DUBAI ó Banks in the UAE plan to make recommendations to the central bank on replacing current laws which treat bounced cheques as a criminal offence, according to the chairman of the Emirates Banks Association, or EBA.
Other systems should be introduced to protect banks and businesses, Abdul Aziz Al Ghurair, who is also chief executive officer of Mashreq, told reporters in Dubai on Tuesday.
The EBA, which represents the country’s lenders, is preparing a paper on the subject and will present it to the government, he said.
The cheque system “today its serving us well and without a holistic system in place it will be a catastrophe for business,” Al Ghurair said. If you move away from cheques as a security “everybody will move to cash and the whole trade will change from a semi-secure payment mode to cash,” he said.
Meanwhile, Al Ghurair said he was “optimistic” about Mashreq’s performance this year and expects profits to grow by between 10-15 per cent.
The bank reported last week a 67 per cent jump in net profits in 2012, on the back of lower provisioning and higher fee income.
While not reaching such heights this year, Al Ghurair said the bank would still see healthy growth in earnings.
“I’m optimistic about our performance in 2013... profits will be anything between 10 to 15 per cent higher,” the chief executive told reporters on the sidelines of a conference in Dubai.