General information, not legal advice. Laws and bank rules change; check with your bank or a qualified lawyer for your situation.
Since 2 January 2022, a cheque that bounces in the UAE only for insufficient funds is no longer a crime. The bank must pay out whatever funds are in the account if the holder accepts a partial payment. The returned cheque is an executory instrument, so the holder can go straight to the execution court for the rest without filing a lawsuit. Bad-faith acts are still crimes: closing the account, emptying it, stopping payment without a lawful reason, deliberately signing so the cheque fails, and forgery.
This page sets out the current rules under the Commercial Transactions Law as of October 2026. It covers the UAE only. For Saudi Arabia, Qatar, Kuwait, Bahrain and Oman, see bounced cheque laws across the GCC.
What changed, and when
| Date | Law | Effect on cheques |
|---|---|---|
| 2 January 2022 | Federal Decree-Law No. 14 of 2020, amending the old Commercial Transactions Law (Federal Law No. 18 of 1993) | Insufficient-funds cheques decriminalised. Partial payment made mandatory. Bounced cheque made an executory instrument. |
| 2 January 2023 | Federal Decree-Law No. 50 of 2022 (new Commercial Transactions Law) | Replaced the 1993 law and kept the same approach, with the cheque rules and penalties now in Articles 648-684. |
When the first change came in, the Central Bank of the UAE announced that criminal liability for returned cheques had been "narrowed, and confined to cases of bad faith and other cheque crimes", and that partial payment had become mandatory. The UAE government portal confirms that Decree-Law 50 of 2022 came into effect on 2 January 2023 and repealed Federal Law No. 18 of 1993. Article numbers below follow the English translation of Decree-Law 50 of 2022.
A bounced cheque is now an executory instrument
Under Article 667, a cheque that the bank marks as unpaid for no or insufficient balance is an executive instrument. The holder can ask for it to be enforced "in whole or in part, by force" under the Civil Procedures Law (Federal Decree-Law No. 42 of 2022).
In practice, the holder opens an execution file with the competent court and attaches the original cheque and the bank's return memo. There is no trial about whether the debt exists. The court notifies the drawer, and if they do not pay, enforcement follows: attachment of bank accounts and assets and, in suitable cases, a travel ban. Khaleej Times reported in June 2025 that the court may impose a travel ban where the execution amount is at least AED 10,000. The drawer can object through the execution process, for example by arguing the cheque was a security cheque that was misused. Expect a dispute like that to move into ordinary litigation.
Article 682 adds that a criminal case does not stop civil enforcement. The two can run side by side.
Partial payment
Article 648(2) says that if the account holds less than the cheque amount, the bank must pay what is available, unless the holder refuses. The bank records the payment on the back and returns the original cheque with a certificate. The holder can then enforce the remainder under Article 667. Under Article 673, a bank that refuses partial payment or fails to issue the certificate can be fined.
For payees, the practical advice is simple: accept the partial payment, keep the marked cheque and certificate, and pursue the balance.
Which cheque acts are still crimes
| Article | Act | Penalty (as written) |
|---|---|---|
| 675 | Telling the bank before the cheque's date not to pay, outside the lawful exceptions. Closing the account, withdrawing the whole balance or deliberately freezing it before the cheque is presented. Deliberately writing or signing it so it cannot be paid. | Prison of 6 months to 2 years and/or a fine of at least 10% of the cheque value (minimum AED 5,000, maximum double the value). Doubled for repeat offences. |
| 674 | Endorsing or handing over a bearer cheque knowing it has no balance or cannot be paid | Fine of at least 10% of the value (minimum AED 1,000, maximum the cheque value). Doubled for repeat offences. |
| 676 | Forging or altering a cheque, knowingly using a forged one, fraudulent use of someone else's cheque | At least one year in prison and a fine of AED 20,000 to 100,000 |
| 673 | Bank-side offences, such as falsely declaring insufficient funds or refusing partial payment | Fine of at least 10% of the value (minimum AED 5,000, maximum double) |
The lawful reasons to stop payment are narrow. Article 651 lets the drawer object only if the cheque is lost or the holder becomes bankrupt. "I changed my mind" or a dispute with the supplier does not count.
On conviction for some of these offences, the court can add further penalties:
- withdrawal of the cheque book and a ban on new ones for up to five years (Article 679)
- a ban on the related commercial or professional activity for up to three years (Article 681)
- publication of the judgment (Article 678)
For companies, Article 683 makes the manager personally liable only if they knew of the offence or acted for their own or someone else's benefit. Otherwise the company itself is fined two to five times the normal fine and its licence can be suspended. Under Article 684, criminal proceedings under Articles 674 and 675 end if the cheque is paid in full or the parties settle before a final judgment.
Credit bureau and Central Bank reporting
Decriminalisation did not make bounces consequence-free. Article 648(3) requires the bank to report the account holder to the Central Bank when a cheque lacks funds on its due date, when the drawer withdraws the funds after issuing it, or when the cheque is only partly paid. Cheques returned for insufficient funds are also recorded with the Al Etihad Credit Bureau (AECB). That lowers the drawer's credit score and can affect loans, cards and future cheque books, because banks check AECB before issuing them. Technical returns such as a signature mismatch are treated differently from insufficient funds, but they still cost time and fees.
What payees can do
- Present on time. A cheque must be presented within six months of its date (Article 649), and no earlier than that date (Article 648(1)).
- Keep the paperwork. If the cheque bounces, keep the original, the return memo and any partial-payment certificate.
- Talk first. A short written demand often gets the cheque paid. See sending a cheque bounce notice.
- Enforce. If that fails, open an execution case on the cheque in the competent court, with a lawyer or the court's own channels. Ask about attachment and a travel ban at the same time.
- Act in time. Claims against the drawer and endorsers are time-barred two years after the presentment period ends (Article 670), so do not sit on a returned cheque.
- Criminal complaints are for bad faith only. Report to the police only where there are signs of bad faith, such as a closed account, a deliberate stop instruction or forgery.
What drawers should do
- Know every cheque you have outstanding, especially post-dated ones. Most bounces are timing mistakes, not fraud. See managing post-dated cheques.
- Never close an account or empty it while cheques drawn on it are still out. That is the act the law still treats as a crime.
- If you cannot fund a cheque, contact the payee before its date and agree a replacement in writing.
- Avoid technical returns by writing cheques cleanly. See why cheques bounce and how to write a cheque.
Software helps on the drawer side: ChequeMaster records every printed cheque with its date and status, so you can filter forward-dated cheques still marked Issued and see what clears in the coming weeks.
