wait for that date when it will become LIVE for all banks in Qatar.
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Q.C.B. has many projects pending which doesn't mean that Banks in Qatar start to operate accordingly.
There is a light at the end of the tunnel then.
ExpatinQatar, please provide us with a link or a document of such announcement.
It is the QCB failure that no one (of the public) knows their new regulations, and after all, we need a working facility to solve the problem , not a regulation. I just checked my online account with QNB, nothing new.
I'm surprised to see that some ppl call themselves bankers and they don't know new QCB regulations. QCB has already announced that they are implementing a new electronic credits/debits system to replace PDCs which is currently used. This system will connect QCB with all banks in the country in order to deploy Direct Debit and Direct Credit payment transactions. Direct Credit is primarily used for processing payment of wages and salaries. The most prominent examples of Direct Debit are for payments of utility bills, insurance premiums and installment loan payments.
I plan to rent a property next month.
What should I do ? Should I insist on not issuing a post-dated cheque (After all, come May I will be the party responsible if the owner cash my check all at once) ? What if the landlord/agents is dragging their feet in adopting this rule ?
Suggestion is most welcomed
Cheers
SK
it should be like that in "CONTRACTS"
Things will be fine if both the tenant and the landlord "agree" on how to do it. The problem arise when things does not go as "agreed."
I would not think that my landlord wakes up in day and take all my checks to cash them all at once.
But he can, and why would I take that risk?
the article says that the post dated cheques can be presented before the actual date on it. then probably we should include in our rent contracts that the owner will submit the cheques for clearing after the date mentioned on the post dated cheques.
It is the responsibility of the tenant to pay the rent on time.
The law will not permit delay of payment for lack of "convenient" payment options. Hence, I doubt that they will chase anyone, they will just ask you to amment the contract to include astronomical fees for delay of payment, perhapse by day count.
S.O. is related to you [customer]. You can amend or cancel it at anytime.
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Poor representative of Bank or Real Estate will chase you all day for any outstanding dues. Have pity on them :P.
Nodoubt, they will never have pity on their customers if a single MONTHLY PAYMENT gets outstanding
Standing Order is not a substitute of bank cheque. You can call off your standing order anytime. Maybe a direct debit would come into play but that again does not do what a cheque does i.e. the assurance (?) of payment.
Atif242, would not a "Standing Order" be able to solve the problem?
Anyone writing or receiving a check must have a bank account. A standing order is a request to the bank to pay so much every so date of the month to another account
I suspect there is more to it than this piece of news. It simply can't work. It does not coincide with general banking practices.
I hope Q.C.B. will present some acceptable alternatives suitable for all
I don't think so it would effect HOUSE RENTS.
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Only, Terms & Conditions will be completely changed by Financial Institutes & Real Estate Companies who lease their products by accepting PDCs for limited time period and earn INTERESTS/PROFIT from this system.
IT MAY HELP RENT DOWN .........
it will help villa owners.........
this is really bad....i'm thinking about the bunch of PDCs given to our car dealers for our cars taken on CC....damn! :-S
Going to church no more makes you a Christian than standing in a garage makes you a car. ~ Garrison Keillor
yeah,what about the PDCs already issued???and how do they expect us to pay our house rents???queue up in front of the real estate agent's office at the end of every month and pay in cash??? :-S
Going to church no more makes you a Christian than standing in a garage makes you a car. ~ Garrison Keillor
so what are cheques for anyway, stop printing them!
what were they thinking?
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what about car loans that requires PDC? is it also bounded by this law?
"We cannot change the past, we only learnt from it"
nicaq, guess that's a dream...
^_^ sticks and stones...
post-dated salaries. Fair enough?
The law effectively return what a check was ment to be in the first place, a cash alternative. Currently, it is being used as in insurance for payment, which can be done in many other ways, not necessarily yet available in Qatar.
According o legal experts, no one should issue prepaid checks after May 2010. Rather, you agree with the landlord or others to present them with a single chec kfew days before payment due time.
The problem is not for the tenants, the problem is for the landlord as they have to request payment in a legal manner, which post dated check are not one of the options.
Here is a good link in arabic
http://mn940.net/forum/showthread.php?p=12973
and rough translation
no more pdc's... sad.
^_^ sticks and stones...
i hope that this kind of law will not create a huge negative impact of the masses....
going to be a mess for tenants.
how do we pay our rent then??
It's about time they brought in direct debit?
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"HE WHO DARES WINS"
Derek Edward Trotter
the outcome of this law is low....
Does QCB realize that how a SALARIED customer will going to arrange funds for PDC if presented before issuing date e.g. Monthly House Rental Cheques (or)Car Loan Monthly Payment !!!!!
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That would be disastrous for all of us