Direct debit system in UAE banks from Oct 5

Direct debit system in UAE banks from Oct 5
Highlights

Direct Debit System In UAE Banks From October 5. The Central Bank of the United Arab Emirates (UAE) has announced that registration of banks and finance companies for the direct debit system has been completed. All banks and finance companies are now ready to embark on to the first phase of using the system beginning Oct 5. Finance UAE To Begin Direct Debit System

Dubai: The Central Bank of the United Arab Emirates (UAE) has announced that registration of banks and finance companies for the direct debit system has been completed. All banks and finance companies are now ready to embark on to the first phase of using the system beginning Oct 5.

The direct debit system is a safe and convenient method of making payments and is ideally suited for making regular payments with fixed or variable amounts electronically. An individual or company can set up a direct debit instruction by submitting a signed direct debit authority (DDA) to the service provider.

Once a DDA has been successfully set up, payments are made automatically by the customer's bank from the account designated by the customer in the DDA upon receiving a request through the UAE Direct Debit System (UAEDDS) from the creditor.

"The introduction of the direct debit system is yet another strategic initiative from the Central Bank," a senior official at the Central Bank said. "DDS will save time and effort for both clients and banks... The introduction of the Direct Debit System is a step in the right direction towards increasing the efficiency of our banking system, and elevating it in line with global standards," he added.

The facility is designed to eliminate the need to sign several post-dated cheques for installments, allowing banks and finance companies to reduce their reliance on post-dated cheques.

Monthly installments can be claimed by lending institutions by using a direct debit request. The Central Bank has indicated that the next phase of the direct debit system will facilitate payments towards services such as electricity, water, telecom, credit card dues and insurance premiums.

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