The UAE Central Bank intends to implement the direct debit from bank account by the end of this year, it is learnt.
The move is aimed at reducing dealing in cheques and easing customers’ burdens by deducting Etisalat, electricity, water and other bills automatically from the customers’ bank accounts.
According to high-level source, the UAE Central Bank is holding intensive meetings and workshops for the heads of information systems and with eligible banks operating in the UAE to throw the light on the new system and its importance.
Successfully implemented in Austria, Germany, France, Italy, The Netherlands and Spain, the new system is concerned with deducting the bill amounts automatically from the customers’ accounts after the customers fill out a form authorising their banks to pay on their behalf.
The features of the system include eliminating the need to write cheques and sparing writing procedures, postal charges and the need to wait in customer service centres. Other features include automatic payment of bills on the customers’ behalf and getting rid of post-paid bills.
The system is applicable to current accounts, savings accounts with the due amounts being deducted three days after the payment order. In case of no available balance, the eligible companies will submit the payment order once again after a few days and in case the balance is not enough, the bill or cheque will still be payable.
Answering a question about whether the authorisation form can be a legal alternative of the cheque, the source said the Central Bank is in the process of studying this issue. Bankers stressed the necessity for the authorisation form to legally replace the cheque, enabling banks to reserve their right.
The source said the Central Bank has not currently proposed any charges for using the new system.