Don’t sign a cheque you can’t honour, advise lawyers in Oman

Charity organisations have also stepped up their efforts to protect people from being punished in cases such as bounced cheques or inability to repay loans. “We have seen a rise in the number of people who have defaulted and asked for our assistance,” said Deena Shahrabani, who works for a legal foundation that helps individuals in financial troubles.

Shahrabani added that the foundation has increased its support through different techniques which include financial help as well as advising people in such situations.

According to Omani law, a bank account of which a cheque has been written must hold that amount at anytime. Failing this is a criminal offence and fines and jail term can be passed by courts with regards to this.

According to the Central Bank of Oman, insufficient funds continue to lead the list of reasons of bounced cheques (74.88 per cent), followed by account closed or “legally blocked” account (9.79 per cent), and then MICR Encoding errors (4.05 per cent).

In addition to that, as a percentage of total cheques, bounced cheques witnessed an increase from 6.91 per cent in 2015 to 8.40 per cent in 2016.

Ramanuj Venkatesh, Assistant Manager (Accounts), Larsen and Toubro, added: “The current market will unfortunately not tolerate reckless spending so it is important for people to live within their means. These happen more often than I would like to think and it is unfortunate when people are in such situations. The banks will of course take stringent measures to enforce that cheques are honoured on time, but before they are forced to resort to strict action, it is better to govern these matters ourselves.”