Bounced cheques on the decline in Oman

MUSCAT, SEPT 24
The incidence of bounced cheques — also known as dishonoured or dud cheques — continues to trend downward, a development that bodes well for “reduced payment risks”, according to the Central Bank of Oman (CBO).
A total of 311,764 cheques were branded as “unpaid” in 2024, down from 362,072 a year earlier, representing a decline of 13.89 per cent, the apex bank noted in its newly published Financial Stability Report 2025.
As a share of total cheques presented for clearing in 2024, bounced cheques accounted for 8.9 per cent of the total (3.5 million). This figure had slipped from 9.8 per cent of the 3.7 million cheques presented in 2023, “reflecting improved controls and overall better financial health”, the Central Bank report stated.
Commenting on the downward trend in unpaid cheques in recent years, the Central Bank said: “The continued decline in unpaid cheques and non-sufficient funds incidents reflects improvement in payment reliability and stronger financial discipline. However, technical errors such as stale cheques and early payments have shown a slight increase, highlighting areas for further improvement in payment system efficiency”.
Significantly, the total number of cheques presented for clearing also continued to decline in line with a gradual shift towards digital transactions, according to the report. It dipped 6.0 per cent to 3.5 million cheques in 2024, down from 3.7 million a year earlier.
Cases of ‘insufficient funds’, while the dominant reason for cheques being returned, dipped 12.2 per cent in 2024, indicating “better account balance management by customers and less use of cheques”, the report said.
The share of bounced cheques with a ‘refer to drawer’ citation — a generic catch-all term for problematic cheques — plummeted by a significant 43.7 per cent. Similarly, instances of cheques marked ‘payment stopped/payment stopped awaiting confirmation’ slumped 41.9 per cent. Those attributable to ‘account closed/frozen’ declined by 29.1 per cent, underscoring “enhanced bank customer engagement and fewer inactive or abandoned accounts”, the report explained.
Also contributing to the reduction in unpaid cheques are measures adopted by financial institutions to strengthen their cheque-clearing frameworks. “In parallel, the rising adoption of digital transactions and the implementation of more robust compliance practices are further supporting payment efficiency. As customers increasingly manage their accounts more effectively, the incidence of bounced cheques due to insufficient funds is expected to decline further”, the Central Bank added.
At the third meeting of its Board of Governors last year, the Central Bank of the Central Bank of Oman (CBO) voiced an inclination to adopt the ‘partial payment system for cheques’ — a mechanism that enables banks to cash a cheque for an amount less than the full amount written on the cheque.
“While typically a cheque would bounce if the full amount to honour it was not available in the drawer’s account, after the amendments introduced in some countries, banks are required to fulfil partial amounts of the cheque equal to the amount available in the drawer’s account, unless the cheque bearer rejects the option for partial payment”, the CBO explained in an earlier report.