Spotlight: Bounced check cases on rise in Oman

Amid repeated warnings by the authorities, more cases involving bounced cheques are coming to the fore. Normally, a case is filed by a beneficiary following insufficient funds in the account of the person who issued the cheque. In many instances, cases of bounced cheques are settled if the person who issued the cheque pays the money.
The Omani law provides the beneficiary with a right to file a case if the person does not pay.
But Francis (name changed), a sales manager with a trading company has a different tale to tell.
“It’s not just that the cheques have bounced, the officials of the company to which I have been supplying various goods are absconding now”, he said.
Francis is one among many who fell victims to sudden closure of the company in the wilayat of Al Hail, in the western part of Muscat.
Although legal proceedings have been initiated against the erring company, Francis said that his future is at stake as he is answerable to his company for the pending bills.
“In the beginning they used to pay us. After winning our trust the company shutdown its operations and its officials missing. They owe us thousands of Omani rials against the goods we supplied to them”, said Francis.
According to experts, the number of such cases involving bounced cheques, closure of companies without prior notices to the clients has increased in the recent past.
“The increase in the number of such cases is evident from the new cases that come to us. It has gone up by 20 per cent in the recent months”, said Dr Hamed Rubaei, a leading lawyer.
According to Omani law, a bank account against which a cheque is issued should have an equivalent amount till the time of its realisation. Failure to which can lead to filing of a criminal case.
The law also mandates banks and companies to give up to six months to clients to realise the amounts on their cheques.
If they cannot pay the money that is due during this period, banks issue a defraud notice, and legal teams are supposed to follow up and treat such cases as criminal.
Legal experts also advise that proper agreements be signed before entering into any kind of a business deal.
“If payment is involved in the deal valid cheques equivalent to prices of the goods and services should be collected in advance”, said Sharafudheen, a legal expert in commercial transactions.
There were 3,054 cases of bounced cheques registered with the ROP in 2018, compared to 2,963 cases in 2017.