The adoption of a direct debit system from accounts of consumers will be deferred with two months. That was announced by UAE Central Bank in a circular to the country’s banks.
Initially, the implementation of the system was planned to take place in mid-June. However, now it is moved to mid-August. In that way CB wants to provide more time to banks in the United Arab Emirates to cope with the various problems that have to do with the system. These issues were brought up by the banks that operate in the country via the UAE Banks Federation.
Currently UAE Central Bank is organizing different workshops and meetings with nominees and directors of systems and information from every bank in the United Arab Emirates. Through them, CB wants to update and inform banks on the all the essential things about the system. In addition, they are trying to also highlight its significance.
The so-called direct debit system is already used in countries like Germany, the Netherlands, Austria, Spain and Italy. At that, it has a great success there. The system for direct debit has to do with the automatic reduction of bills from the account of a consumer. That will be possible when the consumer fills out a form which permits the bank to make payments from his or her name.
This system has many benefits. For example, it will no longer require the customer to write cheques or waste time waiting in centres for consumer service. In that way, this will require less paperwork. In addition, the system will enable automatic payments which the bank will make on behalf of customers. That will also eliminate overdue bills.
The direct debit system can be used with saving and current accounts. With it, due amounts will be decreased three days after the order for payment was received.
If there is no balance, the order for payment will be sent again in a few days. Nevertheless, if the balance is insufficient, the cheque or the bill will still have a payable status.