Asharq Al-Awsat reported last week that a judge in Lebanon had sentenced a well-known Lebanese singer to prison for giving a bad check. I was reminded of what has been written in our press about this problem and of the statement from the chambers of commerce the amount lost from bad checks has reached SR12 billion over the last few years.
Much has been written on this subject and of the difficulties faced by the chambers of commerce who attempt unsuccessfully to collect from the writers of the bad checks. To a certain extent in the Kingdom, our checks are not trusted; they are used in ways destructive to the economy. There is no severe punishment for the guilty and the situation goes from bad to worse. The regulations need to be revised and reconsidered to include appropriate legal safeguards and the imposition of financial penalties instead of prison. Checks are a means of payment and are legally treated as cash; therefore there must be protection for those accepting the check just as there are measures to protect the public from counterfeit currency.
I believe that both the banks and the writers of bad checks should be held responsible. Too often the banks issue check books without verifying the person’s identity or his honesty and integrity. The same can be said of companies and other organizations. Banks should be involved in the process aimed at finding appropriate solutions to the problem of bad checks.
In the past, many individuals and businesses declared bankruptcy when they were in fact financially solvent. When our local banks were unable to retrieve their funds, they came up with a “black list.” As a result, those who were on the list were unable to obtain any service or facility from local banks unless they first repaid what was due the bank. The black list did the job and as a result of it, many banks were able to recover some of their funds. Perhaps local banks should consider reviving the black list while at the same time, evaluating customers before issuing them with check books.
I will quote a paragraph from an article published in Al-Hayat last Saturday, which indicates the real relationship between Saudi banks and citizens. “Saudi banks are advertising new products, among them are loans for citizens equal to ten months salary or up to one million riyals but applicants for these loans are not able to meet the banks’ stringent conditions.
The important thing is for Saudi banks to maintain their reputations and work to maintain their rights and the rights of their customers as well. In addition, the matter of bad checks must be looked into and taken seriously for the benefit of all.