32% rise in bounced cheque cases: CBO

In­suf­fi­cient funds be­ing the top rea­son followed by ‘legally blocked’ ac­counts

Muscat Daily - - FRONT PAGE - Our Cor­re­spon­dent Mus­cat

The Cen­tral Bank of Oman (CBO) has said that the num­ber of bounced cheque cases rose 32 per cent in 2016 over the pre­vi­ous year. Ad­di­tion­ally, the cen­tral bank found that in­suf­fi­cient funds be­ing the major cause for un­paid cheques followed by ac­counts closed or ‘legally blocked’ ac­counts.

CBO stated that in gen­eral, the to­tal num­ber of cheques, which were sub­ject to the clearing process in 2016, in­creased by 8.81 per cent com­pared to 2015, amount­ing to 4.44mn. “In 2016, bounced cheques in­creased as well and reached 373,082 from 282,209 in 2015, an in­crease of 32.2 per cent. In ad­di­tion to that, as a per­cent­age of to­tal cheques, bounced ones wit­nessed an in­crease from 6.91 per cent in 2015 to 8.40 per cent in 2016 ,” CBO stated in its Fi­nan­cial Sta­bil­ity Re­port 2017.

Ac­cord­ing to an es­ti­mate by the Public Pros­e­cu­tion, an av­er­age of 3,500 cases of bounced cheques are re­ported an­nu­ally to it for le­gal re­course.

CBO ex­plained that oc­ca­sion­ally a cheque can bounce due to a mi­nor un­in­ten­tional mishap. “How­ever, there are other more se­ri­ous sit­u­a­tions which can in­clude criminal ac­tiv­ity. In­suf­fi­cient funds con­tinue to lead the list of rea­sons of bounced cheques (74.88 per cent), followed by ac­counts closed or ‘legally blocked’ ac­counts (9.79 per cent), and then MICR en­cod- ing er­rors (4.05 per cent).”

The re­port said that there has been a de­cline in the num­ber of cheques us­ing the spe­cial clearing fa­cil­ity from 1,747 in 2015 to 1,432 in 2016, while in­creas­ing the num­ber of cheques us­ing the regular chan­nels from 4.08mn in 2015 to 4.44mn in 2016 as it may be deemed a bet­ter op­tion due to its in­creased ef­fi­ciency in pro­cess­ing time.

Ac­cord­ing to Ar­ti­cle 290 of the Oman Pe­nal Code, bounc­ing of a cheque is con­sid­ered as a crime com­mit­ted by the is­suer. Ac­cord­ing to the law, any­one who is­sues a cheque with­out hav­ing suf­fi­cient funds in ac­count can be sen­tenced to a jail term of three months to two years and can also be fined RO10-RO500.

An av­er­age of 3,500 cases of bounced cheques are re­ported an­nu­ally to the Public Pros­e­cu­tion for le­gal re­course

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