‘Unified warning list’ to regulate direct debit services, cheque violations in Oman

Oman Monday 02/October/2023 10:47 AM
By: Times News Service
‘Unified warning list’ to regulate direct debit services, cheque violations in Oman

Muscat: The Sultanate of Oman is in the process of activating a technical system for managing direct debits and returned cheque, which includes announcing a unified warning list with the names of violators.

The chairman of the Board of Governors of the Central Bank of Oman (CBO) has issued Ministerial Resolution BM/9/57/2023, regulating the direct debit system and bounced or returned cheques.

According to the law, licensed banks are obligated to apply the provisions of these regulations to the instrument returned for lack of balance or for any other reason that reveals the drawer’s intention not to pay, and they are also obligated to provide information related to it.

 Article 4 of the regulations stipulates the following: “Licensed banks are obligated to provide the system with all data related to the returned instrument, and this data includes account holders who have it returned two or more times a month, or four or more times within (6) six months, or (6) times within one year, whether these instruments are returned through one or more banks. It also includes the name and identity details of the owner of the returned instrument, the numbers and dates of its issuance and return, the value of its amounts, the names of its beneficiaries, the reasons for its return, and any other data specified by the Central Bank for the purposes of analyzing information and developing policies.

 The Central Bank or the host entity - based on the data it receives from the licensed banks - shall prepare a unified warning list of the names of the account holders referred to in Article (4) of these regulations. Licensed banks, financial institutions, credit bureaus, their participating members, and others, as determined by the Central Bank, may review the warning list in order to benefit from it for the purpose of assessing credit status and financial solvency.

 Article (7) read: The hosting party, the licensed banks, and any person authorized to use the system must take the utmost levels of confidentiality, security, and safety in operating and using the system. Access to the system must be limited to authorized persons responsible for the relevant work. Article (8): Licensed banks or any person authorized to use the system may not benefit from the information related to the returned instrument except for the purposes for which it was requested.

The Article (9) of the regulations stated that : Licensed banks are obligated to exercise caution when dealing with account holders whose names appear on the unified warning list, and they must withdraw cheque books from them, not open current accounts for them, and refrain from providing them with direct debit services, for a period of one year from the date of returning the returned instrument. Without prejudice to any financial fines or other procedures determined by the Central Bank.

 Article (10): Licensed banks may remove the data of the returned instrument from the system for account holders who have settled their obligations arising from that returned instrument towards the beneficiary, provided that they obtain a document proving that settlement. In all cases, licensed banks must keep documents proving that proof.

In penalty the regulation stated, without prejudice to any penalties contained in the Banking Law and the National Payment Systems Law referred to, the Central Bank may impose an administrative fine not exceeding OMR 20,000 upon violating the provisions of these regulations.