Bad debts stay on your UAE credit report for five years

Missed debt payments stay on your UAE credit report for five years, according to the Al Etihad Credit Bureau.

The bureau confirmed the five-year cut off point after The National asked whether UAE banks are aware of previous defaults once a specific time per­iod has elapsed.

"Credit reports include default information only for the last five years," the bureau said.

Initially the bureau requested a two-year financial history of banks’ customers when it launched in late 2014. At the time the organisation said that the credit reports would include "consumers’ debt obligations and payment behaviour patterns for the past 24 months".

Ambareen Musa, the founder and chief executive of the comparison website Souqalmal.com and a member of The National’s debt panel, said the new time scale means credit offences will continue to cast a shadow on an individual’s credibility as a borrower during the five-year period.

Rules regarding how long bad credit information stays on your report vary around the world.

In the US, a bad credit history including late payments, debt default or even a bankruptcy, stays on an individual’s credit report for at least seven years, said Ms Musa. In the UK, negative credit records show up for six years and in India consumer payment history is stored for three years.

While five years may seem a long time for UAE residents committed to repaying their debts and wiping the slate clean, it is essential to build a credit profile of a potential customer, said Feroza Malik, managing director at Credit Expert Loans and Overdues Rescheduling Services, a consultancy for debtors with poor credit reports.

"This is the global general maximum tenor on short-term finance such as personal loans, vehicle finance or student loans. The data submitted and recorded builds the credit history over the lifespan of the [loan] and is an influential source of information when assessing the credibility of a debtor," said Ms Malik.

Currently, any default information, even previously missed instalments that have been rectified within 90 days by the borrower, are viewed as bad credit by most banks, said Ms Malik.

However, credit reports are not the only criteria banks use when deciding whether to approve an application.

UAE grants visa on arrival to Indian nationals with US visa, green card

The UAE Cabinet has approved a decision to grant Indian passport holders with either a valid US visa or a green card a visa on arrival.

The decision comes within the framework of the long-term strategic partnership between the UAE and India, the promotion of political, economic and trade interests between the two countries. This decision strengthens the UAE's external relations by facilitating the visa issuance process in order to confirm its global status as a tourist and economic hub.

Under the new move, ordinary passport holders from India who have a US visa or green card with a minimum six-month validity can enter the country from any point of entry for a period of 14 days, with an option for a one-time extension of the same period.

India is the UAE's second largest partner, and trade between the two countries reach $60 billion a year, with UAE exports to India amounting to $27 billion a year, while India exports to the UAE is valued at $33 billion.

India invests around $70 billion in the UAE via its 45,000 Indian companies, while the UAE invests around $10 billion in the energy, metallurgical, service, technology and construction sectors in India. There are also a number of joint ventures and investments by UAE companies in India such as the Abu Dhabi Investment Authority, Abu Dhabi National Energy Company, Emaar, and DP World, which currently operates in six major ports in India.

There are around 143 daily flights between cities in both countries, one flight every ten minutes, or 1000 flights per week. The number of Indian tourists coming to the UAE in 2016 reached about 1.6 million Indian tourists, and there were about 50,000 UAE tourists who visited India in the same year.

Dishonored Cheques and related laws in the UAE

Dishonored cheques are a reoccurring problem in U.A.E and there has been a sharp increase in criminal cases and complaints filed with the UAE courts and the courts’ case load has substantially increasing every year

Criminal court: From a criminal court’s perspective, the word ‘security’ on a cheque does not alter its nature as long as it satisfies the formal requirements set out in the law. Article 596 of Law No. 18 of 1993 (Commercial Transactions Law) sets out the mandatory particulars that must be stated on a cheque i.e. an unconditional order to pay a specific sum of money. A security cheque, on the other hand, normally makes payment subject to the fulfillment of a condition. There is a clear difference, then, in the meaning, the criminal court attaches to cheques compared to the civil court.

The criminal court and civil court function separately. When the reciever of a cheque which bounced files a complaint in the police station against the issuer, the case is forwarded to the public prosecution and then to the criminal court. The criminal court may convict the issuer based on evidence provided by the complainant and give him two options - pay the money or go to jail.

It is important to note that the UAE legislator has revised Article 401 of the UAE Penal Code dealing with the issuance of Cheques in bad faith under Law No. 34 of 2005, by adding a clause that stipulates:

“The criminal case shall terminate if payment is made or assignment is established after commission of the offence and before a final ruling is made in respect thereof. If this occurs after the ruling became final, its enforcement will be seized.”

Civil court

However, in case of failure to get cheque amount despite imprisonment, the complainant should present his case to the civil court to claim the money along with documents and evidence to prove it. The civil court could then either demand the issuer to pay or face jail term.

Completed jail term

If a certain person was convicted for a bounced cheque case and has served jail term, he or she stands released after the period. However, if the original complainant files the case again in the civil court, he or she will have to pay the unpaid amount or go back to jail. In case there is no pending or second case once the jail term is completed, the person is free to leave the country after collecting his impounded passport.

Who signed the cheque

In companies or partnership firms, not all partners or stakeholders can be held liable in the event of a cheque being issued without sufficient funds to pay it off. The criminal liability shall be borne by the individual who signed the cheque - whether it be a manager or another partner. Other people's private funds have no bearing on the value of the cheque. Its value shall be realised only through the assets of the company.

However, if the losses or lack of funds, which resulted in the cheque bouncing of the company, are proven to be a result of any kind of fraud by the owners or partners, the case may take a different direction.

Owners or managers abscond

If it is proved that the company, which the complainant has dealt with, does not have enough funds to settle the cheque’s value, he or she can file a criminal case against the manager who signed the cheque, even if he or she has left the country. After a judgement is issued, the questioner may request the concerned authority to include the manager’s name in Interpol’s wanted list.