JEDDAH: The Saudi Credit Bureau (SIMAH) is to launch a campaign aimed at cracking down on checks that later bounce. The “2010... All Our Checks are Covered” initiative will be implemented early this year. “There are punishments for anyone issuing bounced checks that will help regain respect for checks as official monetary documents,” Director General of SIMAH Nabeel Al-Mubarak told local Arabic daily Al-Madinah on Thursday.
SIMAH was formed by Saudi commercial banks to supply them and other financial companies with various credit data.
“Any recipient of a bounced check should ask the bank to give him an official rejection which he should then give to SIMAH. A violation will then be included in the credit report of the issuer and accordingly all local commercial banks and the financial companies will stop dealing with him,” he said.
Al-Mubarak was confident that such measures would help reduce the growing number of bouncing checks. He said SIMAH was attempting to create a mechanism that would automatically flag up bad checks issued by customers of banks and financial companies, whether it be individuals or companies.” He revealed that SIMAH has created indexes of those who have issued bad checks. “This will be reflected in their credit reports and subsequently affect their financial rating,” he said.
Al-Mubarak said their campaign was aimed at raising awareness and regaining confidence in checks, not so much focusing on the punishments.
“The check is a financial paper committing its issuer to make the payment so he should be very careful before writing one,” he said.
“We are confident that SIMAH will effectively reduce the negative impact of issuing uncovered checks, which not only affect investments in the Kingdom and its economic and financial stability but also the world financial and monetary system,” he added.
Al-Mubarak strongly lauded the financial and economic position of the Kingdom, which enabled it to join the top 20 economies in the world.
The newspaper also quoted sources as claiming that the committee of lawyers at the Jeddah Chamber of Commerce and Industry had asked the Ministry of Commerce to amend the current system of commercial papers.
This would make bank checks official documents that should be honored, rather than relying on possible judicial action to rule them as such.
The lawyers also called for imprisonment or fines for anyone issuing a bad check.
According to the newspaper, the ministries of interior, finance, justice and commerce were studying a series of recommendations for the implementation of judicial sentences against issuers of bad checks.